Opinion issued April 10, 2008
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In The
Court of Appeals
For The
First District of Texas
NO. 01-06-00607-CV
ADVANCED MODULAR POWER SYSTEMS, INC. D/B/A A.M.P.S. AND GARY MCCANN, Appellants
V.
E-ONE NEW YORK, INC., FIRE APPARATUS SPECIALISTS, AND CHRIS PEDDE, Appellees
On Appeal from the 281st District Court
Harris County, Texas
Trial Court Cause No. 2004-09492
MEMORANDUM OPINION
Appellants, Advanced Modular Power Systems, Inc. d/b/a/ A.M.P.S. and Gary McCann (collectively, AAMPS@), challenge the trial court=s grant of summary judgment in favor of appellees, E-One New York, Inc., Fire Apparatus Specialists, and Chris Pedde (collectively, AE-One@). In two issues, AMPS argues that the trial court erred in granting summary judgment in favor of E-One and in denying AMPS leave to file its First Amended Original Petition.
We affirm.
Background
AMPS=s original petition, filed February 23, 2004, alleged causes of action for business disparagement, violations of the Texas Deceptive Trade Practices Act (ADTPA@)[1], negligence, and gross negligence. AMPS alleged that it suffered damages due to E-One=s publication of statements that AMPS=s products were of poor quality and that AMPS did not honor its warranties. E-One filed a general denial and asserted several affirmative defenses, including limitations and defect in the parties.
On July 1, 2005, E-One filed a no-evidence motion for summary judgment[2] which claimed that AMPS had no evidence to support any of its claims.[3] On the same day, E-One served AMPS with notice of a hearing on the summary judgment motion to be conducted on July 25, 2005. On July 25, 2005, the trial court ordered a continuance and reset the hearing. On August 15, 2005, E-One filed a traditional motion for summary judgment under Texas Rule of Civil Procedure 166a(c).[4] Over the coming months, several more settings for a summary judgment hearing were delayed and reset.
On September 15, 2005, AMPS substituted new counsel at a status conference, and AMPS=s new counsel was given an opportunity to conduct limited discovery. In February 2006, the parties entered into a Rule 11[5] agreement to reset the hearing to March 27, 2006 to allow AMPS to take the deposition of a representative of E-One, Inc. of Ocala, Florida (AE-One of Ocala@), provided that AMPS=s response to the motions for summary judgment would be served on E-One=s counsel by March 13, 2006. AMPS presented E-One=s counsel with a limited response to the motions on March 20, 2006, which addressed only the issues of capacity and the existence of a defamatory statement. AMPS=s limited response was filed with the trial court on March 23, 2006. Also on March 23, 2006, AMPS attempted to amend its original petition to add E-One of Ocala as a defendant.
The hearing on E-One=s summary judgment motions was held March 27, 2006. On March 29, 2006, the trial court granted E-One=s motion for final summary judgment, denied AMPS leave to file amended pleadings, and dismissed the case.
Jurisdiction
Preliminarily, we address E-One=s argument that this court does not have jurisdiction to hear this appeal because AMPS did not file a timely notice of appeal. The trial court=s final order on the motions for summary judgment was signed on March 29, 2006. The deadline for AMPS to file its motion for new trial was, therefore, April 28, 2006. See Tex. R. Civ. P. 329b(a). AMPS=s supplemental briefing indicates that AMPS mailed its motion for new trial by first class mail on April 28, 2006. The motion was received by the trial court and file stamped on May 1, 2006. Rule 5 of the Texas Rules of Civil Procedure allows, AIf any document is sent to the proper clerk by first-class United States mail in an envelope or wrapper properly addressed and stamped and is deposited in the mail on or before the last day for filing same, the same, if received by the clerk not more than ten days tardily, shall be filed by the clerk and be deemed filed in time.@ Tex. R. Civ. P. 5. AMPS has met these requirements. Therefore, the deadline for filing its notice of appeal was extended to June 27, 2006. See Tex. R. App. P. 26.1(a)(1). AMPS=s notice of appeal was filed on June 27, 2006, giving this Court jurisdiction to hear its appeal.
Summary Judgment
Standard of Review
We review de novo the trial court=s grant of summary judgment. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). We must make inferences, resolve doubts, and view the evidence in the light most favorable to the non-movant. Rhône-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999). E-One filed both a traditional motion for summary judgment and a no-evidence motion for summary judgment. See Tex. R. Civ. P. 166a(c), (i). We focus first on the no-evidence motion.
