Bosque Trading Enterprises, Inc., Nazina Mawji and Kamal Mawji v. Business Loan Center, LLC. and Stewart Title Guaranty Company

• Court: Court of Appeals of Texas
• Decided: October 11, 2012
• Docket: 10-11-00016-CV
• Status: Published

Opinion

IN THE TENTH COURT OF APPEALS

No. 10-11-00016-CV

BOSQUE TRADING ENTERPRISES, INC., NAZINA MAWJI AND KAMAL MAWJI, Appellants v.

BUSINESS LOAN CENTER, LLC. AND STEWART TITLE GUARANTY COMPANY, Appellees

From the 220th District Court Bosque County, Texas Trial Court No. 09-09-22409

MEMORANDUM OPINION

Bosque Trading Enterprises, Inc., Nazina Mawji, and Kamal Mawji (hereinafter

“Bosque”) appeal from a final judgment that granted a traditional and no-evidence

motion for summary judgment in favor of Ciena Capital, LLC, f/k/a Business Loan

Center, LLC (BLC) and struck certain third party defendants that Bosque had attempted

to add. Bosque complains that the trial court erred by granting the motion for summary judgment on both the traditional and no-evidence grounds and abused its discretion by

striking the third party defendants. Because we find no reversible error, we affirm the

judgment of the trial court.

Procedural History

In 2007, Bosque entered into a promissory note for the purchase of a convenience

store.1 The Mawjis each personally guaranteed the loan, and Bosque later defaulted on

the loan. In September of 2009, BLC filed suit against Bosque and the Mawjis for a

declaratory judgment of its rights on the note, for a judgment for the deficiency on the

note, and for attorney’s fees. The petition contained a request for disclosure pursuant to

rule 194 of the Rules of Civil Procedure.

In November of 2009, Bosque filed its original answer and listed “estoppel, quasi

estoppel, judicial estoppel, and unclean hands” as affirmative defenses and asserted

counterclaims against BLC for:

a. Violations of the Texas Finance Act; b. Violations of the applicable Texas collection debt practices laws; c. Predatory lending practices which violate the public policy of the State of Texas; d. Conspiracy to harm Bosque and Mawji; and e. Fraud upon Bosque and Mawji.

1One of Bosque’s primary contentions is that it believed that two convenience stores were included in the purchase; however, the deed of trust executed at the same time contains only one property description. Ultimately, however, whether there were one or two stores involved in the purchase is irrelevant because of our resolution of this appeal on other grounds.

Bosque Trading Enterprises, Inc. v. Business Loan Center, LLC. Page 2 Bosque sought actual and exemplary damages and attorney’s fees for these

counterclaims. On May 28, 2010, Bosque amended its pleadings and added third party

defendants T.S.G. Associates, Inc., d.b.a. DFW Business Consultants, Stewart Title

Company, Vickie W. Demik, and Bryan Owens. Owens filed a motion to strike

pursuant to rule 38 in August of 2010 and was nonsuited from the case in November of

2010. On October 12, 2010, Bosque amended its counterclaims to remove Stewart Title

Company and to add Stewart Title Guaranty Company and Ciena Capital, LLC as

counter-defendants.

In August of 2010, BLC amended its petition and filed a traditional and no-

evidence motion for summary judgment, which was set for hearing on October 14, 2010.

It was not until October 12, 2010 that Bosque served its responses to the request for

disclosure and its response to the motion for summary judgment. BLC objected to the

affidavits attached to the motion for summary judgment and asked that they be stricken

pursuant to rule 193.6 of the rules of civil procedure and because they contained

inadmissible hearsay, were conclusory, and because the Mawjis had both signed one

affidavit. The trial court granted BLC's objections and struck Bosque's summary

judgment evidence in its entirety. After taking the matter under advisement, the trial

court then granted BLC's traditional and no-evidence motion for summary judgment

later in October of 2010.

Bosque Trading Enterprises, Inc. v. Business Loan Center, LLC. Page 3 In November of 2010, BLC and Stewart Title Guaranty Company each filed a

motion to strike the additional third party defendants because Bosque did not comply

with rule 38(a) of the rules of civil procedure. The trial court granted those motions and

struck the remaining third-party defendants. The trial court then entered a final

judgment disposing of all claims and parties.

Standard of Review for Summary Judgment

When a party moves for summary judgment under both the traditional and no-

evidence standards on the same issue, we first address the no-evidence standard of Rule

166a(i). Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004); Tex. R. Civ. P. 166a(i).

If the nonmovant fails to produce more than a scintilla of evidence under that burden,

then there is no need to analyze whether the movant's proof satisfies the traditional

motion's burden. Ridgway, 135 S.W.3d at 600.

