in Re Dan Wheeler Wrecker Service, Inc. and Gregory Hembree

FILED IN 1st COURT OF APPEALS HOUSTON, TEXAS 12/29/2014 12:00:00 AM CHRISTOPHER A. PRINE Clerk

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1 REPORTER'S RECORD 2 VOLUME 1 OF 1

3 TRIAL COURT CAUSE NO. CV28384 4 5 CHARLES E. WATKINS * IN THE DISTRICT COURT 6 * 7 VS. * CHAMBERS COUNTY, TEXAS 8 * 9 DAN WHEELER WRECKER * 10 SERVICE, INC., ENVIRO * 11 IRON AND METALS, L.L.C., * 12 BILAL MALIK D/B/A ENVIRO * 13 RECYCLING, D/B/A ENVIRO * 14 METALS * 344TH JUDICIAL DISTRICT 15 16 * * * * * * * * * * * * * * * * * * * * * * * * * * * *

17 MOTION FOR LEAVE TO DESIGNATE RESPONSIBLE THIRD PARTY

18 * * * * * * * * * * * * * * * * * * * * * * * * * * * * 19 20 On the 29th day of August, 2014, the following

21 proceedings came on to be heard in the above-entitled

22 and numbered cause before the Honorable Randy McDonald, 23 Judge Presiding, held in Anahuac, Chambers County,

24 Texas: 25 Proceedings reported by Machine Shorthand.

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 A P P E A R A N C E S 2 3 FOR THE PLAINTIFF: 4 Frederick F. Hoelke

5 SBOT NO. 09775600 6 LAW OFFICES OF FREDERICK F. HOELKE

7 26545 IH 10 West, Suite 100 8 Boerne, Texas 78006

9 10 FOR THE DEFENDANTS:

11 Stewart K. Schmella 12 SBOT NO. 24033041

13 McCORMICK, LANZA & McNEEL, L.L.P.

14 4950 Bissonnet 15 Bellaire, Texas 77401 16 17 18 19 20 21 22 23 24 25

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 VOLUME 1 2 MOTION FOR LEAVE TO DESIGNATE RESPONSIBLE THIRD PARTY

3 PAGE 4 Case Called 4

5 Defendant's Arguments 4 6 Plaintiff's Arguments 12

7 Court's Ruling 20 8 Reporter's Certificate 33

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 THE COURT: Charles Watkins v. Dan Wheeler 2 Wrecker Service.

3 MR. SCHMELLA: Good morning. 4 THE COURT: Motion for Leave to Designate

5 Third Party. Is it opposed? 6 MR. HOELKE: Yes, sir.

7 THE COURT: We'll get back to that. 8 (PAUSE IN PROCEEDINGS)

9 THE COURT: Charles Watkins v. Dan 10 Wheeler.

11 Okay. Gentlemen, if I recall this case, 12 we've been here twice on venue. We've decided venue --

13 or at least the Court has decided venue.

14 MR. SCHMELLA: That's right, Judge. 15 THE COURT: And now we are here on a 16 Motion to Leave to Designate a Responsible Third Party.

17 I think that that's your Motion.

18 MR. SCHMELLA: Yes, it is, Judge. 19 THE COURT: And you're trying to, I take 20 it, add a -- what you consider to be a more responsible

21 third party?

22 MR. SCHMELLA: We're -- we're asking the 23 Court to grant leave to designate a responsible third

24 party. We're not trying to join the person. 25 THE COURT: Oh, you're not trying to join

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 them? 2 MR. SCHMELLA: No. We're -- we're moving

3 under Chapter 33 of the Civil Practices -- 4 THE COURT: Okay.

5 MR. SCHMELLA: -- and Remedies Code, but I 6 just wanted to make sure that -- actually, what we're

7 trying to do -- we're not trying to add the party as a 8 third-party defendant or anything like that and --

9 THE COURT: So, what is the purpose, then? 10 MR. SCHMELLA: Your Honor, the purpose is

11 that under Chapter 33 of the Civil Practices and 12 Remedies Code, the jury is entitled to consider whether

13 a responsible third party is a cause or contributor to

14 the harm alleged by the plaintiffs with respect to any 15 tort action; and in this particular case -- and by the 16 way, for the record, I'm Stewart Schmella for --

17 THE COURT: Yeah.

18 MR. SCHMELLA: -- defendants Dan Wheeler 19 Wrecker Service and Gregory Hembree. 20 THE COURT: Thank you very much.

21 And that's Fred Hoelke for --

22 MR. HOELKE: Frederick Hoelke for Charles 23 Watkins, plaintiff.

24 THE COURT: This is Cause No. 28384. 25 MR. SCHMELLA: And, Your Honor, under

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 Chapter 33, the legislature has made it plain that it 2 applies to all tort causes of action and all -- and,

3 furthermore, claims brought under the DTPA. And 4 Mr. Watkins has asserted -- he apparently narrowed some

5 of his claims based on his most recent petition. But 6 he's still asserting a conversion claim, trespass to

7 chattels claim, both of which are tort claims, and a 8 DTPA violation. And Chapter 33 expressly provides for

9 the responsible third-party statute framework for DTPA 10 actions.

11 And really, Judge, the only question 12 that -- that's relevant today is whether the defendants

13 have provided -- have pleaded sufficient facts to

14 support the designation of Sammy Wood as a responsible 15 third party. 16 THE COURT: And who is Sammy Wood?

17 MR. SCHMELLA: Sammy Wood, Judge, is the

18 gentleman who was convicted of theft in Harris County in 19 connection with the incident. He's a person who 20 deceived everyone involved; and, again, he's pleaded

21 guilty to theft as a result of this incident.

22 And under Chapter 33, Your Honor, I submit 23 that, you know, there are sufficient facts that the

24 defendants have alleged to indicate that Mr. Wood is at 25 least, in part, responsible for the harm alleged by the

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 plaintiffs. And all that's relevant at this stage, 2 Your Honor, is whether we provided fair notice of why we

3 believe Mr. Wood is culpable. 4 Mr. Hoelke, in his response, tried to

5 argue the merits of it. And under In re: Unitec 6 Elevator -- it's 178 S.W. 3d 53 -- the Court can't

7 engage in a merits review that Mr. Hoelke would 8 essentially ask for at this time. The analysis is

9 solely limited to the sufficiency of the facts alleged. 10 And, furthermore, Your Honor, I'd like to

11 for one minute take a -- just a brief moment to address 12 what I think Mr. Hoelke will talk about in a minute.

13 Mr. Watkins filed a -- what he titled a "Further

14 Response" alleging that somehow my clients don't have 15 standing, I think, to raise this -- raise this matter 16 before the Court. And, frankly, Your Honor, I'm

17 mystified as to why that might be.

18 Mr. Hoelke, you know, indicated that Dan 19 Wheeler somehow violated the Business and Commerce Code 20 and, therefore, we could not bring any claim for

21 affirmative relief. And as an initial matter, that

22 wouldn't apply to Mr. Hembree, who is also a defendant 23 in the case. You know, he's a natural person.

24 And I guess without knowing what section 25 of the Business and Commerce Code Dan Wheeler allegedly

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 violated, I -- I can't possibly try to anticipate what 2 section of the Business and Commerce Code that Dan

3 Wheeler allegedly violated and, furthermore, apparently 4 can no longer defend the suit. That's essentially what

5 the plaintiffs are asking. And, so -- and, again, I was 6 mystified when I read it earlier this week.

7 THE COURT: Well, that -- I want to talk 8 about the practical aspect of it. What you're trying to

9 do is allow to get issues before a jury -- and if I -- 10 if I misstate this, correct me, please. Okay? But

11 you're trying to get issues before the jury indicating 12 that somebody else is responsible for this issue and,

13 yet, because they're not a party, they're not here to

14 defend their actions; in other words, they're not 15 necessarily here to say, "Well, yeah, I did all those 16 things you say I did; but by the way, your guy" -- I

17 guess in this case -- "your client is the one that hired

18 me to do it." 19 MR. SCHMELLA: Your Honor, I -- I would 20 say that that is something of a fair summation. Now, I

21 would also add two things: One, the legislature has

22 provided for this, that -- that, you know, this isn't -- 23 this isn't a brand-new scheme. The legislature has

24 had -- 25 THE COURT: Oh, I know.

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1 MR. SCHMELLA: -- a responsible 2 third-party statute now for ten years, and they've

3 expressly allowed us to go forward in this manner. 4 Furthermore, Mr. Watkins can sue Mr. Wood.

5 There's no bar from -- from -- as far as I'm aware -- 6 preventing Mr. Watkins from suing Mr. Wood as a party.

7 And, so, to the extent that they're possibly concerned 8 about an empty chair type of defense without being able

9 to, you know, have any remedy against Mr. Wood, they can 10 go after him.

11 THE COURT: Well, I'm -- I'm not actually 12 thinking about what they're saying. I'm thinking about

13 what I'm going to be doing and how I'm going to be

14 presenting this because, obviously, the desire for this 15 Court is for each of you to get a fair trial and a fair 16 hearing in this matter; and, generally speaking, trials

17 where there are not witnesses -- and I doubt if -- is he

18 not in prison? 19 MR. SCHMELLA: Your Honor, I believe as of 20 a few months ago, he was in the Angelina County Jail. I

21 intend to at least take his deposition. I don't know

22 whether he's currently incarcerated; but, again, in 23 terms of our presentation for a jury, I know I've done

24 this before where, you know, in your jury charge for 25 negligence, conversion, et cetera, it would be -- you

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 know, we're pleading comparative negligence. So, you 2 know, you add Mr. Watkins. We have, you know, the

3 defendants; and then we have a separate blank for Sammy 4 Wood.

5 THE COURT: Well, would we all agree that 6 this Sammy Wood is a witness or a potential witness?

7 MR. SCHMELLA: Yes. 8 THE COURT: And he has -- he has disposed

9 of his matters in Harris County involving this 10 particular case?

