South Texas Innovations, LLC D/B/A STI, LLC v. Rise Residential Construction, LP, GCRE/TX Main MF, LLC, and LCAR Park View, LLC

CourtCourt of Appeals of Texas
DecidedDecember 31, 2018
Docket02-18-00021-CV
StatusPublished

This text of South Texas Innovations, LLC D/B/A STI, LLC v. Rise Residential Construction, LP, GCRE/TX Main MF, LLC, and LCAR Park View, LLC (South Texas Innovations, LLC D/B/A STI, LLC v. Rise Residential Construction, LP, GCRE/TX Main MF, LLC, and LCAR Park View, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
South Texas Innovations, LLC D/B/A STI, LLC v. Rise Residential Construction, LP, GCRE/TX Main MF, LLC, and LCAR Park View, LLC, (Tex. Ct. App. 2018).

Opinion

In the Court of Appeals Second Appellate District of Texas at Fort Worth ___________________________ No. 02-18-00021-CV ___________________________

SOUTH TEXAS INNOVATIONS, LLC D/B/A STI, LLC, Appellant

V.

RISE RESIDENTIAL CONSTRUCTION, LP, GCRE/TX MAIN MF, LLC, AND LCAR PARK VIEW, LLC, Appellees

On Appeal from the 211th District Court Denton County, Texas Trial Court No. 17-5219-211

Before Sudderth, C.J.; Meier and Kerr, JJ. Memorandum Opinion by Justice Kerr MEMORANDUM OPINION

After South Texas Innovations, LLC d/b/a STI, LLC failed to respond to

merits-preclusive requests for admissions, they were deemed admitted, and Rise

Residential Construction, LP, GCRE/TX Main MF, LLC, and LCAR Park View, LLC

moved for summary judgment based on those admissions. STI moved to withdraw

the admissions, but the trial court denied the motion and granted summary judgment

for Rise, GCRE, and LCAR. STI has appealed, complaining in two issues that the trial

court erred by denying STI’s motion to withdraw the deemed admissions and by

granting summary judgment against STI based on those admissions. We will reverse

and remand.

I. Background

The underlying dispute involves a multifamily-housing construction project in

Little Elm, Texas, owned by GCRE and LCAR. Rise was the general contractor on

the project, and STI was Rise’s concrete subcontractor.

In September 2016, Rise sued GCRE for its alleged failure to pay Rise for work

done on the project. GCRE countersued. In November 2016, STI intervened, alleging

claims against GCRE, LCAR, and Rise for Rise’s alleged failure to pay for labor,

materials, and equipment STI provided under the subcontract and seeking to

foreclose on the mechanic’s and materialmen’s liens STI had filed against the

2 property. When STI intervened, it was represented by Brian Tagtmeier, an attorney in

Houston, Texas, who had represented STI in various matters since mid-2014.

About a week after STI intervened, the trial court (on Rise’s motion) ordered

Rise, GCRE, and LCAR (but not STI) to mediation and arbitration and stayed the

lawsuit pending the outcome of those proceedings. Even though it was not subject to

the trial court’s order, STI mediated with Rise, GCRE, and LCAR. But the mediation

was unsuccessful, and Rise, GCRE, and LCAR submitted their claims to arbitration.

STI agreed to submit its claims to arbitration, but it never entered an appearance in

that proceeding.

In May 2017, Rise, GCRE, and LCAR moved to dismiss STI’s claims as

sanctions for its failure to submit its claims to arbitration after agreeing to do so. They

alternatively moved the trial court to sever STI’s claims. In July 2017, the trial court

lifted the stay as to STI’s claims and severed them into a separate cause of action.

Around this time (late spring and early summer 2017), Tagtmeier stopped

communicating with STI and opposing counsel. In late June and throughout July,

Damian Abreo, another Houston attorney, communicated with Rise’s and GCRE and

LCAR’s counsel about the case and told them that he and his firm—Johnson Deluca

Kurisky & Gould, P.C.—would be replacing Tagtmeier as STI’s counsel. But Abreo

stopped communicating with counsel for Rise, GCRE, and LCAR, and he and his

firm did not file an appearance in the lawsuit at that time.

