Adi, John v. Prudential Property and Casualty Insurance Company, A subsidiary of the Prudential Insurance Company of America and Brown, Dan--Appeal from 61st District Court of Harris County

Affirmed and Memorandum Opinion filed December 11, 2003

Affirmedand Memorandum Opinion filed December 11, 2003.

In The

Fourteenth Court of Appeals

____________

NO. 14-01-01001-CV

____________

JOHN ADI, Appellant

V.

PRUDENTIAL PROPERTY AND CASUALTY INSURANCE COMPANY, A SUBSIDIARY OF THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, AND DAN BROWN, Appellees

On Appeal from the 61st District Court

Harris  County, Texas

Trial Court Cause No. 00-62169

M E M O R A N D U M O P I N I O N

Appellant John Adi appeals from a grant of summary judgment in favor of appellees Prudential Property and Casualty Insurance Company, a Subsidiary of the Prudential Insurance Company of America, and Dan Brown, dismissing his defamation claim against appellees. We affirm.

Adi=s lawsuit was based upon alleged defamatory statements contained in an internal Prudential claims note written by Brown, a Prudential employee. Brown prepared the claims note, dated January 30, 1998, to provide notice that the particular claim involved a Apretext@ or fake policy used in a sting operation by Texas Department of Insurance investigators to uncover suspected insurance fraud. In the note, Brown stated that Adi was arrested in connection with the sting operation on January 29, 1998, and charged with insurance fraud, a third-degree felony. In fact, Adi was arrested at a later date and was charged with Aengaging in organized criminal activity,@ a second-degree felony. Adi was later convicted of the crime and was sentenced to seventy years= imprisonment in the Texas Department of Criminal Justice, Institutional Division, where he is currently incarcerated.

On December 1, 2000, Adi filed suit against appellees alleging that the statements in the claims note that he had been arrested on January 28, 1998, and charged with insurance fraud, a third-degree felony, were per se libelous and defamatory. Appellees moved for summary judgment on the grounds that the lawsuit was barred by the applicable one-year statute of limitations. Adi then filed a response and an amended petition alleging the discovery rule. Appellees filed a second motion for summary judgment, arguing that the statements were substantially true and Adi was not injured by them. On July 27, 2001, the trial court granted summary judgment and dismissed Adi=s claims against appellees; the order does not identify the specific grounds on which the summary judgment ruling was based. On August 21, 2001, Adi filed a motion for new trial and a motion for leave to file a third amended original petition; on September 4, 2001, he also filed a supplemental motion for new trial. On September 13, 2001, the trial court denied Adi=s motions. This appeal followed.

On appeal, Adi raises eight issues that may be grouped into three general categories: (1) error in the admission of appellees= summary judgment evidence; (2) error in the trial court=s grant of summary judgment; and (3) error in the trial court=s denial of post-judgment motions. We will address each in turn.

1. The Summary Judgment Evidence

In his second and third issues, Adi contends that the trial court erred in overruling his objections to appellees= summary judgment evidence, and that the summary judgment evidence was insufficient to support the trial court=s grant of summary judgment. The admission or exclusion of evidence rests within the sound discretion of the trial court. City of Brownsville v. Alvarado, 897 S.W.2d 750, 753 (Tex. 1995). To obtain reversal of a judgment based upon error in the admission or exclusion of evidence, the appellant must show the following: (1) the trial court did in fact commit error, and (2) the error was reasonably calculated to cause and probably did cause the rendition of an improper judgment. Tex. R. App. P. 44.1; Gee v. Liberty Mut. Fire Ins. Co., 765 S.W.2d 394, 396 (Tex. 1989).

Adi first complains that appellees= Exhibit A, which consists of copies of Adi=s handwritten second amended original petition and his answers to appellees= interrogatories, was not authenticated. Rule 166a(f) provides that A[d]efects in the form of affidavits or attachments will not be grounds for reversal unless specifically pointed out by objection by an opposing party with opportunity, but refusal, to amend.@ Tex. R. Civ. P. 166a(f). Adi admits that he did not raise this objection in the trial court before summary judgment was granted, but cites Kotzur v. Kelly, 791 S.W.2d 254, 257 (Tex. App.CCorpus Christi 1990, no writ), for the proposition that the complete absence of authentication is a defect of substance that is not waived by a party failing to object and may be argued for the first time on appeal. Adi directs us to no published decision of this Court addressing the issue, but we need not decide whether we would reach the same conclusion as the Kotzur court, because, even if we assume Adi=s objection was properly preserved, it would fail on the merits.