11 MR. SCHMELLA: Well, I'm not sure what you 12 mean by "disposed," Your Honor. I can tell you he

13 has --

14 THE COURT: Plead guilty. 15 MR. SCHMELLA: -- been convicted. 16 THE COURT: Yes.

17 MR. SCHMELLA: He has pleaded guilty, yes,

18 and been sentenced. 19 THE COURT: Okay. So, he's not going to 20 be able to assert a Fifth Amendment right as to this

21 area. He can assert it, but it's probably not going to

22 be upheld by the Court in a civil matter. 23 So, I guess my question is this: Instead

24 of guessing what part he might play in there, you think 25 maybe it would be better to take his deposition now and

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 then let me look at that, add that to your Motion, and 2 see if it would be a worthwhile thing to do?

3 MR. SCHMELLA: With all due respect, 4 Your Honor, no, I don't think so. I think that the

5 statute -- all that requires from us now is whether 6 we've sufficiently alleged that Mr. Wood was involved

7 and the cause of the damages sought. What you're 8 talking about is essentially a merits review in

9 determining whether we have sufficient evidence, and the 10 scheme doesn't provide for that.

11 Now, at a later date, if Mr. Watkins wants 12 to challenge whether we have sufficient evidence to go

13 forward with designating Mr. Wood and presenting a case

14 to the jury, he can do that; but, first, we need a leave 15 to designate Mr. Wood as a responsible third party. I 16 think taking the deposition -- and, furthermore, again,

17 I -- with respect to a deposition, he's already been

18 convicted of the crime arising out of this incident; 19 and, so, I don't see what a deposition -- 20 THE COURT: Well, what I --

21 MR. SCHMELLA: -- would necessarily

22 change. 23 THE COURT: And I agree with almost

24 everything you just said. I mean, I really do. The 25 question is, though, if I don't -- if I grant this and

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 then no one takes his deposition, that's what I'm 2 concerned about. There will actually never be a merit

3 review so that I can make the decision of whether I was 4 right in -- you're right to what you say. You can

5 designate -- it's the cart-before-the-horse-type-deal. 6 MR. SCHMELLA: Right.

7 THE COURT: I'm looking at the jury trial. 8 MR. SCHMELLA: Well, at least I --

9 THE COURT: And that's a merit -- that's a 10 merit issue. I agree with you.

11 MR. SCHMELLA: Well, and if I may, I think 12 the way to solve that is to -- first, I intend to take

13 his deposition, you know.

14 THE COURT: But I -- 15 MR. SCHMELLA: But I -- you know, having 16 said that, if -- hypothetically, if the deposition

17 doesn't go forward, then potentially Mr. Watkins has a

18 remedy, moving to strike the designation; and at that 19 time you can consider whether I've come forward with 20 sufficient evidence. And I think that's where the

21 deposition would fit in, not at this stage.

22 THE COURT: Well, see, I was trying to 23 solve it before I have to make that decision.

24 Mr. Hoelke? 25 MR. HOELKE: I -- I, of course, have a lot

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 to say about this matter, if it please the Court. 2 THE COURT: Well, I -- I want to address

3 the specific issue that we were just talking about 4 because that's fundamental on my mind right now.

5 MR. HOELKE: Well, there's some more 6 fundamental --

7 THE COURT: Well, I understand but -- 8 MR. HOELKE: Okay.

9 THE COURT: -- I can -- I can sort through 10 those.

11 I want to sort through this one because 12 he's saying -- and I agree -- it's not something to be

13 considered on the merits itself; but, frankly, I'm

14 thinking ahead to the jury trial and the charges and the 15 issues that go to them. And, so, I'm thinking I would 16 feel more comfortable if I had that deposition so I

17 could do it.

18 He's saying basically, well, if I take the 19 deposition and it doesn't reach the merits, you can 20 strike the designation at that point in time. Now, I'm

21 concerned about that and the timing of all this.

22 MR. HOELKE: And I'm also concerned, 23 Your Honor, with that. With all due respect to my

24 esteemed adversary here and his client, they've 25 misrepresented themselves to everybody -- this Court, to

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1 the Texas Department of Licensing, to the City of 2 Baytown, to the Secretary of State.

3 THE COURT: Well, what does that have to 4 do with this issue?

5 MR. HOELKE: Well, first and foremost, 6 their answer, they can't ask for affirmative relief in

7 any manner. We just came upon this right -- that's why 8 I filed this "further" thing -- because they were

9 operating -- they filed with the Texas Department of 10 Licensing a name that they were to operate under that

11 specific license as Wheeler Dan Wrecker Service, Inc. 12 Well, Wheeler Dan Wrecker Service, Inc., doesn't exist,

13 never has existed, and was a ploy on behalf of the

14 defendant to keep from being held accountable. 15 Secondly, under sworn oath, he has given 16 us that the corporate offices are located at 608 and 606

17 West Donovan. The Secretary of State has their office

18 at 605 West Tidwell, which is a metal fence in an alley. 19 THE COURT: Now, see, we're going over 20 stuff that I already know --

21 MR. HOELKE: Well --

22 THE COURT: -- that we went over before. 23 MR. HOELKE: -- but the point is --

24 THE COURT: But what does that have to do 25 with the designation?

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 MR. HOELKE: Well, what -- well, what -- 2 first and foremost, he's supposed to make this

3 designation within 60 days of filing his answer. He 4 missed it by four days. So, he can't bring it.

5 Secondly, he -- I would -- I would love to 6 take this guy's deposition, and I think it would be

7 prudent on the Court to defer a decision on this matter 8 until this man's deposition is taken. And at that time

9 I could put together the issues that have raised their 10 head in the recent name change that the defendant has

11 effected with the Texas Department of Licensing 12 regulation and then subsequently filed with the City of

13 Baytown.

14 What, in fact, has transpired, a complaint 15 was filed regarding this incident at the City of 16 Baytown. They found that it was a nonconsent tow. If

17 you have a nonconsent tow, under the 2308.404, you have

18 a -- you are mandated to take that to a vehicle storage 19 facility and notify law enforcement within two hours; 20 and none of this was done.

21 And this guy, when he says it's a

22 responsible third party, this wrecker driver wouldn't 23 unhook this truck until he got paid, knowing full well

24 that this Mr. King that purportedly hired him was not 25 Mr. Sammy Wood, who was this alleged person with the

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 felonious intent to take this truck. So, I mean, it's 2 really an issue --

3 THE COURT: So, your argument basically is 4 Wood is really not even relevant to this issue?

5 MR. HOELKE: He's not relevant to this 6 issue. These guys right here have the statutory scheme

7 that they violated. They did so intentionally. And 8 there's a case on this with regard to the Uniform

9 Commercial Code where somebody tried to put this whole 10 scheme of trying to avoid the liability, and it's

11 obfuscating the issues to the finder of fact. And the 12 Supreme Court said, "No, we're not going to do that.

13 You're not going to emasculate the statute as a matter

14 of public policy by placing this third party a 15 responsible third party." 16 Their pleadings and our pleadings -- the

17 only thing that we have is unknown persons. We have two

18 unknown persons as per the sworn affidavit, the probable 19 cause affidavit that was issued in this matter in the 20 prosecution of Mr. Wood. And there's no question about

21 this, that these folks, that Mr. Hembree and the Wheeler

22 Dan Wrecker Service, which is not even a licensed entity 23 at the time, waited until they could get paid before

24 they would unhook this truck. 25 What is not even at issue is that an

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1 unlicensed entity not registered in the State of Texas 2 pulled this vehicle and took it to a chop shop. I mean,

3 that -- what is going on here, Your Honor, in common 4 sense, one, is Mr. Wood is not relevant; two, if you

5 bring him in, it's going to make something very complex. 6 People are going to be pulling at heartstrings. This is

7 not what the statutory scheme looked at and embraced. 8 It is very clear in the TDLR and the

9 Occupations Code who is liable, and they have -- it is 10 not a position where you can place -- it states on its

11 face negligence has nothing to do with your liability 12 under this statutory scheme. You either obey the rules

13 or don't play. They chose intentionally to make a quick

14 dollar. 15 And I think it goes a little bit deeper 16 than that. I don't know -- and I haven't -- it hasn't

17 passed the smell test because my client gets approached

18 at an eating-and-drinking establishment in Baytown and 19 has been told to tell his father to drop his case by an 20 unrelated third party but a third party where Dan

21 Wheeler stores their vehicles.

22 So, you know, I think what you're looking 23 at here is a not-so-subtle attempt to eviscerate the

24 statute that was put in place to protect the public and 25 as a matter of public policy, this Court should deny

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1 this summarily, but if it chooses not to take it under 2 consideration, I would ask that we have that time to

3 take the deposition of the -- Mr. -- what's his name? 4 MR. SCHMELLA: Wood.

5 MR. HOELKE: -- Wood, Sammy Wood. 6 MR. SCHMELLA: I apologize for not

7 standing, Your Honor. 8 MR. HOELKE: Sammy Wood.

9 So, yes, that's what I would like, 10 Your Honor. That's our position.

11 MR. SCHMELLA: Brief response, Your Honor? 12 THE COURT: Yes. Well, answer this

13 question. Talk about the relevancy. Okay? Based on

14 what he just said -- and, you know, I can see how he's 15 carving here; but tell me why you think it's relevant at 16 this time.

17 MR. SCHMELLA: Sure. I think that with

18 respect to -- the issue is whether, you know, my 19 client -- and they're now saying "intentionally" -- 20 essentially improperly towed the vehicle and all that

21 sort of stuff. The facts, I think, that will come

22 out -- again, we're not at the merit stage. I'm just 23 talking about pleadings. But based on what I believe

24 the facts will show is that Mr. Wood lied to Mr. Hembree 25 regarding his ownership interest in the vehicle; and

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1 based on Mr. Wood's lies, Mr. Hembree towed the tractor 2 and the trailer.

