Eagle Properties, Ltd., General Partner, M.W. (Buddy) Branum v. Texas Commerce Bank National Association, a National Banking Association--Appeal from 142nd District Court of Midland County

11th Court of Appeals

Eastland, Texas

Memorandum Opinion

Eagle Properties, Ltd., General Partner, M.W. (Buddy) Branum

Appellant

Vs. No. 11-04-00196-CV -- Appeal from Midland County

Texas Commerce Bank National Association, a National Banking Association

Appellee

Eagle Properties, Ltd. (Eagle) appeals the trial court=s denial of its motion for default judgment and the granting of summary judgment in favor of Texas Commerce Bank National Association, a National Banking Association (TCB). We affirm. Furthermore, we find Eagle=s appeal to be frivolous and grant TCB=s motion for sanctions.

In 1999, Eagle sued TCB, alleging fraud. In a jury trial, the jury found for TCB. Eagle appealed the judgment but then voluntarily dismissed its own appeal. On June 15, 2000, Eagle filed a petition for bill of review, alleging jury misconduct. The district court granted summary judgment on this claim in favor of TCB.

On June 21, 2002, Eagle filed a second petition for bill of review, this time reasserting the fraud claims previously litigated during the 1999 trial. On July 26, 2002, TCB filed an answer to this petition. However, the answer mistakenly included the cause number of Eagle=s first petition for bill of review. On August 12, 2002, Eagle responded to this clerical error by filing a motion for default judgment, alleging that TCB failed to file an answer to its second petition for bill of review. The district court denied Eagle=s motion on September 9, 2002.

On September 12, 2002, Eagle appealed the district court=s order denying its motion for default judgment. TCB responded by filing a motion to dismiss the appeal for lack of jurisdiction. Agreeing with TCB that the district court=s order was interlocutory and not subject to appeal, the El Paso Court of Appeals dismissed Eagle=s appeal on October 24, 2002. Eagle responded by appealing to the Texas Supreme Court. The court denied Eagle=s petition for review on February 13, 2003.

On September 30, 2003, Eagle filed a motion to set aside the district court=s previous order denying Eagle=s motion for default judgment. On July 16, 2004, the district court denied this motion. At the same time, the district court granted TCB=s motion for summary judgment on Eagle=s second petition for bill of review. This appeal followed.

In its first issue on appeal, Eagle asserts that the trial court erred when it failed to grant Eagle a default judgment. In its second issue on appeal, Eagle asserts that the trial court erred when it permitted TCB to file an answer to Eagle=s second petition for bill of review that mistakenly included the cause number from Eagle=s first petition for bill of review. The two issues are related, and we will address them together.

We review the district court=s ruling on a motion for default judgment for abuse of discretion. See Cottonwood Valley Home Owners Association v. Hudson, 75 S.W.3d 601, 603 (Tex.App. B Eastland 2002, no pet=n). The district court may render a default judgment on the pleadings against a defendant who has not filed an answer. See TEX.R.CIV.P. 329. However, a no-answer default judgment may not be rendered after the defendant has filed an answer. Davis v. Jefferies, 764 S.W.2d 559, 560 (Tex.1989). In this case, Eagle sought its default judgment after TCB had filed an answer. This was an inappropriate course of action.[1] When an answer is defective, the appropriate remedy is to file special exceptions. See Horizon/CMS Healthcare Corporation v. Auld, 34 S.W.3d 887, 897 (Tex.2000).

Eagle asserts, however, that TCB filed Athe wrong answer in the wrong lawsuit.@ We disagree. The record indicates that TCB filed its answer to Eagle=s second petition for bill of review with the district court on July 26, 2002. Even though the cause number at the top of TCB=s answer incorrectly read ACV-43,034@ instead of ACV-43,799,@ the title clearly identifies the document as ADefendant=s Original Answer to Plaintiff=s Second Original Petition for Bill of Review.@ Eagle should have known that the incorrect cause number was simply a clerical error. If Eagle was truly concerned about this defect, it should have filed a special exception. The trial court did not abuse its discretion in denying Eagle=s motion for default judgment. We overrule Eagle=s first and second issues on appeal.

In its third issue on appeal, Eagle asserts that the trial court=s denial of Eagle=s motion for default judgment deprived it of procedural due process. Eagle devotes a total of two brief paragraphs to this issue and, apart from the relevant constitutional provisions, fails to provide this court with any authority to support its position. This issue is inadequately briefed, and we will not address it. See TEX.R.APP.P. 38.1(h).

