GMAC as Subrogee of Ed Whited and State Farm Insurance as Subrogee of David Mallow v. Fleetwood Enterprises, Inc., and Fleetwood Motor Homes of Pennsylvania, Inc.

• Court: Court of Appeals of Texas
• Decided: March 18, 2009
• Docket: 10-08-00055-CV
• Status: Published

Opinion

IN THE TENTH COURT OF APPEALS

No. 10-08-00055-CV

GMAC, AS SUBROGEE OF ED WHITED, AND STATE FARM INSURANCE, AS SUBROGEE OF DAVID MALLOW, Appellants v.

FLEETWOOD ENTERPRISES, INC., AND FLEETWOOD MOTOR HOMES OF PENNSYLVANIA, INC., Appellees

From the 52nd District Court Coryell County, Texas Trial Court No. CAC-02-34258

MEMORANDUM OPINION

GMAC, as subrogee of Ed Whited, and State Farm Insurance, as subrogee of

David Mallow (“GMAC”) sued Fleetwood Enterprises, Inc. and Fleetwood Motor

Homes of Pennsylvania, Inc. to recover amounts paid to insureds Whited and Mallow

as the result of a fire that originated in a mobile home manufactured by Fleetwood and

owned by Whited. The trial court mailed notice of intent to dismiss for want of prosecution to the former address of GMAC’s counsel and subsequently dismissed the

lawsuit. In one issue, GMAC challenges the dismissal on grounds that it did not receive

notice. We reverse and remand.

RESTRICTED APPEAL

A restricted appeal is available for the limited purpose of providing a party that

did not participate at trial with the opportunity to correct an erroneous judgment.

Campbell v. Fincher, 72 S.W.3d 723, 724 (Tex. App.—Waco 2002, no pet.). It must: (1) be

brought within six months after the judgment is signed; (2) by a party to the suit; (3)

who did not participate at trial; and (4) the error complained of must be apparent from

the face of the record. Id; see TEX. R. APP. P. 26.1(c); see also TEX. R. APP. P. 30. The parties

do not dispute the first three requirements, leaving only the issue of whether GMAC

demonstrates error on the face of the record. See Campbell, 72 S.W.3d at 725.

ANALYSIS

A trial court may dismiss a suit when (1) a party fails to appear for a trial or

hearing; or (2) it is not disposed of within the time standards given by the Supreme

Court. Dueitt v. Arrowhead Lakes Prop. Owners, Inc., 180 S.W.3d 733, 737 (Tex. App.—

Waco 2005, pet. denied); see TEX. R. CIV. P. 165a(1), (2). A party must first be provided

with notice and an opportunity to be heard. See Dueitt, 180 S.W.3d at 737; see also TEX. R.

CIV. P. 165a(1). Failure to provide adequate notice of intent to dismiss requires reversal.

See Dueitt, 180 S.W.3d at 737. We review a dismissal for want of prosecution under an

abuse-of-discretion standard. See MacGregor v. Rich, 941 S.W.2d 74, 75 (Tex. 1997).

GMAC v. Fleetwood Enters., Inc. Page 2 When GMAC filed suit, counsel’s office was located on Green Oaks Boulevard.

The trial court mailed the first notice of intent to dismiss to this address. The case was

retained. The trial court mailed a second notice to Green Oaks. In an unopposed

motion to retain and cover letter, GMAC’s counsel listed his new North Little School

Boulevard address. The order granting the motion also listed this address. A third

notice of intent to dismiss was later mailed to Green Oaks and returned, marked

“RETURN TO SENDER,” “NOT DELIVERABLE AS ADDRESSED,” and “UNABLE TO

FORWARD.” The trial court dismissed the lawsuit. A letter advising GMAC of the

dismissal was also returned. Upon discovering the dismissal, GMAC’s counsel mailed

a letter to the trial court asking that his address be updated and stating that he never

received notice of intent to dismiss because it was mailed to Green Oaks.

Citing Dickerson v. Sonat Exploration Co., 975 S.W.2d 339 (Tex. App.—Tyler 1998,

pet. denied), Transoceanic Shipping Co. v. General Universal Systems, 961 S.W.2d 418 (Tex.

App.—Houston [1st Dist.] 1997, no pet.), and Osterloh v. Ohio Decorative Products, 881

S.W.2d 580 (Tex. App.—Houston [1st Dist.] 1994, no pet.), GMAC contends that proper

notice was not provided in accordance with Rule 165a.