No-Evidence Summary Judgment

In its second issue Bosque complains that the trial court erred by granting BLC's

no-evidence motion for summary judgment because the motion was insufficient as a

matter of law as it did not specify any elements it was challenging. The party moving

for a no-evidence summary judgment must specifically state the elements as to which

there is allegedly no evidence. See TEX. R. CIV. P. 166a(i); Humphrey v. Pelican Isle Owners

Ass'n, 238 S.W.3d 811, 813-14 (Tex. App.—Waco 2007, no pet.). As the Texas Supreme

Court has explained, the "'motion must be specific in challenging the evidentiary

Bosque Trading Enterprises, Inc. v. Business Loan Center, LLC. Page 4 support for an element of a claim or defense; paragraph (i) does not authorize

conclusory motions or general no-evidence challenges to an opponent's case.'" Timpte

Indus. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009) (quoting TEX. R. CIV. P. 166a(i) cmt.).

Bosque objected to the lack of specificity in BLC's no-evidence motion for

summary judgment in their timely-filed response to the motion. See Watson v. Dallas

Indep. Sch. Dist., 135 S.W.3d 208, 227 (Tex. App.—Waco 2004, no pet.), disapproved of on

other grounds by Univ. of Tex. Med. Branch at Galveston v. Barrett, 159 S.W.3d 631, 48 Tex.

Sup. Ct. J. 472 (Tex. 2005). However, in addition to its written objections, Bosque was

required to obtain a ruling on what were, in essence, special exceptions in order to

preserve the issue for appeal. Rosas v. Hatz, 147 S.W.3d 560, 562 (Tex. App.—Waco

2004, no pet.); Watson v. Dallas Independent School Dist., 135 S.W.3d 208, 227-29 (Tex.

App.—Waco, 2004, no pet.). There is no indication that Bosque's objections were ruled

on. Nor does the trial court's granting of the no-evidence summary judgment motion

imply a ruling on a special exception. See Rosas, 147 S.W.3d at 562. Nothing in the

record suggests the trial court actually ruled on Bosque's objections to the no-evidence

motion for summary judgment. Because Bosque failed to obtain a ruling from the trial

court on its objections the complaint regarding the form of the motion for no-evidence

summary judgment has been waived. Rosas, 147 S.W.3d at 563.

Bosque Trading Enterprises, Inc. v. Business Loan Center, LLC. Page 5 Striking of Bosque's Summary Judgment Evidence

Bosque complains that the trial court abused its discretion by striking its

summary judgment evidence because it was an improper sanction for its failure to

respond to the request for disclosure. BLC filed a motion to strike Bosque's evidence

pursuant to rule 193.6 of the rules of civil procedure. TEX. R. CIV. P. 193.6. Rule 193.6 of

the Texas Rules of Civil Procedure applies to summary judgment proceedings. Fort

Brown Villas III Condo. Ass'n, Inc. v. Gillenwater, 285 S.W.3d 879, 882 (Tex. 2009) (holding

trial court properly struck expert's affidavit when nonmovant did not timely disclose

the expert pursuant to scheduling order deadlines). Rule 193.6 governs untimely

discovery responses and provides the following:

193.6 Failing to Timely Respond—Effect on Trial

(a) Exclusion of Evidence and Exceptions. A party who fails to make, amend, or supplement a discovery response in a timely manner may not introduce in evidence the material or information that was not timely disclosed, or offer the testimony of a witness (other than a named party) who was not timely identified, unless the court finds that:

(1) there was good cause for the failure to timely make, amend, or supplement the discovery response; or

(2) the failure to timely make, amend, or supplement the discovery response will not unfairly surprise or unfairly prejudice the other parties.

(b) Burden of Establishing Exception. The burden of establishing good cause or the lack of unfair surprise or unfair prejudice is on the party seeking to introduce the evidence or call the witness. A finding of

Bosque Trading Enterprises, Inc. v. Business Loan Center, LLC. Page 6 good cause or of the lack of unfair surprise or unfair prejudice must be supported by the record.

TEX. R. CIV. P. 193.6(a), (b).

The clear language of rule 193.6 demonstrates that the consequence for a party's

failure to respond to a discovery request is the mandatory exclusion of the evidence

requested. See Alvarado v. Farah Mfg. Co., 830 S.W.2d 911, 914 (Tex. 1992) (applying

former rule 215(5), the predecessor to rule 193.6); F & H Invs., Inc. v. State, 55 S.W.3d 663,

669 (Tex. App.—Waco 2001, no pet.). A party who fails to make, amend, or supplement

a discovery response in a timely manner may not introduce in evidence the material or

information that was not timely disclosed unless the court finds that (1) there was good

cause for the failure to timely disclose or (2) the failure will not unfairly surprise or

prejudice the other parties. Tex. Mun. League Intergovernmental Risk Pool v. Burns, 209

S.W.3d 806, 817 (Tex. App.—Fort Worth 2006, no pet.) (citing TEX. R. CIV. P. 193.6(a)).

The trial court has discretion to determine whether the party that did not make a timely

discovery response has met its burden. Id. (citing Alvarado, 830 S.W.2d at 914).

