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Analytical Technology Consultants, Inc. v. Axis Capital, Inc.

Court of Appeals of Texas, Fifth District, Dallas

June 19, 2017


         On Appeal from the 95th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-15-08507-D

          Before Justices Bridges, Myers, and Brown.



         Analytical Technology Consultants, Inc. and Hector Bass appeal the trial court's judgment awarding Axis Capital, Inc. damages and attorney's fees. Appellants bring three issues on appeal contending (1) the trial court's judgment is indefinite and void; (2) the trial court erred by granting Axis's motion for summary judgment; and (3) the trial court abused its discretion by denying appellants' motion for new trial. We conclude the trial court erred by granting the motion for summary judgment. Therefore, we reverse the trial court's judgment and remand the cause for further proceedings.


         In September 2014, Analytical agreed to lease a "Ditch Witch" from Axis for forty-nine months. The lease required Analytical to pay $23, 000 for the first month's rent and $3, 956.36 per month for the next forty-eight months. Bass executed a personal guaranty of the lease. Analytical stopped paying the monthly rent in January 2015. In March of that year, Axis notified Analytical that it was in default under the lease, and Axis demanded payment of the past and future rentals discounted to current value and demanded the return of the leased equipment. Despite repeated demands, appellants did not return the equipment or tell Axis where the equipment was located. In July, Axis filed suit against Analytical for breach of the lease and against Bass for breach of his guaranty. Axis also sought recovery of the equipment in its suit and applied for a writ of sequestration for the equipment. Appellants answered the suit but did not assert any affirmative defenses. On August 3, the trial court issued an order for writ of sequestration. Sometime between then and October 23, appellants returned the equipment to Axis.

         On November 3, 2015, Axis moved for summary judgment seeking damages of $217, 654.75 plus any additional amounts accruing before judgment, postjudgment attorney's fees, and permanent possession of the property. The motion was set for hearing on December 18, 2015. On November 13, appellants' attorney received an electronic notification of the December 18 setting. Appellants did not file a response to the motion for summary judgment, and they and their attorney did not appear at the hearing on the motion for summary judgment. On December 18, the trial court granted the motion for summary judgment, awarded Axis damages of $196, 233.12 and attorney's fees of $25, 201.12, and ordered that Axis recover any additional attorney's fees and expenses for enforcement of the judgment. The judgment also ordered that Axis was entitled to permanent possession of the equipment and to sell the equipment, retain the proceeds, and apply the proceeds to the amounts owed by appellants.

         Appellants timely filed a motion for new trial asserting that their attorney did not see the e-mail notification setting the motion for summary judgment for a hearing and therefore was unaware of the deadline for appellants' response to the motion for summary judgment. See Tex. R. Civ. P. 166a(c) (response to motion for summary judgment due "not later than seven days prior to the day of hearing"). Appellants also argued Axis miscalculated the discount of future rental payments and that the judgment was $13, 325.33 higher than it should have been. The trial court denied the motion for new trial.

         After the trial court signed the judgment Axis filed documents stating it had sold the property on January 26, 2016 for $72, 500 to a third party and credited the net sales proceeds, $65, 250, toward the judgment. Axis also filed documents showing it had credited the judgment by $13, 325.33 retroactive to the date of the judgment, which was the amount appellants asserted the judgment was too high due to Axis's alleged miscalculation of the discount for future rental payments.


         In their second issue, appellants contend the trial court erred by granting Axis's motion for summary judgment. The standard for reviewing a traditional summary judgment is well established. See Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985); McAfee, Inc. v. Agilysys, Inc., 316 S.W.3d 820, 825 (Tex. App.-Dallas 2010, no pet.). The movant has the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c). In deciding whether a disputed material fact issue exists precluding summary judgment, evidence favorable to the nonmovant will be taken as true. Nixon, 690 S.W.2d at 549; In re Estate of Berry, 280 S.W.3d 478, 480 (Tex. App.-Dallas 2009, no pet.). Every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. City of Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005). We review a summary judgment de novo to determine whether a party's right to prevail is established as a matter of law. Dickey v. Club Corp., 12 S.W.3d 172, 175 (Tex. App.-Dallas 2000, pet. denied).

         A nonmovant need not respond to a motion for summary judgment. However, the failure to file a response limits the issues the nonmovant may assert on appeal:

[T]he non-movant's failure to answer or respond cannot supply by default the summary judgment proof necessary to establish the movant's right. If a non-movant fails to present any issues in its response or answer, the movant's right is not established and the movant must still establish its entitlement to summary judgment. The effect of such a failure is that the non-movant is limited on appeal to arguing the legal sufficiency of the grounds presented by the movant.

McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 343 (Tex. 1993) (citation omitted); see also, Tex.R.App.P. 166a(c) (issues not expressly presented in the motion or response shall not be ...

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