3 And, again, the statutory scheme, 4 Your Honor, is very broad in terms of it caused or

5 contributed to the harm in any way. And whether -- you 6 know, whether it's 10 percent, 50 percent, whatever,

7 that's a province for the jury. 8 And, furthermore, I just want to -- again,

9 Mr. Hoelke has thrown up a lot of mud against the wall 10 trying to see what's going to stick; but the fundamental

11 inquiry at this stage is whether we have pleaded 12 sufficient facts to provide fair notice of why Mr. Wood

13 should be designated. Even if Your Honor respectfully

14 disagrees with me and doesn't grant me leave today, 15 Your Honor has to, under statute, grant me a leave to 16 replead. You can't merely deny it, I don't believe,

17 under Chapter 33.

18 And, so, again, we provided fair notice. 19 It's a fair notice bar similar to Rule 47. It's a very 20 low bar, quite honestly. We've provided Mr. Watkins and

21 Mr. Hoelke sufficient information of the basic facts

22 that we're trying to develop vis-à-vis Mr. Wood; and for 23 that reason, I believe the Court doesn't have much of a

24 choice but to grant us leave to designate Mr. Wood as a 25 responsible third party.

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 MR. HOELKE: May I, Your Honor? 2 THE COURT: Well, I don't think you have

3 to. I think I've got a grip of what's going on. 4 MR. HOELKE: Okay.

5 THE COURT: I'm not going to grant the 6 leave at this time. I'm not going to deny it at this

7 time either. I think there needs to be some -- for 8 me -- and I know what you were saying, that I'm looking

9 at the merits; but I truly am looking at the merits on 10 this issue, relevancy. Okay? And, so, that's where I'm

11 looking at the merits about whatever the testimony might 12 or might not be.

13 But I exactly -- I think I understand

14 exactly what you're trying to put before this jury and 15 perhaps put a high-enough percentage on Mr. Wood's 16 conduct to escape any liability to Mr. Watkins. I don't

17 really know what all the facts are. I understand what

18 Mr. Hoelke is alleging. I don't know if he'll be able 19 to prove any of that or not. 20 So, when we get to these issues and you're

21 arguing these things, I'm trying to not waste y'all's

22 money and time by -- if I designate it, then you would 23 surely have to take his deposition; but then if you

24 chose not to, that might be a very good trial strategy 25 because he is someone not under any control of anybody

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1 because he's not a party to the issue. He is also, 2 obviously, a convicted criminal and probably knows how

3 to manipulate the system somewhat with regard to his 4 activities if they are consistent with theft throughout

5 his -- and I don't know what his conduct is. 6 So, it's real easy to point a finger at

7 the empty chair, as you say, and say, "Look, this is a 8 guy responsible for everything; and he's not here. And

9 you know what? We can't get you anything here because 10 he refuses to talk to us, okay, for whatever reason."

11 So, I'm not -- I'm not convinced that you 12 don't get to do that, on the one hand, purely by the way

13 you're arguing it in the statute; but on the other hand,

14 I think in trying to, which is my job, guide this trial 15 in a way that justice is ultimately achieved for all 16 parties, I'm not going to grant it at this time.

17 Now, my recommendation is -- because I

18 think that Mr. Watkins could, through Mr. Hoelke, try 19 this lawsuit; and if what he is arguing is true, the 20 name Wood would only come up as the person that had

21 possession for a short while. And then we look at the

22 other violations that he's alleging. 23 MR. HOELKE: And we --

24 THE COURT: So -- well, hold on. 25 MR. HOELKE: Yes, Your Honor.

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1 THE COURT: So, with that, I think you 2 understand what I'm saying.

3 MR. SCHMELLA: Well, but I -- I want a -- 4 I want a specific clarification for the record,

5 Your Honor. 6 THE COURT: Okay.

7 MR. SCHMELLA: You're refusing to grant my 8 Motion to Designate Sammy Wood as a Responsible Third

9 Party at this time; correct? 10 THE COURT: At this time.

11 MR. SCHMELLA: Okay. And I'm trying to 12 figure out what do I need to do to have you grant it? I

13 realize it's kind of asking you for an advisory opinion,

14 but are you -- 15 THE COURT: Well -- 16 MR. SCHMELLA: -- requiring a deposition

17 and other evidence to support it?

18 THE COURT: I -- I'm not requiring 19 anything. It's y'all lawsuit. 20 MR. SCHMELLA: Well, in order to grant my

21 designation, Judge.

22 THE COURT: But I am -- I am saying that I 23 would reconsider if I had evidence of the relevancy of

24 Mr. Wood. 25 MR. SCHMELLA: Okay. So, you're refusing

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1 to grant it until you have evidence which you believe 2 establishes relevance?

3 THE COURT: Which it flies right in the 4 face of your statement that I'm not to consider the

5 merits. 6 MR. SCHMELLA: Well, and --

7 THE COURT: But I -- 8 MR. SCHMELLA: -- and as long as you know

9 that, Judge. 10 THE COURT: I will --

11 MR. SCHMELLA: I just want to make sure 12 we're clear.

13 THE COURT: I will tell you that I am

14 considering the merits because to designate a third 15 party, I don't -- I don't see how you could do that 16 without considering whether that's relevant. I mean,

17 anybody could pull up an empty chair and say they're the

18 culprit and then the jury just -- one, I think it's a 19 confusing issue to the jury unless we designate exactly 20 who they are and they have some say in the proceedings.

21 MR. SCHMELLA: Well, and, Judge, I

22 respectfully disagree with you. 23 THE COURT: I understand.

24 MR. SCHMELLA: And I would just say that, 25 Your Honor, I used to do occupational health,

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1 asbestos/silicosis-type work. And I'll tell you, the 2 responsible third-party statute -- you know, it's one

3 thing whether it's a -- well, the legislature has made 4 the policy choice. For example, employees of a

5 particular, let's say, sandblasting outfit and that sort 6 of thing, obviously through the Workers' Comp bar, you

7 know, you couldn't name the employer on the charge 15 8 years ago, right, as a responsible party. The statute

9 allows it now. And I think it's analogous, and I -- 10 THE COURT: Well, I don't know if you can

11 designate a criminal who has been proven to 12 intentionally do something. I don't know if you can

13 designate them as the third party in a situation. I

14 mean, what if we're dealing with a pawn shop? What if 15 we're dealing with that? There are duties that the pawn 16 shop has. There are duties that your client must have,

17 at least according to Mr. Hoelke.

18 And, again, you've got to understand all I 19 know is a vehicle was towed and apparently chopped up. 20 That's all I know about the facts.

21 MR. HOELKE: Well, one thing we know,

22 Your Honor -- 23 THE COURT: Well, hold on, Mr. Hoelke.

24 MR. HOELKE: Okay. 25 THE COURT: I can't decide any of those

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1 issues, but I'm trying to piece together why the 2 criminal who has been convicted of an intentional and

3 knowing crime, because it's not reckless theft or 4 negligent theft -- it's going to be intentional and

5 knowing theft -- how that person could in any way take 6 away the culpability for the pawn dealer, so to speak,

7 of taking the gun and melting it down, or the gold bar 8 or the jewelry. So, that's how I'm analyzing it in my

9 mind. So, what does that have to do with the wrecker 10 service?

11 MR. SCHMELLA: Well -- 12 THE COURT: What remains to be seen,

13 though, and what is dangerous to both of you, as I see

14 it, is if you take his deposition and he says, "I was 15 hired by your guy" or "I was hired by his guy" or, you 16 know, whatever. See? At that point in time, not only

17 would he be designated -- he should be joined into the

18 lawsuit at some point in time or y'all need to regroup 19 and figure out what this lawsuit is about. 20 MR. SCHMELLA: Fair enough. And I don't

21 think that's going to be an issue, candidly.

22 And, Your Honor, again, I -- with respect 23 to the issue you're talking about, I'd refer you to

24 the -- I forget the -- the Duenez case, D-U-E-N-E-Z. 25 You know, that's one where -- it's a dram shop case, and

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 they're talking about the culpability of the dram shop. 2 The Supreme Court has made it crystal clear that in a

3 dram shop case, you can designate the drunk driver who 4 is allegedly over-served as a responsible third party,

5 period. And, so -- 6 THE COURT: Well, I can -- I can --

7 MR. SCHMELLA: -- what you're talking 8 about, I mean, again, the legislature has made the

9 policy choice. 10 THE COURT: Well --

11 MR. SCHMELLA: But I -- I've said my 12 piece. I don't need to argue with you.

13 THE COURT: Well, I'm not arguing with

14 you. It's a discussion that we're having. 15 Dram shop is not involving an intentional 16 crime. It's involving an intoxication. It's an

17 unintentional crime. It's a little bit different. So,

18 I can separate that in my mind. I cannot imagine that 19 theft is not intentional. 20 MR. SCHMELLA: Well -- and no. Theft is

21 an intentional act. I guess in a lot of ways, though,

22 doesn't an intentional crime by the alleged third party 23 show a greater culpability on his or her part?

24 THE COURT: Yeah. That's -- 25 MR. SCHMELLA: To me, that screams more of

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 an opportunity to designate the person. 2 THE COURT: And that's exactly why I'm not

3 granting it right now, because you can make it look like 4 they're 100 percent responsible. They're not here.

5 He's not able to deal with it. And, so, I don't think 6 that would get justice.

7 Now, if we hear from them and we know what 8 kind of range we're talking about -- but, I mean, I --

9 you know, I'd love to sit over there in your seat and 10 point to that chair and say, "He stole it. We don't

11 know nothing about it. He lied to us. We chopped it 12 up." That's not what they're actually alleging.