In its fourth issue on appeal, Eagle asserts that the trial court erred in granting summary judgment in favor of TCB. Eagle devotes one paragraph to this issue and again fails to provide this court with any authority to support its position. This issue is inadequately briefed, and we will not address it. See Rule 38.1(h).

Finally, we address TCB=s motion for sanctions. An appellate court is permitted, on motion of any party or on its own initiative, to award the prevailing party just damages if the court determines that an appeal is frivolous. See TEX.R.APP.P. 45. In determining whether to award damages, we will not consider any matter that does not appear in the record, briefs, or other papers filed in this court. See Rule 45.

The decision to award sanctions is a matter within our discretion, which we exercise with prudence and caution after careful deliberation. Bridges v. Robinson, 20 S.W.3d 104, 115 (Tex.App. - Houston [14th Dist.] 2000, no pet=n). The right to appeal is a most sacred and valuable one. See Bradt v. West, 892 S.W.2d 56, 78 (Tex.App. - Houston [1st Dist.] 1994, writ den=d). The appeals process must be treated with the utmost respect:

We will not permit spurious appeals, which unnecessarily burden parties and our already crowded docket, to go unpunished. Such appeals take the court=s attention from appeals filed in good faith, wasting court time that could and should be devoted to those appeals. No litigant has the right to put a party to needless burden and expense or to waste a court=s time that would otherwise be spent on the sacred task of adjudicating the valid disputes of Texas citizens. (Citations omitted)

Bradt v. West, supra at 79.

To determine objectively whether an appeal is frivolous, we look at the record from the viewpoint of the advocate and decide whether he had reasonable grounds to believe the case could be reversed. Smith v. Brown, 51 S.W.3d 376, 381 (Tex.App. - Houston [1st Dist.] 2001, pet=n den=d).

After reviewing each of the cases Eagle cites in its brief, we find that none of the cases support the argument that, when a defendant mistakenly files an answer under the wrong cause number, the plaintiff is entitled to a default judgment. In fact, this argument is contrary to the great weight of authority that holds that courts should go to great lengths to avoid default judgments against parties that have filed answers, even if they are defective. See, e.g., Smith v. Lippmann, 826 S.W.2d 137, 138 (Tex.1992); KSNG Architects, Inc. v. Beasley, 109 S.W.3d 894, 898 (Tex.App. - Dallas 2003, no pet=n); Computize, Inc. v. NHS Communications Group, Inc., 992 S.W.2d 608, 612 (Tex.App. - Texarkana 1999, no pet=n); Hock v. Salaices, 982 S.W.2d 591, 593 (Tex.App. - San Antonio 1998, no pet=n); Home Savings of America FSB v. Harris County Water Control and Improvement District # 70, 928 S.W.2d 217, 218 (Tex.App. - Houston [14th Dist.] 1996, no writ); R.T.A. International, Inc. v. Cano, 915 S.W.2d 149, 151 (Tex.App. - Corpus Christi 1996, writ den=d).

Because there is no authority for its argument and because there is substantial authority against its argument, we conclude that Eagle had no reasonable grounds to believe this case could be reversed. Eagle=s appeal, therefore, is frivolous; and TCB=s motion for sanctions is granted.

In an affidavit filed with the district court, Janet E. Militello (lead counsel for TCB) stated that, since receiving Eagle=s notice of appeal, the total cost incurred by TCB, including attorney=s fees and expenses, was no less than $3,000. Therefore, we award damages to TCB against Eagle in the amount of $3,000. See TEX.R.APP.P. 45.

The judgment of the district court is affirmed.

JIM R. WRIGHT

JUSTICE

August 31, 2005

Not designated for publication. See TEX.R.APP.P. 47.2(a).

Panel consists of: Wright, J., and McCall, J.[2]

[1]We note that in a similar case an appellate court held that it was unethical for an attorney to deliberately seek a default judgment against a party who had filed an answer under the wrong cause number by mistake. See Owens v. Neely, 866 S.W.2d 716, 720 n.2 (Tex.App. - Houston [14th Dist.] 1993, writ den=d).

[2]W. G. Arnot, III, Chief Justice, retired effective July 31, 2005. The chief justice position is vacant.