Rava Square Homeowners Association v. Kevin J. Swan

Opinion

Reversed and Remanded and Memorandum Opinion filed September 30, 2008

Reversed and Remanded and Memorandum Opinion filed September 30, 2008.

In The

Fourteenth Court of Appeals

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NO. 14-07-00521-CV

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RAVA SQUARE HOMEOWNERS ASSOCIATION, Appellant

V.

KEVIN J. SWAN, Appellee

On Appeal from the 80th District Court

Harris County, Texas

Trial Court Cause No. 2006-47681

M E M O R A N D U M    O P I N I O N

Appellant, Rava Square Homeowners Association (ARava@), challenges the dismissal of its breach of contract claim against appellee, Kevin J. Swan.  Rava contends that the trial court erred in (1) dismissing Rava=s suit for want of prosecution; (2) refusing to grant Rava=s verified motion to reinstate the suit; and (3) refusing to grant Rava=s motion for no-answer default judgment and Rava=s amended motion for no-answer default judgment.  We reverse and remand.

Background

Rava is a residential homeowners association.  Swan owns a townhome managed by Rava located at 5523 Feagan, Houston, Texas 77007.  In September 2005, Swan agreed to pay $50 per month to a fund administered by Rava for maintenance and repair of common areas; common expenses; and improvements to association properties.  Swan failed to make the required monthly payments.

Rava sued Swan on August 3, 2006 to collect the unpaid monthly maintenance fees he owed.  Rava attempted without success to serve Swan at 5523 Feagan on eight occasions from August 10, 2006 through October 3, 2006.  Rava also attempted to serve Swan by sending the citation and petition to 5523 Feagan via certified mail, return receipt requested.  This attempt also failed and the citation was returned as Aunclaimed@ on September 23, 2006.

On October 9, 2006, Rava filed a motion asking the court to authorize substitute service on Swan by affixing a true copy of the citation and attached petition to the front door of 5523 Feagan.  See Tex. R. Civ. P. 106(b)(2).  The trial court granted Rava=s motion in an order signed on October 27, 2006.  A return citation for this substituted service was filed with the trial court on November 10, 2006, indicating that substitute service had been affixed to Swan=s door at 5523 Feagan at 12:30 p.m. on November 8, 2006.  Swan=s deadline to file an answer was December 6, 2006.  Swan failed to file an answer by that date.

On February 8, 2007, with Swan still having failed to file an answer, Rava filed a motion for no-answer default judgment.  Rava asked for attorney=s fees totaling $2,615.  The calculation of this amount was explained in an affidavit by Rava=s counsel as including $140 for process service fees and 11 billable hours at $225 per hour.  Elsewhere in the affidavit, Rava=s counsel asserted that Rava agreed to pay $295 per hour for legal services.  No explanation is given for this discrepancy.  On March 5, 2007, the trial court heard oral argument and signed an order denying Rava=s motion for no-answer default judgment without stating a reason for doing so in the order.

Rava filed an amended motion for no-answer default judgment on March 7, 2007 asking for attorney=s fees totaling $3,245.  The calculation of this amount was explained in a new affidavit by Rava=s counsel as including 11 billable hours at $295 per hour.  Also on March 7, 2007, Rava filed a notice that its amended motion would be considered by written submission on March 19, 2007.

The trial court dismissed Rava=s suit for want of prosecution in an order signed on March 22, 2007.  This order stated that on March 12, 2007, Rava=s case Awas set for Dismissal and the Plaintiff having failed to appear, it is hereby ordered that this cause of action be and is hereby dismissed for want of prosecution.@  The trial court=s order does not further explain the reasons for this dismissal.  Both the activity inquiry and the docket sheets found in the record reference the March 22 dismissal, but provide no reasoning other than Afor want of prosecution.@  One of the docket sheets also lists a March 12, 2007 date for the case with the notation ADWOP NA,@ but includes no explanation beyond this.

Rava filed a verified motion to reinstate its case on April 3, 2007.  Rava asserted that it did not receive notice of its case being included on a March 12, 2007 dismissal docket, and that its failure to appear on that date was not intentional or the result of conscious indifference.  Rava=s counsel swore in an affidavit that he had prosecuted the case in a diligent manner.

On April 20, 2007, the court held an oral hearing on Rava=s verified motion to reinstate.  No order regarding this motion was signed, and the motion was overruled by operation of law on June 5, 2007.  See Tex. R. Civ. P. 165a(3).

Analysis

I.        Dismissal for Want of Prosecution

We review dismissal for want of prosecution for clear abuse of discretion.  Ellmossallamy v. Huntsman, 830 S.W.2d 299, 300 (Tex. App.BHouston [14th Dist.] 1992, no writ).  AA motion to reinstate shall set forth the grounds therefor and be verified by the movant or his attorney.@  Tex. R. Civ. P. 165a(3).  The trial court shall reinstate the case upon finding after a hearing that the failure was not intentional or the result of conscious indifference, but due to an accident, mistake, or other reasonable explanation.  Id.  A trial court abuses its discretion in denying reinstatement following a dismissal for want of prosecution when an attorney=s explanation for the failure to appear is reasonable.  Kenley v. Quintana Petroleum Corp., 931 S.W.2d 318, 321 (Tex. App.BSan Antonio 1996, writ denied) (citing Smith v. Babcock & Wilcox Constr. Co., 913 S.W.2d 467, 467-68 (Tex. 1995) (per curiam)).