In Dickerson, a notice of intent to dismiss and order of dismissal were mailed to

counsel’s former address and returned undeliverable. See Dickerson, 975 S.W.2d at 340-

41. Counsel had filed an address change with clerks in surrounding counties, including

the clerk of the county where the Dickerson case was pending. Id. at 341. The clerk

could not locate this notification. Id. The papers on file with the court included

counsel’s former and current addresses. Id. The Tyler Court held, “[W]hen the court

GMAC v. Fleetwood Enters., Inc. Page 3 initiates a decision to dismiss, a duty is placed on it to see that all proper notice is made

‘from the docket or the papers on file with the court.’” Id. at 342. Because “notice is

mandatory and involves a constitutionally protected right,” “when notices are returned

undeliverable, [the court or clerk] should reexamine the file to determine if there is

evidence of a more recent address.” Id.

In Transoceanic, a notice of trial setting was mailed to Transoceanic’s counsel’s

former address and returned undeliverable. See Transoceanic, 961 S.W.2d at 419-20. The

trial court granted a default judgment. Id. at 419. “[E]vidence in the record indicating

that Transoceanic did not receive the trial setting notice mailed by the clerk

constitute[d] error on the face of the record.” Id. at 420. Whether Transoceanic’s

counsel was at fault by failing to provide a current mailing address was not a

consideration on appeal by writ of error, a non-equitable proceeding. See id.

In Osterloh, the trial court mailed a notice of intent to dismiss, a dismissal order,

and notice of the dismissal to the former address of Osterloh’s attorney. See Osterloh,

881 S.W.2d at 581. All documents filed by the attorney listed his correct address, but the

incorrect address was listed in the district clerk’s attorney register. Id. Osterloh

brought a bill of review to set aside the dismissal, arguing that “court personnel made a

mistake or error by failing to send the notices to the address shown in the papers on file

with the court.” Id. at 582. The First Court agreed: “The papers on file with the court in

this case reflect that [Osterloh’s] counsel’s address was on Post Oak;” the clerk erred by

relying on the register. Id.

GMAC v. Fleetwood Enters., Inc. Page 4 In light of these cases, GMAC contends that error is apparent on the face of the

record because notice was mailed to the incorrect address and returned undeliverable.

In response, Fleetwood maintains that GMAC’s counsel had a duty to notify the trial

court of an address change and was negligent by failing to do so. However, this is a

restricted appeal, not a bill of review.1 See TEX. R. APP. P. 30 (restricted appeal); see also

Caldwell v. Barnes, 154 S.W.3d 93, 96 (Tex. 2004) (equitable bill of review). In a restricted

appeal, GMAC need not show diligence or lack of negligence. See Texaco v. Central

Power & Light Co., 925 S.W.2d 586, 590 (Tex. 1996) (“As in an ordinary appeal, a writ of

error appellant is not required to show diligence or lack of negligence before its

complaints will be heard.”); see also TEX. R. APP. P. 30 (“Restricted appeals replace writ

of error appeals”); Transoceanic, 961 S.W.2d at 420. We reject Fleetwood’s argument.2

Fleetwood further argues that Dickerson, Transoceanic, and Osterloh are

“outdated” and distinguishable. Fleetwood contends that, unlike Dickerson, this case

involves three dismissal settings, counsel did not argue that he attempted to notify the

trial court of an address change, counsel failed to provide a correct address even after

1 Fleetwood argues that GMAC filed a bill of review with the trial court before filing this restricted appeal. A copy of the bill of review is attached as an exhibit to Fleetwood’s brief, but is neither file- marked nor contained in the record. See Mitchell v. Citifinancial Mortg. Co., 192 S.W.3d 882, 883 (Tex. App.—Dallas 2006, no pet.) (We “may not consider any matters that are outside the appellate record.”).

2 In support of this argument, Fleetwood relies on Abou-Trabi v. Best Indus. Uniform Supply, Inc., No. 14-02-01000-CV, 2003 Tex. App. LEXIS 8514 (Tex. App.—Houston [14th Dist.] Oct. 2, 2003, no pet.) (mem. op.) and Hernandez v. Koch Machinery Co., 16 S.W.3d 48 (Tex. App.—Houston [1st Dist.] 2000, pet. denied). Both cases address the third prong of a bill of review analysis, whether the dismissal was free from the petitioner’s own fault or negligence, and involve a finding that the petitioners were negligent by failing to provide correct addresses to the trial court. See Abou-Trabi, 2003 Tex. App. LEXIS 8514, at *12; see also Hernandez, 16 S.W.3d at 58-60.

GMAC v. Fleetwood Enters., Inc. Page 5 receiving the second notice of intent to dismiss mailed to Green Oaks, and GMAC’s

counsel should have anticipated a third setting when he allowed the case to “languish.”

Fleetwood also contends that Withrow v. Schou, 13 S.W.3d 37 (Tex. App.—

Houston [14th Dist.] 1999, pet. denied), not Transoceanic, applies the proper standard.

