The end of the courts of appeals’ fiscal year is upon us and as a result we are seeing a stream of opinions. One recent opinion that was of particular note is Crown Asset Management, L.L.C. v. Loring. It is noteworthy for at least two reasons: (1) it was issued by the Dallas Court of Appeals sitting en banc–a rare occurrence, and (2) its holdings are surprising, if not controversial–controversial enough to draw a three-justice dissent, another rarity This case may merit watching in the event it proceeds further. Because of its importance, all three of Reverse & Render’s bloggers have decided to review this case en banc, and therefore join the following summary.
Bottom line, the Court held that a trial court did not abuse its discretion by dismissing a case for want of prosecution four months after it was filed while the plaintiff was actively attempting to secure a default judgment. Readers may want to read the majority and dissenting opinions for themselves. We summarize and briefly discuss the three holdings below.
Crown filed suit to collect on an alleged deficiency following foreclosure on collateral securing a contract with Loring. Embedded in the petition were requests for admission. Almost immediately after the suit was filed, the trial court sent a letter to Crown’s counsel advising that the case had been placed on the dismissal docket and it would be dismissed within approximately 4 months unless Crown took one of several alternatives, one of which was to prove up a default judgment if no answer was filed. We recently blogged on an opinion with similar procedural treatment from the same trial court judge. In compliance with the court’s notice, Crown timely moved for default judgment and sent a proposed order of default to the trial court. The trial court returned the proposed judgment unsigned stating that the motion was defective for several reasons, including that the petition did not give fair notice of the claim. Crown filed an amended motion, which received a similar response. The trial court then dismissed the case for want of prosecution and Crown appealed, raising two issues: (1) whether the trial court erred in failing to grant its motion for default judgment and (2) whether the trial court erred in dismissing for want of prosecution.
The threshold question addressed by both majority and dissent is whether error was preserved as to the complaint that the trial court should have granted Crown’s motion for default judgment. Appellate Rule 33.1 requires a party to obtain a ruling as a predicate to complaint and if the court will not rule, the complaining party must object to the refusal to rule. Here’s the first BIG holding: The majority treated the trial court’s refusal to sign the proposed judgment as a denial of the requested relief and overruled unnamed previous opinions to the contrary. The dissent argued that error was not preserved because there was no ruling and Crown did not object to the failure to rule. It now appears that if a party submits a proposed order and the trial court does not sign it, that may be sufficient to preserve error.
Next, the majority opinion held that the "denial" of the default judgment was not error because Crown’s pleading failed to give fair notice of the claim asserted. The dissent took issue with this "fair notice" holding and also discussed each of the trial court’s other listed reasons for refusal to grant the default and systematically determined the reasons given were invalid for one reason or another. Of note is the majority’s implicit approval of the trial court’s refusal to give effect to the admissions contained in, and served with, the plaintiff’s petition. With no explanation, the trial court stated that the admissions must be served after the petition. The dissent opined, without comment from the majority, that there is no authority for the proposition that admissions cannot be served with the petition and that the admissions supported the plaintiff’s request for default judgment.
The Court’s resolution of the third and final issue is perhaps the most startling. The majority held that there was no abuse of discretion in dismissing the suit for want of prosecution. It appears that the majority concluded there was no abuse of discretion because Crown did not respond to either a September 10th or September 15th notice that returned the default judgment before the case was dismissed the following October 2nd. The majority characterized this as "aggressive administration of the court’s docket timetable" and concluded there was no abuse of discretion, but it cautioned that "such aggressive administration in other cases may result in an injustice." This phrasing implies that there was no injustice in this case, and it appears that the majority equates injustice with abuse of discretion. The dissent pointed out that "the majority takes no position as to whether appellant acted with due diligence in prosecuting its case." The dissent also questioned how the case could be dismissed for want of prosecution in the face of Crown’s attempts to obtain a default judgment. Finally, the dissent argued that to the extent the majority treated the dismissal for want of prosecution as proper under the trial court’s inherent power to sanction, it erred by doing so.