Here, Adi does not dispute that the exhibits are true and correct copies of these documents. Indeed, the second amended petition appears to be the live petition on file when the motion for summary judgment was submitted, and Adi does not contend that there is any variance between the petition on file and the one attached to appellees= motion. Rule 166a provides that the summary judgment sought Ashall be rendered forthwith if (i) the deposition transcripts, interrogatory answers, and other discovery responses referenced or set forth in the motion or response, and (ii) the pleadings . . . on file at the time of the hearing@ show that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. See Tex. R. Civ. P. 166a(c). From our review, it appears that appellees referenced the petition in their motion not as evidence, but primarily to advise the trial court of the nature of Adi=s claims, and they made it an exhibit merely for the trial court=s convenience. In this circumstance, it was unnecessary to separately authenticate the petition (or even attach it as an exhibit), because it was already on file with the court and had not been superceded by a later petition when the trial court granted the summary judgment. As for the interrogatory responses, Rule 166a(d) permits discovery products to be used as summary judgment evidence with proper notice to the opposing party. See Tex. R. Civ. P. 166a(d). Adi=s verified interrogatory answers therefore constituted proper summary judgment evidence. Additionally, Adi fails to argue or demonstrate in any way that these documents probably caused the rendition of an improper judgment. We therefore overrule Adi=s objections to appellees= Exhibit A.

Next, Adi objects to Exhibit B, Brown=s affidavit, on the grounds that it contains hearsay. Hearsay is a defect of form, which is waived if the party does not properly and timely bring the objection to the attention of the trial court. See Hou-Tex, Inc. v. Landmark Graphics, 26 S.W.3d 103, 112 (Tex. App.CHouston [14th Dist.] 2000, no pet.); see also Tex. R. Evid. 802 (AInadmissible hearsay admitted without objection shall not be denied probative value merely because it is hearsay.@). Although Adi raised this objection below, he failed to obtain a written ruling from the trial court; therefore, the objection is waived. See McMahan v. Greenwood, 108 S.W.3d 467, 498 (Tex. App.CHouston [14th Dist.] 2003, n.p.h.); Rogers v. Continental Airlines, Inc., 41 S.W.3d 196, 200 (Tex. App.CHouston [14th Dist.] 2001, no pet.); Hou-Tex, Inc., 26 S.W.3d at 112.

Adi contends the trial court overruled his objections when it signed the order granting summary judgment. However, we cannot infer from the mere fact that the trial court granted appellees= summary judgment motion that it implicitly ruled on Adi=s objections, and the trial court=s order does not reflect that it considered Adi=s objections. See Rogers, 41 S.W.3d at 200; see also Dolcefino v. Randolph, 19 S.W.3d 906, 927 (Tex. App.CHouston [14th Dist.] 2000, pet. denied). Therefore, Brown=s affidavit remains a part of the record. See Rogers, 41 S.W.3d at 200. We also note that Adi concedes that the affidavit is admissible as a business records affidavit for the purpose of authenticating the claims note, and, significantly, he does not complain about any part of the contents of the claims note. Properly authenticated business records are exceptions to the hearsay rule. See Tex. R. Evid. 803(6); 902(10). Therefore, we overrule Adi=s objection to Exhibit B.

Next, Adi raises numerous complaints about the remaining two exhibits to appellees= motion, Exhibits C and D. Exhibit C is a copy of the judgment of the jury verdict finding Adi guilty of engaging in organized criminal activity and sentencing him to seventy years= confinement, and Exhibit D is a copy of a capias and indictment relating to Adi=s arrest for the charged offense and identifying Adi=s prior conviction for the felony offenses of AFalse Statement in Acquisition of Firearms, Dealing in Firearms without a License, and False Statement to a Grand Jury.@ Adi complains the exhibits are uncertified, not authenticated, and improperly authenticated, and are not relevant to his claims.