In Withrow, the trial court mailed notice of trial setting to Withrow’s attorney at the

address on file. See Withrow, 13 S.W.3d at 39. The notice was returned undeliverable.

Id. The trial court granted a post-answer default judgment. Id. On writ of error, the

Fourteenth Court disagreed with Transoceanic:

There is no error “apparent from the face of the record” when the trial court or clerk fully complies with Rule 245 by mailing notice of the trial setting to appellant’s attorney of record at his last known address. Neither Rule 245 nor the due process clause absolutely require actual notice of a trial setting, as the Transoceanic Shipping court and the dissent in this case imply. This misallocates the respective duties and creates a potential for abuse. It is implicit in Rule 8 that an attorney in charge is responsible for notifying the court and opposing counsel of any change in his address immediately and certainly before any address forwarding order has expired. Similarly, [Rule] 21a specifies that notices be sent to the party’s last know[n] address, thus imposing a responsibility on the person to be notified to keep the court and parties apprised of their correct and current address. Once an attorney appears on the initial pleadings, “Thereafter, until such designation is changed by written notice to the court and all other parties in accordance with Rule 21a, said attorney in charge shall be responsible of the suit as to such party.”

Id. at 41 (internal citations and footnotes omitted). The Fourteenth Court held, “The

clerk has a duty to notify the parties of trial settings and the party has a continuing duty

to specify where that notice will be sent.” Id. at 41-42. No error was apparent on the

face of the record because the trial court satisfied Rule 245 and “acted reasonably under

GMAC v. Fleetwood Enters., Inc. Page 6 the circumstances in fulfilling its due process obligations” by mailing the notice to

Withrow’s counsel at the last address given. Id. at 42.

Finally, citing Hernandez v. Koch Machinery Co., 16 S.W.3d 48 (Tex. App.—

Houston [1st Dist.] 2000, pet. denied), Fleetwood distinguishes Osterloh. In Hernandez,

the First Court noted that Osterloh involved a situation where the “clerk’s action was [] a

mistake, not misinformation.” Hernandez, 16 S.W.3d at 58 (citing Osterloh, 881 S.W.2d at

582). Fleetwood argues that the district clerk relied on the address found in GMAC’s

initial pleadings, without having been alerted to the new address on file. Citing

Withrow, Fleetwood maintains that GMAC had “ample opportunity” to ensure that the

trial court had a correct mailing address and must bear the burden of its failure to do so.

Unlike Withrow, the notice in this case was not mailed to counsel’s last known

address. The last documents filed by GMAC before the dismissal, i.e., the cover letter,

motion to retain, and order granting the motion, listed counsel’s current Little School

Road address. These documents were filed in response to the second notice, which was

mailed to the Green Oaks address and apparently received by GMAC’s counsel.

Certainly, this placed counsel on notice that the trial court was using an old mailing

address and needed the correct address. Counsel did not file a formal address change,

but did file documents listing the correct address. Thus, as in Dickerson, the papers on

file with the court included both former and current addresses. See Dickerson, 975

S.W.2d at 341. When the notice was returned, court personnel should have

“reexamine[d] the file to determine if there is evidence of a more recent address.” Id.

Regardless of the number of previous notices, GMAC was still entitled to proper notice

GMAC v. Fleetwood Enters., Inc. Page 7 of the third dismissal. See id. at 342; see also Mann v. Fleetwood Mgmt. Corp., No. 01-99-

00927-CV, 2000 Tex. App. LEXIS 1747, at *4 (Tex. App.—Houston [1st Dist.] March 16,

2000, no pet.) (not designated for publication) (“Although attorneys would be wise to

provide their current address to the District Clerk, they are under no affirmative duty to

do so.”).

In light of pleadings listing the correct address of GMAC’s counsel, notice mailed

to the incorrect address, and envelopes returned undeliverable, the record

demonstrated that GMAC did not receive notice of the intent to dismiss for want of

prosecution. Error is, therefore, apparent from the face of the record. See Dickerson, 975

S.W.2d at 341-42; see also Transoceanic, 961 S.W.2d at 420; Mann, 2000 Tex. App. LEXIS

1747, at *5 (“The evidence in this record--a petition and motion bearing the current

address, citations and a notice of intent to dismiss showing the former address, and an

envelope marked ‘Forwarding Address Expired’--is sufficient to show error on the face

of the record.”). We sustain GMAC’s sole issue, reverse the trial court’s judgment, and

remand this cause for further proceedings consistent with this opinion.

FELIPE REYNA Justice Before Chief Justice Gray, Justice Reyna, and Justice Davis Reversed and remanded Opinion delivered and filed March 18, 2009 [CV06]

GMAC v. Fleetwood Enters., Inc. Page 8