13 MR. SCHMELLA: Legislature --

14 THE COURT: I think -- 15 MR. SCHMELLA: -- allows us to do that, 16 Judge.

17 THE COURT: I think that would be

18 confusing. 19 Well, they may; but the legislature is not 20 sitting up here.

21 MR. HOELKE: And, Your Honor, I might

22 point out that their own evidence, which is the probable 23 cause affidavit, Paragraph Nos. 1, 2, 3, 4, where

24 there's no -- there's no mention in there that they were 25 deceived. It solely states he was -- (Reading):

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 Hembree advised due to the tow call being relayed by 2 Graham. He assumed that the proof of ownership was

3 already shown. Hembree advised he towed the 4 truck-trailer without seeing any proof of ownership

5 paperwork. 6 I mean, direct violation of the statute

7 that controls this action. 8 THE COURT: Well, that's -- that's

9 whatever your lawsuit is going to be. I haven't 10 dwelled --

11 MR. HOELKE: Yeah. And -- 12 THE COURT: -- if that's the word -- I

13 haven't gone into the lawsuit to the degree -- I'm just

14 sitting here saying that at this time, I don't feel 15 comfortable with regard to the relevancy. It could be 16 100-percent relevant, and it could not be relevant at

17 all based on that argument.

18 MR. HOELKE: Yeah. 19 THE COURT: But it might be -- he might be 20 part of an organized crime gang that does this and

21 deceives every wrecker yard in the entire -- you know,

22 then we -- then it becomes much more relevant to me and, 23 perhaps, needs to be designated. So, I'm not denying;

24 but I'm not granting at this time. 25 If you want to raise the issue a little

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 later, I will go back and look at the law again and 2 consider all of your arguments and --

3 MR. SCHMELLA: And I -- 4 THE COURT: I've changed my mind before.

5 MR. SCHMELLA: And I apologize, 6 Your Honor. I didn't mean to cut you off. I just want

7 to make one statement clear for the record. Mr. Hoelke 8 indicated that we didn't file the Motion for Leave to

9 Designate a Responsible Third Party until after -- he 10 claims that our deadline was within 60 days of answering

11 the lawsuit. That's if the defendant -- the alleged 12 third party, rather -- is an unknown criminal John Doe.

13 Because Mr. Wood is very much known, the

14 60-day after lawsuit deadline doesn't apply. The 15 minimum is 60 days before the trial setting. We've 16 clearly met that. We have no trial setting.

17 THE COURT: Well, I was about to say, we

18 don't have a trial setting yet, do we? 19 MR. HOELKE: But we'd sure like one. 20 THE COURT: You'd sure like one?

21 MR. HOELKE: Yes, sir.

22 MR. SCHMELLA: As would the defendant. 23 THE COURT: Well, we'll get a trial

24 schedule together. 25 MR. SCHMELLA: Should we talk with your

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 coordinator, Judge? 2 THE COURT: Well, that would be nice; but

3 I think you'll find her in Florida. 4 MR. SCHMELLA: Good for her.

5 THE COURT: Yeah. Why don't y'all -- I 6 mean, obviously, this is fairly contentious; and there's

7 some legal issues going on here. I want to get y'all in 8 the best position presenting the true facts to the jury

9 so they can make a decision. I think that's kind of my 10 job, without trying your lawsuit. I don't want to try

11 it either. But let's -- why don't y'all work on a 12 schedule; and let's see if we can get this going because

13 that may make it more meaningful to consider this,

14 frankly, if I know there's a trial looming. 15 MR. SCHMELLA: And Mr. Hoelke and I talked 16 before the hearing. We both agree that we want it set.

17 And I think we may have a little bit of a difference in

18 terms of when that might be in terms of whether it's the 19 end of the year or the beginning part of next year. 20 But, no, we -- I think all parties --

21 THE COURT: I actually don't think we can

22 get you this year. 23 MR. HOELKE: Okay. Well, we -- that's

24 better because he's getting ready to have an 25 introduction of a couple of family members into his

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 family. 2 MR. SCHMELLA: My wife's expecting twins,

3 Your Honor. 4 THE COURT: Oh, well, congratulations.

5 MR. HOELKE: He's going to be pretty busy 6 for the rest of the fall.

7 THE COURT: You ought to get familiar with 8 this third-party thing, then.

9 MR. SCHMELLA: Chapter and verse, 10 Your Honor.

11 THE COURT: It's a great thing. 12 MR. SCHMELLA: Thank you.

13 And just one further question: With

14 respect to getting a trial schedule, you mentioned your 15 coordinator is away on vacation. When -- does 16 Your Honor know when she's going to be back?

17 THE COURT: She better be back Tuesday.

18 MR. SCHMELLA: Okay. Fair enough. 19 Well, Mr. Hoelke and I will work together with her -- 20 MR. HOELKE: We'll call her.

21 MR. SCHMELLA: -- and we'll work on a

22 date. 23 THE COURT: Well, y'all work on something

24 and you submit it and then I'll oversee it with her, 25 obviously. But, you know, give yourself plenty of time

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 for the experts. Give yourself plenty of time for me to 2 figure out whether I want to designate Mr. Wood --

3 Woods -- whatever his name is -- as a third party, but 4 I'm just not comfortable with doing it right now based

5 on these things. I'm going to have to look at the 6 pleadings a little bit more, and I'm going to have to

7 look at -- and I will consider your arguments. That's 8 why I'm not denying it at this time.

9 We can go off the record. 10 (PROCEEDINGS CONCLUDED) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

1 REPORTER'S CERTIFICATE 2 THE STATE OF TEXAS) COUNTY OF CHAMBERS) 3 I, TERI DAIGLE, Official Certified Shorthand 4 Reporter in and for the State of Texas, do hereby

5 certify that the above and foregoing contains a true and 6 correct transcription of all portions of evidence and

7 other proceedings requested in writing by counsel for 8 the parties to be included in this volume of the

9 Reporter's Record, in the above-styled and numbered 10 cause, all of which occurred in open court or in

11 chambers and were reported by me. 12 I further certify that this Reporter's Record

13 of the proceedings truly and correctly reflects the

14 exhibits, if any, admitted by the respective parties. 15 I further certify that the total cost for the 16 preparation of this Reporter's Record is $ 181.50 and

17 was paid by McCormick, Lanza & McNeel, L.L.P.

18 WITNESS MY OFFICIAL HAND this the 8th day of 19 October, 2014. 20 21 /s/ Teri Daigle

22 TERI DAIGLE, CSR, RPR, CRR Texas CSR #4441 23 Expiration Date: 12/31/15 Official Court Reporter 24 344th District Court Chambers County, Texas 25 Anahuac, Texas 77514

TERI DAIGLE, CSR, RPR, CRR OFFICIAL COURT REPORTER - 344TH DISTRICT COURT

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12/23/2014 CIVIL PRACTICE AND REMEDIES CODE CHAPTER 33. PROPORTIONATE RESPONSIBILITY

CIVIL PRACTICE AND REMEDIES CODE

TITLE 2. TRIAL, JUDGMENT, AND APPEAL

SUBTITLE C. JUDGMENTS

CHAPTER 33. PROPORTIONATE RESPONSIBILITY

SUBCHAPTER A. PROPORTIONATE RESPONSIBILITY

Sec. 33.001. PROPORTIONATE RESPONSIBILITY. In an action to which this chapter applies, a claimant may not recover damages if his percentage of responsibility is greater than 50 percent.

Acts 1985, 69th Leg., ch. 959, Sec. 1, eff. Sept. 1, 1985. Amended by Acts 1987, 70th Leg., 1st C.S., ch. 2, Sec. 2.04, eff. Sept. 2, 1987; Acts 1995, 74th Leg., ch. 136, Sec. 1, eff. Sept. 1, 1995.

Sec. 33.002. APPLICABILITY. (a) This chapter applies to: (1) any cause of action based on tort in which a defendant, settling person, or responsible third party is found responsible for a percentage of the harm for which relief is sought; or (2) any action brought under the Deceptive Trade Practices­ Consumer Protection Act (Subchapter E, Chapter 17, Business & Commerce Code) in which a defendant, settling person, or responsible third party is found responsible for a percentage of the harm for which relief is sought. (b) Repealed by Acts 2003, 78th Leg., ch. 204, Sec. 4.10(1). (c) This chapter does not apply to: (1) an action to collect workers' compensation benefits under the workers' compensation laws of this state (Subtitle A, Title 5, Labor Code) or actions against an employer for exemplary damages arising out of the death of an employee; (2) a claim for exemplary damages included in an action to which this chapter otherwise applies; or (3) a cause of action for damages arising from the manufacture of methamphetamine as described by Chapter 99. (d) to (h) Repealed by Acts 2003, 78th Leg., ch. 204, Sec. http://www.statutes.legis.state.tx.us/Docs/CP/htm/CP.33.htm#33.002 1/10

12/23/2014 CIVIL PRACTICE AND REMEDIES CODE CHAPTER 33. PROPORTIONATE RESPONSIBILITY 4.10(1).

Added by Acts 1987, 70th Leg., 1st C.S., ch. 2, Sec. 2.05, eff. Sept. 2, 1987. Amended by Acts 1989, 71st Leg., ch. 380, Sec. 4, eff. Sept. 1, 1989; Acts 1995, 74th Leg., ch. 136, Sec. 1, eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 414, Sec. 17, eff. Sept. 1, 1995; Acts 2001, 77th Leg., ch. 643, Sec. 2, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 204, Sec. 4.01, 4.10(1), eff. Sept. 1, 2003.

Sec. 33.003. DETERMINATION OF PERCENTAGE OF RESPONSIBILITY. (a) The trier of fact, as to each cause of action asserted, shall determine the percentage of responsibility, stated in whole numbers, for the following persons with respect to each person's causing or contributing to cause in any way the harm for which recovery of damages is sought, whether by negligent act or omission, by any defective or unreasonably dangerous product, by other conduct or activity that violates an applicable legal standard, or by any combination of these: (1) each claimant; (2) each defendant; (3) each settling person; and (4) each responsible third party who has been designated under Section 33.004. (b) This section does not allow a submission to the jury of a question regarding conduct by any person without sufficient evidence to support the submission.