We first address Adi=s objections that the exhibits are uncertified, not authenticated, and improperly authenticated, and as such, are hearsay and incompetent summary judgment evidence. Adi concedes that certification was Aattempted,@ but he complains that the certifications were improper because the date of the certification appears to be AJune 4, 1996,@ and the documents were not created until several years later. Because a certification is on the documents (although with a wrong date), we will address only his complaint that the documents were improperly certified.

Like hearsay, improper certification or authentication is a defect of form, and is waived by Adi=s failure to secure rulings on these objections. See Rogers, 41 S.W.3d at 200; Hicks v. Humble Oil & Ref. Co., 970 S.W.2d 90, 93 (Tex. App.CHouston [14th Dist.] 1998, pet. denied). Moreover, Adi=s objections were untimely, because he did not raise them until after the trial court rendered summary judgment. See Life Ins. Co. of Virginia v. Gar-Dal, Inc., 570 S.W.2d 378, 381 (Tex. 1978) (holding that defects of form are waived if not pointed out to trial court before summary judgment is rendered); Williamson v. New Times, Inc., 980 S.W.2d 706, 712 (Tex. App.CFort Worth 1998, no pet.) (holding that, in an appeal from a summary judgment, an objection raised for the first time in a motion for new trial was untimely and insufficient to preserve error).

Lastly, we address Adi=s objections to Exhibits C and D on the grounds of relevance. Although Adi did not obtain a ruling on his relevance objections, lack of relevance is a defect of substance that is not waived by the failure to obtain a ruling from the trial court. See McMahan, 108 S.W.3d at 498. Adi claims that the documents are not relevant to any issue in the case because the documents were created some time after January 30, 1998, the date the allegedly defamatory statements were published. We disagree. As discussed below, the facts contained in Exhibits C and D are relevant to the issues Adi raised in his lawsuit, as well as appellees= defense of substantial truth. The fact that they were created several months after the allegedly defamatory publication does not, in this circumstance, render them irrelevant. We therefore overrule Adi=s objections on the grounds of relevance.

Accordingly, we overrule Adi=s second and third issues.

2. The Substantive Claims

In issues one, four, five, and six, Adi contends the trial court erred in granting summary judgment. A movant for summary judgment has the burden to show that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. See Tex. R. Civ. P. 166a(c). To be entitled to summary judgment, a defendant must either (1) conclusively negate at least one essential element of each of the plaintiff=s causes of action, or (2) conclusively establish each element of an affirmative defense to each claim. Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). In reviewing a summary judgment, evidence favorable to the nonmovant is taken as true, and all reasonable inferences are indulged in the nonmovant=s favor. Nixon v. Mr. Property Mgmt. Co., 690 S.W.2d 546, 548B49 (Tex. 1985). Because the trial court=s order does not specify the grounds upon which summary judgment was granted, we may affirm the judgment on any theory advanced in the motions that is meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).

Appellees raised defenses of statute of limitations, substantial truth, and lack of injury in their motions for summary judgment. Because we find that appellees have demonstrated the substantial truth of the statements as a matter of law, we need not discuss the other bases for summary judgment.

To maintain a defamation cause of action, the plaintiff must prove that the defendant (1) published a false statement about the plaintiff (2) that was defamatory (3) while acting with either actual malice, if the plaintiff was a public official or public figure, or negligence, if the plaintiff was a private individual, regarding the truth of the statement. See WFAA TV, Inc. v. McLemore, 978 S.W.2d 568, 571 (Tex. 1998). Truth, which is an affirmative defense, is a complete defense to defamation. Randall=s Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 646 (Tex. 1995). Because truth is an affirmative defense, the defendant bears the burden of establishing that the alleged defamatory statements were true. Knox v. Taylor, 992 S.W.2d 40, 54 (Tex. App.CHouston [14th Dist.] 1999, no pet.). The statements need not be literally true; rather, the Asubstantial truth@ is sufficient. See McIlvain v. Jacobs, 794 S.W.2d 14, 15 (Tex. 1990); Stephens v. Delhi Gas Pipeline Corp., 924 S.W.2d 765, 769 (Tex. App.CTexarkana 1996, writ denied); Gulf Constr. Co. v. Mott, 442 S.W.2d 778, 784 (Tex. Civ. App.CHouston [14th Dist.] 1969, no writ). To decide whether a publication is substantially true, we consider whether the publication was more damaging to the plaintiff=s reputation, in the mind of the average reader, than a truthful statement would have been. See McIlvain at 16.