The facts here parallel Jackson v. Thurahan, Inc., No. 14-02-00308-CV, 2003 WL 1566386 (Tex. App.BHouston [14th Dist.] Mar. 27, 2003, no pet.) (mem. op.).  In that case, plaintiff=s counsel swore in his affidavit in support of a motion for reinstatement that the matter was not docketed on his trial schedule.  Id. at *3.  Plaintiff=s counsel further asserted that he was unaware of the court=s trial setting until he received a notice of the court=s intent to dismiss the case.  Id.  This court concluded on appeal that such an explanation was reasonable, and that the record lacked evidence of intentional failure or of conscious indifference on the part of the plaintiff=s counsel.  Id.  The court then held the trial court=s denial of reinstatement to be an abuse of discretion.  Id.

Thurahan=s reasoning applies with equal force here.  Rava=s counsel swore in his affidavit that he had no notice of the case=s inclusion on a March 12, 2007 dismissal docket.  Rava=s counsel further swore in his affidavit that he had diligently prosecuted the case, and that his absence on March 12, 2007 was neither intentional nor the result of conscious indifference.  Like the explanation given by plaintiff=s counsel in Thurahan, that given by Rava=s counsel is reasonable.  Additionally, the record in this case contains no evidence of intentional failure or of conscious indifference by Rava=s counsel.  Rava was actively pursuing the case and attempting to obtain a default judgment at the time of dismissal.  Under these circumstances, the trial court abused its discretion in denying Rava=s verified motion for reinstatement.

We sustain Rava=s issue regarding reinstatement.

In light of this court=s decision regarding Rava=s motion for reinstatement, Rava=s complaint regarding the initial dismissal for want of prosecution is at most a harmless error and therefore is overruled.  See Polk v. Sw. Crossing Homeowners Ass=n, 165 S.W.3d 89, 94-95 (Tex. App.BHouston [14th Dist.] 2005, pet. denied) (failure to provide notice and opportunity to be heard before dismissing action constitutes harmless error where hearing is granted on motion to reinstate following dismissal for want of prosecution).

We overrule Rava=s issue regarding the initial dismissal.

II.       Requests for No-Answer Default Judgment

While the denial of default judgment ordinarily is an unappealable interlocutory order, such a denial may be considered on appeal when the denial is challenged in an appeal from a final judgment or order.  Aguilar v. Livingston, 154 S.W.3d 832, 833 (Tex. App.BHouston [14th Dist.] 2005, no pet.).  Thus, the denial of a motion for default judgment may be appealed after a dismissal for want of prosecution.  Id.; see also Crown Asset Mgmt., LLC v. Burnett, No. 05-07-01186-CV, 2008 WL 3197098, at *3 (Tex. App.BDallas Aug. 8, 2008, no pet.) (mem. op.) (citing Aguilar, 154 S.W.3d at 833).

The denial of a default judgment is reviewed under an abuse of discretion standard.  Aguilar, 154 S.W.3d at 833.  A plaintiff may seek a default judgment if the time has passed for the defendant to answer, the defendant has not answered, and the citation with the process officer=s return has been on file with the court clerk for ten days.  See Tex. R. Civ. P. 107, 239.  While there are no presumptions favoring valid issuance, service, and return of citation, the officer=s return is considered prima facie evidence of the facts recited therein.  Fowler v. Quinlan Indep. Sch. Dist., 963 S.W.2d 941, 943 (Tex. App.BTexarkana 1998, no pet.).

A trial court is to grant a plaintiff=s motion for default judgment if the plaintiff=s petition properly states a cause of action and the trial court=s jurisdiction, fair notice is given to the defendant, and there is no evident invalidity to the plaintiff=s claim.  Jackson v.  Biotectronics, Inc., 937 S.W.2d 38, 42 (Tex. App.BHouston [14th Dist.] 1996, no writ); see also Aguilar, 154 S.W.3d at 835 (A. . . because appellee failed to answer the suit, and a valid return of service was on file for at least ten days . . . appellant was entitled to a default judgment@).  Upon reversal of a denial of a default judgment, remand is warranted when a fact dispute exists regarding unliquidated damages.  Aguilar, 154 S.W.3d at 835.

The trial court=s dismissal of this case constituted a final order, thus allowing Rava to appeal the denial of its motions for no-answer default judgment.  See Aguilar, 154 S.W.3d at 833; Crown Asset, 2008 WL 3197098, at *3.  The record clearly indicates that the time for Swan to answer had long since passed.  Swan never filed an answer.  By the time Rava filed its initial motion for default judgment, the return of citation had been on file for nearly two months.  The return indicates that service was affixed to Swan=s door, as allowed by the trial court=s order on substitute service, on November 8, 2006.  All other requisites for obtaining a default judgment have been satisfied on this record.  Based on these circumstances, the trial court abused its discretion in denying Rava=s request for a default judgment.  See Aguilar, 154 S.W.3d at 835 (trial court abused discretion in denying motion for default judgment where defendant failed to answer suit and valid return of service was on file at least ten days when plaintiff moved for default judgment).

Rava asks us to render a default judgment in its favor on appeal.  While this court properly may reverse the trial court=s denial of default judgment, it is beyond our authority to determine damages and to render judgment on disputed facts.  See Aguilar, 154 S.W.3d at 835.  The record contains conflicting calculations of attorney=s fees.  Any conflict regarding damages must be resolved in the trial court.  See Tex. R. Civ. P. 241, 243; see also Aguilar, 154 S.W.3d at 835 & n.5.

We sustain Rava=s issue regarding denial of its request for a no-answer default judgment.

Conclusion

The trial court=s order of dismissal for want of prosecution is reversed, and the cause is remanded for further proceedings consistent with this opinion.

/s/        William J. Boyce

Justice

Judgment rendered and Memorandum Opinion filed September 30, 2008.

Panel consists of Justices Yates, Seymore and Boyce.