Added by Acts 1987, 70th Leg., 1st C.S., ch. 2, Sec. 2.06, eff. Sept. 2, 1987. Amended by Acts 1995, 74th Leg., ch. 136, Sec. 1, eff. Sept. 1, 1995; Acts 2003, 78th Leg., ch. 204, Sec. 4.02, eff. Sept. 1, 2003.

Sec. 33.004. DESIGNATION OF RESPONSIBLE THIRD PARTY. (a) A defendant may seek to designate a person as a responsible third party by filing a motion for leave to designate that person as a responsible third party. The motion must be filed on or before the 60th day before the trial date unless the court finds good cause to allow the motion to be filed at a later date. http://www.statutes.legis.state.tx.us/Docs/CP/htm/CP.33.htm#33.002 2/10

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12/23/2014 CIVIL PRACTICE AND REMEDIES CODE CHAPTER 33. PROPORTIONATE RESPONSIBILITY 4.10(1).

Added by Acts 1987, 70th Leg., 1st C.S., ch. 2, Sec. 2.05, eff. Sept. 2, 1987. Amended by Acts 1989, 71st Leg., ch. 380, Sec. 4, eff. Sept. 1, 1989; Acts 1995, 74th Leg., ch. 136, Sec. 1, eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 414, Sec. 17, eff. Sept. 1, 1995; Acts 2001, 77th Leg., ch. 643, Sec. 2, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 204, Sec. 4.01, 4.10(1), eff. Sept. 1, 2003.

Sec. 33.003. DETERMINATION OF PERCENTAGE OF RESPONSIBILITY. (a) The trier of fact, as to each cause of action asserted, shall determine the percentage of responsibility, stated in whole numbers, for the following persons with respect to each person's causing or contributing to cause in any way the harm for which recovery of damages is sought, whether by negligent act or omission, by any defective or unreasonably dangerous product, by other conduct or activity that violates an applicable legal standard, or by any combination of these: (1) each claimant; (2) each defendant; (3) each settling person; and (4) each responsible third party who has been designated under Section 33.004. (b) This section does not allow a submission to the jury of a question regarding conduct by any person without sufficient evidence to support the submission.

Added by Acts 1987, 70th Leg., 1st C.S., ch. 2, Sec. 2.06, eff. Sept. 2, 1987. Amended by Acts 1995, 74th Leg., ch. 136, Sec. 1, eff. Sept. 1, 1995; Acts 2003, 78th Leg., ch. 204, Sec. 4.02, eff. Sept. 1, 2003.

Sec. 33.004. DESIGNATION OF RESPONSIBLE THIRD PARTY. (a) A defendant may seek to designate a person as a responsible third party by filing a motion for leave to designate that person as a responsible third party. The motion must be filed on or before the 60th day before the trial date unless the court finds good cause to allow the motion to be filed at a later date. http://www.statutes.legis.state.tx.us/Docs/CP/htm/CP.33.htm#33.004 2/10

12/23/2014 CIVIL PRACTICE AND REMEDIES CODE CHAPTER 33. PROPORTIONATE RESPONSIBILITY

(b) Nothing in this section affects the third­party practice as previously recognized in the rules and statutes of this state with regard to the assertion by a defendant of rights to contribution or indemnity. Nothing in this section affects the filing of cross­claims or counterclaims. (c) Repealed by Acts 2003, 78th Leg., ch. 204, Sec. 4.10(2). (d) A defendant may not designate a person as a responsible third party with respect to a claimant's cause of action after the applicable limitations period on the cause of action has expired with respect to the responsible third party if the defendant has failed to comply with its obligations, if any, to timely disclose that the person may be designated as a responsible third party under the Texas Rules of Civil Procedure. (e) Repealed by Acts 2011, 82nd Leg., R.S., Ch. 203, Sec. 5.02, eff. September 1, 2011. (f) A court shall grant leave to designate the named person as a responsible third party unless another party files an objection to the motion for leave on or before the 15th day after the date the motion is served. (g) If an objection to the motion for leave is timely filed, the court shall grant leave to designate the person as a responsible third party unless the objecting party establishes: (1) the defendant did not plead sufficient facts concerning the alleged responsibility of the person to satisfy the pleading requirement of the Texas Rules of Civil Procedure; and (2) after having been granted leave to replead, the defendant failed to plead sufficient facts concerning the alleged responsibility of the person to satisfy the pleading requirements of the Texas Rules of Civil Procedure. (h) By granting a motion for leave to designate a person as a responsible third party, the person named in the motion is designated as a responsible third party for purposes of this chapter without further action by the court or any party. (i) The filing or granting of a motion for leave to designate a person as a responsible third party or a finding of fault against the person: (1) does not by itself impose liability on the person; and (2) may not be used in any other proceeding, on the basis of http://www.statutes.legis.state.tx.us/Docs/CP/htm/CP.33.htm#33.004 3/10

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res judicata, collateral estoppel, or any other legal theory, to impose liability on the person. (j) Notwithstanding any other provision of this section, if, not later than 60 days after the filing of the defendant's original answer, the defendant alleges in an answer filed with the court that an unknown person committed a criminal act that was a cause of the loss or injury that is the subject of the lawsuit, the court shall grant a motion for leave to designate the unknown person as a responsible third party if: (1) the court determines that the defendant has pleaded facts sufficient for the court to determine that there is a reasonable probability that the act of the unknown person was criminal; (2) the defendant has stated in the answer all identifying characteristics of the unknown person, known at the time of the answer; and (3) the allegation satisfies the pleading requirements of the Texas Rules of Civil Procedure. (k) An unknown person designated as a responsible third party under Subsection (j) is denominated as "Jane Doe" or "John Doe" until the person's identity is known. (l) After adequate time for discovery, a party may move to strike the designation of a responsible third party on the ground that there is no evidence that the designated person is responsible for any portion of the claimant's alleged injury or damage. The court shall grant the motion to strike unless a defendant produces sufficient evidence to raise a genuine issue of fact regarding the designated person's responsibility for the claimant's injury or damage.

Added by Acts 1995, 74th Leg., ch. 136, Sec. 1, eff. Sept. 1, 1995. Amended by Acts 2003, 78th Leg., ch. 204, Sec. 4.03, 4.04, 4.10(2), eff. Sept. 1, 2003. Amended by: Acts 2011, 82nd Leg., R.S., Ch. 203 (H.B. 274), Sec. 5.01, eff. September 1, 2011. Acts 2011, 82nd Leg., R.S., Ch. 203 (H.B. 274), Sec. 5.02, eff. September 1, 2011.

SUBCHAPTER B. CONTRIBUTION http://www.statutes.legis.state.tx.us/Docs/CP/htm/CP.33.htm#33.004 4/10

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Sec. 33.011. DEFINITIONS. In this chapter: (1) "Claimant" means a person seeking recovery of damages, including a plaintiff, counterclaimant, cross­claimant, or third­party plaintiff. In an action in which a party seeks recovery of damages for injury to another person, damage to the property of another person, death of another person, or other harm to another person, "claimant" includes: (A) the person who was injured, was harmed, or died or whose property was damaged; and (B) any person who is seeking, has sought, or could seek recovery of damages for the injury, harm, or death of that person or for the damage to the property of that person. (2) "Defendant" includes any person from whom, at the time of the submission of the case to the trier of fact, a claimant seeks recovery of damages. (3) "Liable defendant" means a defendant against whom a judgment can be entered for at least a portion of the damages awarded to the claimant. (4) "Percentage of responsibility" means that percentage, stated in whole numbers, attributed by the trier of fact to each claimant, each defendant, each settling person, or each responsible third party with respect to causing or contributing to cause in any way, whether by negligent act or omission, by any defective or unreasonably dangerous product, by other conduct or activity violative of the applicable legal standard, or by any combination of the foregoing, the personal injury, property damage, death, or other harm for which recovery of damages is sought. (5) "Settling person" means a person who has, at any time, paid or promised to pay money or anything of monetary value to a claimant in consideration of potential liability with respect to the personal injury, property damage, death, or other harm for which recovery of damages is sought. (6) "Responsible third party" means any person who is alleged to have caused or contributed to causing in any way the harm for which recovery of damages is sought, whether by negligent act or omission, by any defective or unreasonably dangerous product, by other conduct or activity that violates an applicable legal standard, or by

http://www.statutes.legis.state.tx.us/Docs/CP/htm/CP.33.htm#33.011 5/10 12/23/2014 CIVIL PRACTICE AND REMEDIES CODE CHAPTER 33. PROPORTIONATE RESPONSIBILITY

any combination of these. The term "responsible third party" does not include a seller eligible for indemnity under Section 82.002. (7) Repealed by Acts 2003, 78th Leg., ch. 204, Sec. 4.10(3).

Acts 1985, 69th Leg., ch. 959, Sec. 1, eff. Sept. 1, 1985. Amended by Acts 1987, 70th Leg., 1st C.S., ch. 2, Sec. 2.07, eff. Sept. 2, 1987; Acts 1995, 74th Leg., ch. 136, Sec. 1, eff. Sept. 1, 1995; Acts 2003, 78th Leg., ch. 204, Sec. 4.05, 4.10(3), eff. Sept. 1, 2003.