Here, Adi complains he was defamed by the statements in the claims note that (1) on January 29, 1998, he was arrested and charged with (2) insurance fraud, a third degree felony. Appellees= summary judgment evidence demonstrated that, in fact, Adi was arrested in early March of 1998 for engaging in organized criminal activity in connection with the insurance fraud sting operation, and that he was eventually convicted of the offenseCa second-degree felonyCand sentenced to seventy years= imprisonment. The indictment showed that on January 13, 1998, Adi was charged with engaging in organized criminal activity; it detailed his unlawful exercise of control over checks issued by the Republic Western Insurance Company, and named the related case of another participant in the scheme that was also identified in the claims note. The capias showed that Adi was arrested on March 9, 1998, for the charged offense, and the judgment provided the details of his conviction and sentencing.

The claims note misstated the date of Adi=s arrest and the exact offense charged, but these errors do not change the fact that Adi was arrested and, in fact, convicted of a more serious felony than described in the claims note. See Adi v. Houston Chronicle Publ=g. Co., No. 14-01-00213-CV, 2003 WL 61121 at *2 (Tex. App.CHouston [14th Dist.] Jan. 9, 2003, no pet.) (holding, in case arising out of same facts, defamation claim against newspaper for misstating exact date of arrest and amount of false claims filed was defeated as a matter of law by substantial truth of arrest and conviction for filing false insurance claims). If anything, the arrest and conviction for the second-degree felony, rather than the third-degree felony, is moreCnot lessCdamaging than the statements made.

Consequently, the statements could not have been more damaging to Adi=s reputation, in the mind of the average reader, than Adi=s arrest and conviction for engaging in organized criminal activity, especially since the criminal activityCan insurance fraud schemeCwas significant enough to be the target of a sting operation. Adi contends that the statements were not literally true, and that he has raised a fact issue precluding summary judgment because he averred in an affidavit in response to appellees= motion that he was not arrested on January 29, 1998, and charged with the specific crime of insurance fraud, a second degree felony, as stated in the claims note. However, as Adi acknowledges in his brief, the test is not literal truth, but substantial truth. See Stephens, 924 S.W.2d at 769; Mott, 442 S.W.2d at 784. Therefore, we hold that Adi=s claims are barred, as a matter of law, by the substantial truth of the statements.

3. The Post-Judgment Motions

Finally, we address Adi=s seventh and eighth issues, in which he complains that the trial court erred in refusing to grant his post-judgment motions.

We first address Adi=s complaint that the trial court erred in denying him leave to file a third amended petition. Adi filed this motion after the trial court granted appellees= summary judgment motion and dismissed Adi=s claims. Once judgment was rendered, however, it was too late to request amendment. A trial court cannot grant a motion to amend the pleadings once the trial court renders judgment. See Mitchell v. LaFlamme, 60 S.W.3d 123, 132 (Tex. App.CHouston [14th Dist.] 2000, no pet.); Automaker, Inc. v. C.C.R.T. Co., 976 S.W.2d 744, 746 (Tex. App.CHouston [1st Dist.] 1998, no pet.); Texas Gen. Indem. Co. v. Ellis, 888 S.W.2d 830, 831B32 (Tex. App.CTyler 1994, no writ). We therefore overrule Adi=s seventh issue.

We next address Adi=s complaint that the trial court erred in refusing to grant his motion for new trial and supplemental motion for new trial. The trial court=s denial of a motion for new trial will not be disturbed on appeal absent an abuse of discretion. Strackbein v. Prewitt, 671 S.W.2d 37, 38 (Tex. 1984).

Here, Adi=s primary contention is that his motions advised the trial court that appellees= summary judgment evidence was not properly authenticated and thus inadmissible and incompetent to support summary judgment. However, we have addressed his objections to the admissibility of the evidence and found that they were either waived or without merit. Adi=s remaining arguments on appeal merely restate the arguments raised elsewhere in his brief, which we have already addressed. Because we have found that the trial court did not err in granting appellees summary judgment on Adi=s claims, we overrule his eighth issue. The judgment of the trial court is affirmed.

/s/ Wanda McKee Fowler

Justice

Judgment rendered and Memorandum Opinion filed December 11, 2003.

Panel consists of Justices Yates, Hudson, and Fowler.