Bosque did not at any time seek relief from the trial court relating to its untimely

response to BLC's request for disclosure. In other words, Bosque never asked the trial

court for leave to serve late responses to BLC's request for disclosure, nor does it

contend on appeal that it should have been permitted to rely upon the late discovery

responses. The trial court had discretion to determine whether Bosque had met its

burden of showing good cause or lack of surprise; but the trial court has no discretion to Bosque Trading Enterprises, Inc. v. Business Loan Center, LLC. Page 7 consider evidence excluded by the rule without a showing of good cause or lack of

surprise. See Alvarado, 830 S.W.2d at 914. We have found nothing in the record before

us to indicate that Bosque ever gave any reason or defense for not timely answering the

request for disclosure and thus failed to meet its burden.

With no attempt to establish good cause or lack of surprise by Bosque, the trial

court did not abuse its discretion by striking Bosque's summary judgment evidence.

Therefore, Bosque was properly barred from relying on that evidence to defend BLC's

motion for summary judgment. See TEX. R. CIV. P. 193.6. Because Bosque's summary

judgment evidence was stricken in its entirety, the trial court did not abuse its

discretion in granting BLC's no-evidence motion for summary judgment. We overrule

issue two.

Traditional Motion for Summary Judgment

In its first issue, Bosque complains that the trial court erred by granting BLC's

traditional motion for summary judgment because its evidence was improperly

stricken. Further, Bosque complains that the improperly stricken evidence raised a fact

question, rendering traditional summary judgment improper. Under the traditional

summary-judgment standard of Rule 166a(c), the movant has the burden to show that

no genuine issues of material fact exist and that it is entitled to judgment as a matter of

law. See TEX. R. CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.

1985).

Bosque Trading Enterprises, Inc. v. Business Loan Center, LLC. Page 8 In determining whether there are disputed issues of material fact, we take as true

all evidence favorable to the nonmovant and indulge every reasonable inference in the

nonmovant's favor. Nixon, 690 S.W.2d at 548-49. Once the movant establishes its right

to summary judgment as a matter of law, the burden shifts to the non-movant to

present evidence raising a genuine issue of material fact, which precludes the summary

judgment. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979);

Talford v. Columbia Med. Ctr. at Lancaster Subsidiary, L.P., 198 S.W.3d 462, 464 (Tex.

App.—Dallas 2006, no pet.). A party relying on an affirmative defense to defeat a

motion for summary judgment must raise a genuine issue of fact as to each element of

the defense. Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984); Birenbaum v. Option

Care, Inc., 971 S.W.2d 497, 504 (Tex. App.—Dallas 1997, pet. denied).

Striking of Bosque's Summary Judgment Evidence

Bosque also complains that the trial court abused its discretion by striking its

summary judgment evidence as it relates to the traditional motion for summary

judgment. However, we have determined that the trial court did not abuse its

discretion by striking Bosque's summary judgment evidence. Therefore, Bosque was

properly barred from relying on that evidence in support of its affirmative defenses in

response to BLC's traditional motion for summary judgment. See TEX. R. CIV. P. 193.6.

Because the trial court did not abuse its discretion in striking Bosque's evidence on its

affirmative defenses in response to the motion for summary judgment, the trial court

Bosque Trading Enterprises, Inc. v. Business Loan Center, LLC. Page 9 appropriately granted BLC's traditional motion for summary judgment. 2 We overrule

issue one.

Third-Party Defendants

Bosque complains in its third issue that the trial court erred by granting BLC's

and Stewart Title Guaranty Company's motions to strike third-party defendants

pursuant to rule 38(a) of the rules of civil procedure. Rule 38(a) allows a defendant to

add a third-party defendant to a cause of action within thirty days of the filing of the

defendant's original answer, but requires that leave of court be obtained to add third-

party defendants after that initial thirty days. TEX. R. CIV. P. 38(a). Bosque does not

argue that it attempted to obtain leave of court or that the parties added were not

properly classified as third-party defendants, so we will not address those issues.

Rather, Bosque contends that it was an abuse of discretion for the trial court to apply

the rule to this proceeding. We disagree. Rule 38 is clear that leave of court is required

to add third-party defendants. Bosque did not attempt to comply with the rule. The

trial court did not abuse its discretion by granting the motions to strike the third-party

defendants. We overrule issue three.

2Bosque does not complain that BLC's evidence standing alone was insufficient to sustain the traditional summary judgment.

Bosque Trading Enterprises, Inc. v. Business Loan Center, LLC. Page 10 Conclusion

Finding no reversible error, we affirm the judgment of the trial court.

TOM GRAY Chief Justice

Before Chief Justice Gray, Justice Davis, and Justice Scoggins Affirmed Opinion delivered and filed October 11, 2012 [CV06]

Bosque Trading Enterprises, Inc. v. Business Loan Center, LLC. Page 11