Sec. 33.012. AMOUNT OF RECOVERY. (a) If the claimant is not barred from recovery under Section 33.001, the court shall reduce the amount of damages to be recovered by the claimant with respect to a cause of action by a percentage equal to the claimant's percentage of responsibility. (b) If the claimant has settled with one or more persons, the court shall further reduce the amount of damages to be recovered by the claimant with respect to a cause of action by the sum of the dollar amounts of all settlements. (c) Notwithstanding Subsection (b), if the claimant in a health care liability claim filed under Chapter 74 has settled with one or more persons, the court shall further reduce the amount of damages to be recovered by the claimant with respect to a cause of action by an amount equal to one of the following, as elected by the defendant: (1) the sum of the dollar amounts of all settlements; or (2) a percentage equal to each settling person's percentage of responsibility as found by the trier of fact. (d) An election made under Subsection (c) shall be made by any defendant filing a written election before the issues of the action are submitted to the trier of fact and when made, shall be binding on all defendants. If no defendant makes this election or if conflicting elections are made, all defendants are considered to have elected Subsection (c)(1). (e) This section shall not apply to benefits paid by or on behalf of an employer to an employee pursuant to workers' compensation insurance coverage, as defined in Section 401.011(44), Labor Code, in effect at the time of the act, event, or occurrence made the basis of claimant's suit.

http://www.statutes.legis.state.tx.us/Docs/CP/htm/CP.33.htm#33.011 6/10

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Opinion filed July 10, 2014

In The

Eleventh Court of Appeals __________

No. 11-14-00137-CV __________

IN RE LEWIS CASING CREWS, INC.

Original Mandamus Proceeding

MEMORANDUM OPINION Relator, Lewis Casing Crews, Inc., filed this mandamus proceeding after the trial court issued an order denying its motion for designation of Diamond D Slickline Service Company, Inc. as a responsible third party pursuant to Section 33.004 of the Texas Civil Practice and Remedies Code. See TEX. CIV. PRAC. & REM. CODE ANN. § 33.004 (West Supp. 2013). We conditionally grant relief. This is a personal injury case brought by Real Party in Interest, David G. Tinnie, arising from an incident that occurred on a drilling rig. Tinnie was employed by Diamond D, and he allegedly was acting in the course and scope of his employment at the drilling rig when the incident occurred. Tinnie alleged that he was injured when a “winch line with an attached lifting hook” was dropped or

fell off the rig and struck him. Tinnie sued Lewis Casing; Viking Drilling, L.L.C.; BNB Consulting & Services, Inc.; Energen Resources Corporation; and Schlumberger Limited. Tinnie alleged negligence and gross negligence claims against the defendants, and he sought to recover damages in excess of $1,000,000. Lewis Casing filed a motion for designation of responsible third party in which it sought leave to designate Tinnie’s employer, Diamond D, as a responsible third party. Lewis Casing alleged that Diamond D’s negligence was the cause or a contributing cause of any alleged harm to Tinnie. Tinnie filed a timely objection to the motion for designation. He asserted that the trial court should deny the motion on the ground that Lewis Casing “ha[d] not pled sufficient facts concerning the alleged responsibility of [Diamond D] to satisfy the pleading requirements of the Texas Rules of Civil Procedure.” Lewis Casing filed a supplement to its motion for designation. The supplement included additional allegations related to Diamond D’s alleged responsibility for the accident. The trial court conducted a hearing on Lewis Casing’s motion. At the hearing, Tinnie’s counsel asserted that the motion to designate was “premature” because the case was in its early stage with a lack of discovery. After hearing the arguments from counsel, the trial court stated, “No, I think the motion is premature. Your motion is denied.” The trial court entered a written order denying the motion. The trial court did not grant Lewis Casing leave to replead. Lewis Casing filed a motion in which it requested the trial court to reconsider its ruling. Alternatively, Lewis Casing requested leave to replead. The trial court entered an order denying the motion to reconsider. Lewis Casing has filed a petition for writ of mandamus to challenge the trial court’s order denying Lewis Casing’s motion for designation of Diamond D as a responsible third party. In its sole issue, Lewis Casing contends that the trial court

clearly abused its discretion by denying the motion, and Lewis Casing also contends that it has no adequate remedy by appeal. To obtain mandamus relief, a relator must show both a clear abuse of discretion by the trial court and the lack of an adequate remedy by appeal. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex. 2004) (orig. proceeding). Walker v. Packer, 827 S.W.2d 833, 839–40 (Tex. 1992). A court abuses its discretion when it acts in an arbitrary or unreasonable manner without reference to any guiding rules or principles. In re NITLA S.A. de C.V., 92 S.W.3d 419, 422 (Tex. 2002) (orig. proceeding). Whether a remedy by appeal is adequate depends heavily on the circumstances presented. Prudential, 148 S.W.3d at 136– 37; In re Estate of Hutchins, 391 S.W.3d 578, 583 (Tex. App.—Dallas 2012, orig. proceeding). An appellate remedy is not inadequate merely because it may involve more cost or delay than obtaining mandamus relief. Walker, 827 S.W.2d at 842. Under the Texas proportionate responsibility statute, a responsible third party is “any person who is alleged to have caused or contributed to causing in any way the harm for which recovery of damages is sought, whether by negligent act or omission, by any defective or unreasonably dangerous product, by other conduct or activity that violates an applicable legal standard, or by any combination of these.” CIV. PRAC. & REM. § 33.011(6) (West 2008). The proportionate responsibility statute provides a framework for apportioning percentages of responsibility in the calculation of damages in any case in which more than one person, including the plaintiff, is alleged to have caused or contributed to cause the harm for which recovery of damages is sought. Id. § 33.003; Challenger Gaming Solutions, Inc. v. Earp, 402 S.W.3d 290, 292–93 (Tex. App.—Dallas 2013, no pet.). Section 33.004(a) of the Civil Practice and Remedies Code provides that “[a] defendant may seek to designate a person as a responsible third party by filing a motion for leave to designate that person as a responsible third party.” CIV.

PRAC. & REM. § 33.004(a). The defendant must file the motion at least sixty days before the trial date unless the court finds that good cause exists to allow the motion to be filed later. Id. A court must grant the motion unless another party files an objection within fifteen days after the date the motion is served. Id. § 33.004(f). Where, as in this case, an objection to the motion is timely filed, the court is required to grant leave to designate the party named in the motion as a third party, unless the objecting party establishes the following: “(1) the defendant did not plead sufficient facts concerning the alleged responsibility of the person to satisfy the pleading requirement of the Texas Rules of Civil Procedure; and (2) after having been granted leave to replead, the defendant failed to plead sufficient facts concerning the alleged responsibility of the person to satisfy the pleading requirements of the Texas Rules of Civil Procedure.” Id. § 33.004(g). In determining whether to grant a motion for leave to designate a responsible third party, a trial court is restricted to evaluating the sufficiency of the facts pleaded by the movant and is not permitted to engage in an analysis of the truth of the allegations or consider evidence on the third party’s ultimate liability. 1 In re Unitec Elevator Servs. Co., 178 S.W.3d 53, 62 (Tex. App.—Houston [1st Dist.] 2005, orig. proceeding). Lewis Casing contends that it pleaded sufficient facts concerning the alleged responsibility of Diamond D and that, therefore, the trial court clearly abused its discretion when it denied the motion. Tinnie contends that Lewis Casing’s

1 A party may challenge the sufficiency of the evidence to support the designation of a responsible third party after there has been adequate time for discovery in a case. CIV. PRAC. & REM. § 33.004(l). Specifically, “a party may move to strike the designation of a responsible third party on the ground that there is no evidence that the designated person is responsible for any portion of the claimant’s alleged injury or damage.” Id. The court is required to grant the motion to strike “unless a defendant produces sufficient evidence to raise a genuine issue of fact regarding the designated person’s responsibility for the claimant’s injury or damage.” Id.

allegations were insufficient to satisfy Section 33.004(g). Accordingly, Tinnie contends that the trial court did not abuse its discretion when it denied the motion. The issue before the trial court at the hearing on Lewis Casing’s motion for designation was whether Lewis Casing had pleaded “sufficient facts concerning the alleged responsibility of [Diamond D] to satisfy the pleading requirement of the Texas Rules of Civil Procedure.” CIV. PRAC. & REM. § 33.004(g)(1). Texas follows a “fair notice” standard for pleading. Low v. Henry, 221 S.W.3d 609, 612 (Tex. 2007). Rules 45 and 47 of the Texas Rules of Civil Procedure require that pleadings give fair notice of the claim asserted. Paramount Pipe & Supply Co. v. Muhr, 749 S.W.2d 491, 494 (Tex. 1988). The “fair notice” standard for pleading is satisfied if the opposing party can ascertain from the pleading the nature, the basic issues, and the type of evidence that might be relevant to the controversy. Low, 221 S.W.3d at 612. A petition is sufficient if a cause of action or defense may be reasonably inferred from what is specifically stated. McGraw v. Brown Realty Co., 195 S.W.3d 271, 275 (Tex. App.—Dallas 2006, no pet.). Tinnie alleged in his petition that each of the defendants committed acts and omissions that constituted negligence and gross negligence and that those acts and omissions were a proximate cause of the incident in question and the injuries and damages that he sustained and suffered. Lewis Casing alleged in its motion for designation that Diamond D failed to provide adequate safety training, equipment, and employee supervision and that Diamond D failed to create and maintain a safe work environment for Tinnie. Lewis Casing also alleged that “[Diamond D’s] negligence was the cause or contributing cause of any alleged harm to [Tinnie].” Lewis Casing alleged in its supplemental motion that Diamond D failed to exercise ordinary care and that Diamond D’s failure to exercise ordinary care was a proximate cause of the accident in question. Additionally, Lewis Casing alleged that, under the doctrine of respondeat superior, Diamond D was vicariously liable

