Court of Appeals of Texas, Fifth District, Dallas
Appeal from the 160th Judicial District Court Dallas County,
Texas Trial Court Cause No. DC-15-06938
Justices Bridges, Fillmore, and Stoddart
L. BRIDGES JUSTICE .
appeal involves appellant Joseph Abuzaid's alleged
fraudulent filing of UCC Financing Statements. Appellees
Anani, LLC and Big D Concrete, Inc. challenged the financing
statements as fraudulent liens and sought partial summary
judgment. Appellees Muamar and Hanadi Anani subsequently
intervened and filed a separate summary judgment motion
challenging the fraudulent liens Abuzaid had filed against
them. The trial court granted appellees' motions and
signed a final judgment awarding appellees actual and
exemplary damages and terminating the liens. Abuzaid later
filed a motion for new trial in which he argued he did not
receive notice of the final summary judgment hearing. The
trial court denied the motion.
appeal, Abuzaid argues the trial court abused its discretion
by denying his motion for new trial because he satisfied the
Craddock requirements. He further claims the trial
court erred by granting summary judgment because he presented
evidence negating at least one element of appellees'
claims, and no evidence supports the exemplary damages
awards. We vacate the trial court's award of exemplary
damages as to Big D and Anani, LLC, and in all other
respects, affirm the trial court's judgment.
April 6, 2015, Abuzaid filed a UCC Financing Statement
asserting a perfected security interest or lien against Big D
in the amount of $10, 000, 000 on "all assets owned by
Big D Concrete LLC [sic] without any exceptions." On the
same day, Abuzaid filed an identical financing statement
against Anani, LLC. He also filed a UCC financing statement
asserting a perfected security lien against Muamar and Hanadi
18, 2015, Big D and Anani, LLC filed suit against Abuzaid
alleging he fraudulently filed both UCC Financing Statements
in violation of civil practice and remedies code section
12.002(a)(1) and business and commerce code section 9.5185.
See Tex. Civ. Prac. & Rem. Code Ann. §
12.002 (West 2017) & Tex. Bus. & Comm. Code Ann.
§ 9.5185 (West 2011). Big D and Anani, LLC sought
attorney's fees and exemplary damages pursuant to section
12.002(b)(4) of the civil practice and remedies code. Abuzaid
filed a pro se original answer and general denial.
LLC and Big D filed a motion for partial traditional summary
judgment on September 8, 2015 in which they argued
Abuzaid's lien filings were premised upon "nothing
more than mere allegations asserted by Defendant against
Plaintiffs in a separate lawsuit which is still pending in
Dallas County and has not been reduced to judgment."
Thus, there was no security interest upon which the UCC
filing could be predicated. Anani, LLC and Big D further
argued they never executed a security agreement authorizing a
security interest in specified collateral as required by
statute. They alleged, without an executed security
agreement, any financing statement filed with the Secretary
of State was based on a groundless and ineffective lien.
filed an emergency motion for continuance of the partial
summary judgment hearing until he could hire counsel, which
the trial court denied. The trial court subsequently granted
Big D and Anani, LLC's motion for partial traditional
summary judgment on November 19, 2015.
the trial court granted the motion for partial traditional
summary judgment, Muamar and Hanadi Anani filed their
original petition in intervention alleging the UCC filing
against them was similarly fraudulent. They also sought
attorney's fees and exemplary damages pursuant to section
12.002(b)(4) of the civil practice and remedies code. The
Ananis then filed a motion for traditional summary judgment
challenging the validity of the financing statement because,
like Big D and Anani, LLC, they never executed a security
agreement. The trial court granted their traditional motion
for summary judgment.
February 16, 2016, the trial court held a hearing on Big D
and Anani, LLC's motion for final summary judgment. On
February 29, 2016, the trial court signed a final order in
which it reiterated the UCC Financing Statements were
"immediately ordered TERMINATED and
EXPUNGED from record" and awarded $15,
000 in statutory damages and $50, 000 in exemplary damages to
all four parties. It also awarded reasonable attorney's
filed a motion for new trial challenging only exemplary
damages on March 11, 2016. He claimed he had "every intention
of defending the claims raised at the summary judgment
hearing on February 16, 2016, " but computer issues
prevented him from seeing the hearing notice. His failure to
appear was due to "his mistake and inadvertence."
He blamed an incompatible update on his email server for the
disruption in his email service, which delayed delivery of
some email and sent others to his junk mail folder. However,
he admitted he learned about the February 16, 2016 hearing
when he received an email from the court on February 17,
2016, with the proposed order granting the final motion for
summary judgment. Thus, it is undisputed Abuzaid learned
about the hearing prior to the trial court signing the final
judgment on February 29, 2016.
trial court denied Abuzaid's motion for new trial after a
hearing. This appeal followed.
for New Trial and the Application of
first issue, Abuzaid argues the trial court abused its
discretion by denying his motion for new trial because he
satisfied the Craddock elements. Appellees respond
Craddock does not apply to these facts, or
alternatively, Abuzaid failed to satisfy all three elements
entitling him to a new trial.
review a trial court's ruling on a motion for new trial
under an abuse of discretion standard. Dolgencorp of
Tex., Inc. v. Lerma, 288 S.W.3d 922, 926 (Tex. 2009)
(per curiam). A trial court abuses its discretion when it
acts in an unreasonable or arbitrary manner or without
reference to any guiding rules and principles. K-Mart
Corp. v. Honeycutt, 24 S.W.3d 357, 360 (Tex. 2000) (per
Craddock, a movant for new trial must (1) establish
that the failure to answer was not intentional or due to
conscious indifference, but rather, was due to mistake or an
accident, (2) set up a meritorious defense, and (3)
demonstrate that the granting of a new trial will not cause
delay or otherwise injure the plaintiff. Craddock v.
Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex.
Carpenter v. Cimarron Hydrocarbons Corp., 98 S.W.3d
682, 686 (Tex. 2002), the Texas Supreme Court held that, in a
summary judgment default situation where the defaulting party
failed to file a timely response but had time prior to entry
of the summary judgment to obtain leave to file an untimely
response or to obtain a continuance, Craddock did
not apply. In such situations, the court considers whether a
party who files a motion for leave to file a late summary
judgment response establishes "good cause" by
showing that the failure to timely respond (1) was not
intentional or the result of conscious indifference, but the
result of accident or mistake, and (2) allowing a late
response will not cause any undue delay or otherwise injure
the other party. Id. at 688. However, the court in
Carpenter did not "decide ...