3 On August 1, 2017, Rise served requests for admissions on STI through

Tagtmeier. Ten days later, GCRE and LCAR served nearly identical requests on STI

through Tagtmeier. Because STI did not timely respond to either set of requests, they

were deemed admitted. See Tex. R. Civ. P. 198.2(a), (c). In early October 2017, Rise,

GCRE, and LCAR moved for summary judgment on STI’s claims based solely on the

deemed admissions. Both motions were set for hearing on November 21, 2017.

On November 9, 2017, Abreo and Adam Diamond, another attorney with

Johnson DeLuca Kurisky & Gould, filed a notice of appearance as counsel for STI.

The following day, STI moved to continue the summary-judgment hearing. On

November 14, 2017, STI answered both sets of admissions, responded to the

summary-judgment motions, and moved to withdraw the deemed admissions. A week

later, the trial court continued the summary-judgment hearing to December 5 and

gave STI an opportunity to amend its pleadings. STI amended its summary-judgment

response and its motion to withdraw the deemed admissions, which was supported by

a sworn declaration from Tagtmeier and affidavits from Abreo and Gary Haymond,

STI’s manager.

According to Tagtmeier’s declaration, he had suffered from depression for

many years but had been able to manage his illness through medication, therapy, and

lifestyle changes. But after his father’s death in July 2016, his depression worsened,

and he developed other health problems, which contributed to his depression. Over

time, his depression continued to worsen, and in July 2017, he began having suicidal

4 thoughts. In late August 2017, Hurricane Harvey hit Houston, causing catastrophic

damage. The storm “severely impacted” Tagtmeier’s depression and caused many

family emergencies but, as Tagtmeier admitted, did not cause any work-related

emergencies. By early October 2017, he had formulated several suicide plans and, on

two occasions, “went to places to jump and couldn’t.” Tagtmeier was eventually

hospitalized for several days in October and November 2017.

Even though Tagtmeier was suffering from debilitating depression, he served

as an arbitrator in two arbitration proceedings in August and September 2017. But

Tagtmeier did not recall receiving either set of requests for admissions. Had he known

about the requests, he would have forwarded them to STI to answer.

Abreo stated in his affidavit that although he had communicated with opposing

counsel before filing an appearance for STI, he did not know about the requests for

admissions until November 8, the day before he filed his appearance. Haymond

averred that he was not aware of the requests until Abreo told him about them on

November 9 and that had he or STI known of them earlier, STI would have

responded to them. Haymond further stated that once STI learned about the requests

for admissions, STI cooperated with its attorneys to answer them.

In response to STI’s motion, Rise, GCRE, and LCAR argued that STI had

failed to show good cause for not responding to the admission requests. They

complained that STI had known about Tagtmeier’s condition since May and that

Abreo and his firm should have appeared for STI in the lawsuit in June or July instead

5 of waiting until November. Rise’s CEO, Dewey Stevens (whose affidavit was attached

to Rise’s response), informed Haymond several times in the summer of 2017 that

Tagtmeier had stopped communicating with Rise’s attorneys and that these

communication issues were affecting resolution of the lawsuit. When Abreo stopped

communicating with Rise’s attorneys after having first contacted them in July about

entering an appearance for STI, Stevens contacted Haymond again about the

communication issues, but he did not respond.

Rise, GCRE, and LCAR further argued that in August and September 2017—

the period during which the requests for admissions were served and STI’s responses

were due—Tagtmeier continued to practice law and served as an arbitrator, even

though his depression was worsening.

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South Texas Innovations, LLC D/B/A STI, LLC v. Rise Residential Construction, LP, GCRE/TX Main MF, LLC, and LCAR Park View, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/south-texas-innovations-llc-dba-sti-llc-v-rise-residential-texapp-2018.