for the negligent acts and omissions of its supervisors. Lewis Casing alleged that the supervisors and Tinnie were negligent in a number of respects, including that they failed to follow instructions that they had been given; that, contrary to instructions, they did not wait to begin their work until all work above them on the rig was concluded; that they failed to keep a proper lookout; that they failed to delay or stop their work until it could proceed safely; and that they failed to sufficiently communicate with other workers on site in an effort to ensure that Diamond D’s work could proceed in an orderly and safe sequence. Lewis Casing specifically alleged that Diamond D’s negligence caused or contributed to cause the harm for which Tinnie sought recovery of damages. We conclude that Lewis Casing’s allegations concerning the alleged responsibility of Diamond D are sufficient to satisfy the fair-notice pleading requirement; an opposing party can ascertain from the allegations the nature and basic issues of the controversy and what type of evidence might be relevant. The trial court apparently denied Lewis Casing’s motion to designate Diamond D as a responsible third party on the ground that the motion was “premature.” However, “pre- maturity” is not a proper ground to deny a motion to designate a responsible third party. Instead, a motion to designate a responsible third party may be denied only if a defendant fails to plead sufficient facts after the defendant has been granted leave to replead. CIV. PRAC. & REM. § 33.004(g). Because Lewis Casing’s allegations provided fair notice of its claim, we conclude that the trial court clearly abused its discretion when it denied Lewis Casing’s motion for designation of Diamond D as a responsible third party. We next address whether Lewis Casing has an adequate remedy by appeal. Texas intermediate appellate courts have reached different conclusions on the issue of whether there is an adequate remedy by appeal from a trial court’s erroneous denial of a motion for leave to designate a responsible third party. Several courts

have granted mandamus relief from a trial court’s erroneous ruling on an issue related to the designation of a responsible third party. See, e.g., In re Smith, 366 S.W.3d 282, 288–89 (Tex. App.—Dallas 2012, orig. proceeding); In re Brokers Logistics, Ltd., 320 S.W.3d 402, 408–09 (Tex. App.—El Paso 2010, orig. proceeding); In re Arthur Andersen LLP, 121 S.W.3d 471, 485–86 (Tex. App.— Houston [14th Dist.] 2003, orig. proceeding). Other courts have denied mandamus relief based on the conclusion that the relators failed to show the lack of an adequate remedy by appeal. See, e.g., Unitec Elevator, 178 S.W.3d at 63–66; In re Martin, 147 S.W.3d 453, 460 (Tex. App.—Beaumont 2004, orig. proceeding). Based on our analysis, and as discussed below, we agree with the sound reasoning of those courts that have concluded that there is no adequate remedy by appeal in such cases. See Brokers Logistics, 320 S.W.3d at 408–09; Andersen, 121 S.W.3d at 485–86. Tinnie argues that mandamus relief should be granted from a trial court’s erroneous denial of a motion to designate a responsible third party only in “rare, highly complex” cases that involve the type of “extraordinary circumstances” that were present in Andersen, which involved the “enormity of the facts surrounding the collapse” of Enron. Andersen, 121 S.W.3d at 486. Tinnie relies on Unitec Elevator to support his argument. In Unitec Elevator, the court characterized the case before it as a “relatively straightforward personal injury action.” Unitec Elevator, 178 S.W.3d at 65. Because the case did not present extraordinary circumstances such as those that were presented in Andersen, the Unitec Elevator court concluded that the relators had an adequate remedy by appeal. Id. at 65–66. Tinnie contends that, unlike Andersen, this case does not involve extraordinary circumstances because “[t]he case at bar is a straightforward negligence matter” and “is not an overly complex case.” Based on these contentions, Tinnie asserts that Lewis Casing has an adequate remedy by appeal.

We disagree with Tinnie’s assertion that mandamus relief should be limited to those cases that involve circumstances similar to those involved in Andersen. Courts have not limited grants of mandamus relief to such cases. Smith, 366 S.W.3d at 288–89; Brokers Logistics, 320 S.W.3d at 408–09. Additionally, although Tinnie contends that this case is a straightforward negligence matter, the record shows that he has sued five sophisticated business defendants, and he seeks to recover in excess of $1,000,000 in damages. The case will involve extensive discovery; the liability and damages issues likely will be hotly contested; a trial would be lengthy; and if the case goes to trial, the trier of fact will be asked to apportion liability, if any, among the parties. The adequacy of an appellate remedy must be determined by balancing the benefits of mandamus review against the detriments. In re Team Rocket, L.P., 256 S.W.3d 257, 262 (Tex. 2008) (orig. proceeding). In evaluating benefits and detriments, we consider whether mandamus review will preserve important substantive and procedural rights from impairment or loss. Id. Under the proportionate responsibility statute, Lewis Casing has the right to have one jury apportion liability among all responsible parties. See CIV. PRAC. & REM. § 33.003(a); Brokers Logistics, 320 S.W.3d at 408; Andersen, 121 S.W.3d at 485– 86. A grant of mandamus relief would preserve Lewis Casing’s valuable right to have the trier of fact determine Diamond D’s percentage of responsibility for Tinnie’s injuries and damages. Brokers Logistics, 320 S.W.3d at 408. This case is distinguishable from Martin, in which the Beaumont Court held that an adequate appellate remedy existed. See Martin, 147 S.W.3d at 459–60. In that case, the court noted that, based on the facts before it, “a separate post- judgment lawsuit for contribution is an available remedy.” Id. at 459. Here, Lewis Casing does not have the ability to seek contribution from Tinnie’s employer, Diamond D, because Diamond D has provided Tinnie with workers’ compensation

benefits. 2 TEX. LAB. CODE ANN. § 408.001 (West 2006); Lee Lewis Constr., Inc. v. Harrison, 64 S.W.3d 1, 19 (Tex. App.—Amarillo 1999), aff’d, 70 S.W.3d 778 (Tex. 2001). In addition to impairment of rights, we consider whether mandamus will “allow the appellate courts to give needed and helpful direction to the law that would otherwise prove elusive in appeals from final judgments.” Team Rocket, 256 S.W.3d at 262 (quoting Prudential, 148 S.W.3d at 136). In this case, the trial court’s ruling could be reviewed on appeal if Lewis Casing receives an adverse judgment. However, in order to obtain a reversal, Lewis Casing would be required to show that the trial court’s error probably caused the rendition of an improper judgment or probably prevented it from properly presenting the case to the court of appeals. See TEX. R. APP. P. 44.1(a). The denial of Lewis Casing’s right to designate Diamond D as a responsible third party “would skew the proceedings, potentially affect the outcome of the litigation, and compromise the presentation of [Lewis Casing’s] defense in ways unlikely to be apparent in the appellate record.” Brokers Logistics, 320 S.W.3d at 408; see also In re Oncor Elec. Delivery Co., 355 S.W.3d 304, 306 (Tex. App.—Dallas 2011, orig. proceeding). On such an appellate record, it is possible that Lewis Casing would be unable to obtain relief on direct appeal from the trial court’s clearly erroneous ruling. Brokers Logistics, 320 S.W.3d at 408. Thus, the trial court’s error may not be adequately addressed by an appeal. Oncor, 355 S.W.3d at 305. We must also consider whether mandamus will spare the litigants and the public “the time and money utterly wasted enduring eventual reversal of improperly conducted proceedings.” Team Rocket, 256 S.W.3d at 262 (quoting Prudential, 148 S.W.3d at 136). There will be a substantial waste of the litigants’

2 An employer that is a subscriber to workers’ compensation insurance may be designated as a responsible third party under Section 33.004 of the Civil Practice and Remedies Code. See Unitec Elevator, 178 S.W.3d at 58 n.5.

time and money if they proceed to trial without the trial court’s error being corrected, proceed through a direct appeal only to have the judgment reversed, and then retry the entire case with Diamond D designated as a responsible third party. We recognize that the additional time and expense of participating in a second trial does not, standing alone, justify the issuance of a writ of mandamus. Walker, 827 S.W.2d at 842. However, when a trial court’s error will cause a waste of judicial resources, an appellate court may properly consider that factor in determining the adequacy of a remedy by appeal. Id. at 843; Brokers Logistics, 320 S.W.3d at 409. In this case, the potential waste of resources, when combined with the possibility that Lewis Casing may be unable to successfully prosecute an appeal from an adverse judgment, supports the conclusion that Lewis Casing does not have an adequate remedy by appeal. See Brokers Logistics, 320 S.W.3d at 409. Therefore, we conclude that Lewis Casing lacks an adequate remedy by appeal. Because the trial court clearly abused its discretion when it denied Lewis Casing’s motion for designation of Diamond D as a responsible third party and because Lewis Casing lacks an adequate remedy by appeal, we sustain the sole issue presented by Lewis Casing in its petition for writ of mandamus. Accordingly, we conditionally grant Lewis Casing’s petition for writ of mandamus. The trial court is directed to vacate its March 17, 2014 “Order Denying Defendant Lewis Casing Crews, Inc.’s Motion for Designation of Responsible Third Party” and to enter a new order granting the motion for designation. The writ of mandamus will issue only if the trial court fails to act by July 30, 2014.

July 10, 2014 JIM R. WRIGHT Panel consists of: Wright, C.J., JUSTICE Willson, J., and Bailey, J.

APPENDIX TAB 12

(a) be by petition and answer;

(b) consist of a statement in plain and concise language of the plaintiff's cause of action or the defendant's grounds of defense. That an allegation be evidentiary or be of legal conclusion shall not be grounds for objection when fair notice to the opponent is given by the allegations as a whole; and

(c) contain any other matter which may be required by any law or rule authorizing or regulating any particular action or defense.

Pleadings that are not filed electronically must be in writing, on paper measuring approximately 8 ½ inches by 11 inches, and signed by the party or his attorney. The use of recycled paper is strongly encouraged.

All pleadings shall be construed so as to do substantial justice. RULE 46. PETITION AND ANSWER; EACH ONE INSTRUMENT OF WRITING

The original petition, first supplemental petition, second supplemental petition, and every other, shall each be contained in one instrument of writing, and so with the original answer and each of the supplemental answers.

RULE 47. CLAIMS FOR RELIEF

An original pleading which sets forth a claim for relief, whether an original petition, counterclaim, cross-claim, or third party claim, shall contain

(a) a short statement of the cause of action sufficient to give fair notice of the claim involved;

(b) a statement that the damages sought are within the jurisdictional limits of the court;

(c) except in suits governed by the Family Code, a statement that the party seeks:

(1) only monetary relief of $100,000 or less, including damages of any kind, penalties, costs, expenses, pre-judgment interest, and attorney fees; or

(2) monetary relief of $100,000 or less and non-monetary relief; or

(3) monetary relief over $100,000 but not more than $200,000; or

(4) monetary relief over $200,000 but not more than $1,000,000; or

(5) monetary relief over $1,000,000; and

(d) a demand for judgment for all the other relief to which the party deems himself entitled.

Relief in the alternative or of several different types may be demanded; provided, further, that upon special exception the court shall require the pleader to amend so as to specify the maximum amount claimed. A party that fails to comply with (c) may not conduct discovery until the party’s pleading is amended to comply.

Comment to 2013 change: Rule 47 is amended to require a more specific statement of the relief sought by a party. The amendment requires parties to plead into or out of the expedited actions process governed by Rule 169, added to implement section 22.004(h) of the Texas Government Code. Except in a suit governed by the Family Code, the Property Code, the Tax Code, or Chapter 74 of the Civil Practice & Remedies Code, a suit in which the original petition contains the statement in paragraph (c)(1) is governed by the expedited actions process. The further specificity in paragraphs (c)(2)-(5) is to provide information regarding the nature of cases filed and does not affect a party’s substantive rights.

RULE 48. ALTERNATIVE CLAIMS FOR RELIEF

A party may set forth two or more statements of a claim or defense alternatively or hypothetically, either in one count or defense or in separate counts or defenses. When two or more statements are made in the alternative and one of them if made independently would be sufficient, the pleading is not made insufficient by the insufficiency of one or more of the alternative statements. A party may also state as many separate claims or defenses as he has regardless of consistency and whether based upon legal or equitable grounds or both.

RULE 49. WHERE SEVERAL COUNTS

Where there are several counts in the petition, and entire damages are given, the verdict or judgment, as the case may be, shall be good, notwithstanding one or more of such counts may be defective.

RULE 50. PARAGRAPHS, SEPARATE STATEMENTS

All averments of claim or defense shall be made in numbered paragraphs, the contents of each of which shall be limited as far as practicable to a statement of a single set of circumstances; and a paragraph may be referred to by number in all succeeding pleadings, so long as the pleading containing such paragraph has not been superseded by an amendment as provided by Rule 65. Each claim founded upon a separate transaction or occurrence and each defense other than denials shall be stated in a separate count or defense whenever a separation facilitates the clear presentation of the matters set forth.

APPENDIX TAB 13

Page 52 TEXAS RULES OF APPELLATE PROCEDURE

(c) reverse the trial court's judgment in whole or in part Rule 44. Reversible Error and render the judgment that the trial court should have rendered; 44.1. Reversible Error in Civil Cases

(d) reverse the trial court's judgment and remand the (a) Standard for Reversible Error. No judgment may be case for further proceedings; reversed on appeal on the ground that the trial court made an error of law unless the court of appeals (e) vacate the trial court's judgment and dismiss the concludes that the error complained of: case; or (1) probably caused the rendition of an improper (f) dismiss the appeal. judgment; or

43.3.Rendition Appropriate Unless Remand Necessary (2) probably prevented the appellant from properly presenting the case to the court of appeals. When reversing a trial court's judgment, the court must render the judgment that the trial court should have rendered, (b) Error Affecting Only Part of Case. If the error except when: affects part of, but not all, the matter in controversy and that part is separable without unfairness to the (a) a remand is necessary for further proceedings; or parties, the judgment must be reversed and a new trial ordered only as to the part affected by the error. (b) the interests of justice require a remand for another The court may not order a separate trial solely on trial. unliquidated damages if liability is contested.

43.4. Judgment for Costs in Civil Cases 44.2. Reversible Error in Criminal Cases

In a civil case, the court of appeals’ judgment should (a) Constitutional Error. If the appellate record in a award to the prevailing party the appellate costs — including criminal case reveals constitutional error that is preparation costs for the clerk’s record and the reporter’s record subject to harmless error review, the court of appeals — that were incurred by that party. But the court of appeals may must reverse a judgment of conviction or punishment tax costs otherwise as required by law or for good cause. unless the court determines beyond a reasonable doubt that the error did not contribute to the 43.5. Judgment Against Sureties in Civil Cases conviction or punishment.

When a court of appeals affirms the trial court judgment, (b) Other Errors. Any other error, defect, irregularity, or modifies that judgment and renders judgment against the or variance that does not affect substantial rights appellant, the court of appeals must render judgment against the must be disregarded. sureties on the appellant's supersedeas bond, if any, for the performance of the judgment and for any costs taxed against the (c) Presumptions. Unless the following matters were appellant. disputed in the trial court, or unless the record affirmatively shows the contrary, the court of 43.6. Other Orders appeals must presume:

The court of appeals may make any other appropriate order (1) that venue was proved in the trial court; that the law and the nature of the case require. (2) that the jury was properly impaneled and Notes and Comments sworn;

Comment to 1997 changes: Former Rules 80(a) - (c) and (3) that the defendant was arraigned; 82 are merged. Paragraph 43.2(e) allows the court of appeals to vacate the trial court’s judgment and dismiss the case; paragraph (4) that the defendant pleaded to the indictment or 43.2(f) allows the court of appeals to dismiss the appeal. Both other charging instrument; and provisions are new but codify current practice. Paragraph 43.3(a) is moved here from former Rule 81(c). Paragraph (5) that the court's charge was certified by the trial 43.3(b), allowing a remand in the interest of justice, is new. court and filed by the clerk before it was read Subdivisions 43.4 and 43.5 are from former Rule 82. to the jury.

44.3. Defects in Procedure *53 TEXAS RULES OF APPELLATE PROCEDURE Page 53

A court of appeals must not affirm or reverse a judgment Rule 46. Remittitur in Civil Cases or dismiss an appeal for formal defects or irregularities in appellate procedure without allowing a reasonable time to correct 46.1. Remittitur After Appeal Perfected or amend the defects or irregularities. If the trial court suggests a remittitur but the case is 44.4. Remediable Error of the Trial Court appealed before the remittitur is filed, the party who would make the remittitur may do so in the court of appeals in the same (a) Generally. A court of appeals must not affirm or manner as in the trial court. The court of appeals must then reverse a judgment or dismiss an appeal if: render the judgment that the trial court should have rendered if the remittitur had been made in the trial court. (1) the trial court's erroneous action or failure or refusal to act prevents the proper presentation 46.2. Appeal on Remittitur of a case to the court of appeals; and If a party makes the remittitur at the trial judge’s (2) the trial court can correct its action or failure to suggestion and the party benefitting from the remittitur appeals, act. the remitting party is not barred from contending in the court of appeals that all or part of the remittitur should not have been (b) Court of Appeals Direction if Error Remediable. If required, but the remitting party must perfect an appeal to raise the circumstances described in (a) exist, the court of that point. If the court of appeals sustains the remitting party's appeals must direct the trial court to correct the error. contention that remittitur should not have been required, the The court of appeals will then proceed as if the court must render the judgment that the trial court should have erroneous action or failure to act had not occurred. rendered.

Notes and Comments 46.3. Suggestion of Remittitur by Court of Appeals

Comment to 1997 change: Former Rules 80(d), 81 and 83 The court of appeals may suggest a remittitur. If the are merged. The reversible error standard in subdivision 44.1 is remittitur is timely filed, the court must reform and affirm the amended to omit the reference to an action “reasonably trial court's judgment in accordance with the remittitur. If the calculated to cause” an improper judgment, but no substantive remittitur is not timely filed, the court must reverse the trial change is intended. Paragraph 44.2(a) is amended to limit its court's judgment. standard of review to constitutional errors that are subject to harmless error review. Paragraph 44.2(b) is new and is taken 46.4. Refusal to Remit Must Not Be Mentioned in Later from Federal Rule of Criminal Procedure 52(a) without Trial substantive change. Paragraph 44.2(c) is former Rule 80(d) without substantive change. Subdivision 44.3 is amended to If the court of appeals suggests a remittitur but no delete the reference to defects of “substance” and to delete the remittitur is filed, evidence of the court's determination regarding provisions regarding the late filing of the record. remittitur is inadmissible in a later trial of the case.

46.5. Voluntary Remittitur Rule 45. Damages for Frivolous Appeals in Civil Cases If a court of appeals reverses the trial court's judgment because of a legal error that affects only part of the damages If the court of appeals determines that an appeal is awarded by the judgment, the affected party may - within 15 frivolous, it may — on motion of any party or on its own days after the court of appeals' judgment - voluntarily remit the initiative, after notice and a reasonable opportunity for response amount that the affected party believes will cure the reversible — award each prevailing party just damages. In determining error. A party may include in a motion for rehearing - without whether to award damages, the court must not consider any waiving any complaint that the court of appeals erred - a matter that does not appear in the record, briefs, or other papers conditional request that the court accept the remittitur and affirm filed in the court of appeals. the trial court's judgment as reduced. If the court of appeals determines that the voluntary remittitur is not sufficient to cure Notes and Comments the reversible error, but that remittitur is appropriate, the court must suggest a remittitur in accordance with Rule 46.3. If the Comment to 1997 change: This is former Rule 84. The remittitur is timely filed and the court of appeals determines that limit on the amount of the sanction that may be imposed is the voluntary remittitur cures the reversible error, the court must repealed. A requirement of notice and opportunity to respond is accept the remittitur and reform and affirm the trial court added. judgment in accordance with the remittitur.