A no-evidence summary judgment motion asserts that no evidence exists as to at least one essential element of the non-movant=s claims on which the non-movant would have the burden of proof at trial. Bendigo v. City of Houston, 178 S.W.3d 112, 114 (Tex. App.CHouston [1st Dist.] 2005, no pet.) (citing Jackson v. Fiesta Mart, Inc., 979 S.W.2d 68, 70B71 (Tex. App.CAustin 1998, no pet.)). The trial court must grant the motion unless the non-movant produces summary judgment evidence that raises a genuine issue of material fact. Tex. R. Civ. P. 166a(i); Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). We must ascertain whether the non-movant produced more than a scintilla of probative evidence to raise a genuine issue of material fact. Bendigo, 178 S.W.3d at 114. When, as here, a trial court=s order granting summary judgment does not specify the grounds relied upon, we affirm the summary judgment if any of the summary judgment grounds is meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872B73 (Tex. 2000). An appellant must negate all possible grounds. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995); Ellis v. Precision Engine Rebuilders, Inc., 68 S.W.3d 894, 898 (Tex. App.CHouston [1st Dist.] 2002, no pet.). If the appellant fails to negate each possible ground upon which the judgment may have been granted, an appellate court must uphold the summary judgment. See Ellis, 68 S.W.3d at 898.
Notice and Opportunity for Discovery
In its first issue, AMPS argues that the trial court=s summary judgment in favor of E-One was erroneous. Regarding the no-evidence motion, AMPS specifically argues that it did not have adequate time to develop its discovery and that it did not receive proper notice of the hearing or of the need for a response to E-One=s no-evidence summary judgment motion. AMPS also argues that the trial court could only have considered the motion for no-evidence summary judgment on the issues of capacity and whether or not there had been a defamatory statement.
A no-evidence motion for summary judgment is proper when there has been adequate time for discovery. Tex. R. Civ. P. 166a(i). To determine whether adequate time for discovery has elapsed, we examine such factors as: (1) the nature of the case; (2) the nature of the evidence necessary to controvert the no-evidence motion; (3) the length of time the case was active; (4) the amount of time the no-evidence motion was on file; (5) whether the movant had requested stricter deadlines for discovery; (6) the amount of discovery already completed; and (7) whether the discovery deadlines in place were specific or vague. Brewer & Pritchard, P.C. v. Johnson, 167 S.W.3d 460, 467 (Tex. App.CHouston [14th Dist.] 2005, pet. denied). We review a trial court=s determination of whether an adequate time for discovery has passed under an abuse of discretion standard. Id.
Here, the no-evidence motion for summary judgment was filed on July 1, 2005, more than 16 months after AMPS filed its original petition. The no-evidence motion for summary judgment was properly before the trial court because the time for discovery had ended before it was filed. Furthermore, the trial court extended the discovery period on at least one occasion, and the parties both agreed that there was a clear docket control order in place. The hearing on the motion did not occur until March 27, 2006, more than two years after AMPS filed its original petition. Nothing in the nature of the case or in the evidence indicates AMPS needed more time than it had already been given to conduct discovery. We conclude that there was reasonable time for discovery, and that the trial court did not abuse its discretion in considering the no-evidence motion for summary judgment. See Brewer & Pritchard, 167 S.W.3d at 467.
Furthermore, AMPS had proper notice both of the need to file a response to E-One=s no-evidence motion and of the hearing. A party is required to file the motion and supporting affidavits at least 21 days before the time specified for the hearing. Tex. R. Civ. P. 166a(c); see also Tex. R. Civ. P. 166a(i) cmt. (AThe existing rules continue to govern the general requirements of summary judgment practice.@). The purpose of this rule is to give the non-movant a full opportunity to respond on the merits. Stephens v. Turtle Creek Apartments, Ltd., 875 S.W.2d 25, 26 (Tex. App.CHouston [14th Dist.] 1994, no writ). Here, E-One filed its no-evidence motion for summary judgment on July 1, 2005, and it served AMPS notice of the hearing to occur on July 25, 2005, which was more than 21 days later. AMPS failed to file any response. The record reflects that the trial court reset the hearing a number of times and that the hearing did not actually occur until March 27, 2006. Therefore, AMPS received more than the required 21 days notice. See Tex. R. Civ. P. 166a(c); see also Skelton v. Comm=n for Lawyer Discipline, 56 S.W.3d 687, 691 (Tex. App.CHouston [14th Dist.] 2001, no pet.) (holding that notice was reasonable when reset of hearing allowed party even more time to respond than was required by Rule 166a(c)).
It is a well established principle of law that once a no-evidence motion for summary judgment is filed, the burden shifts to the non-movant to produce evidence that raises a genuine issue of material fact as to each challenged element of its claims; when no evidence raising a genuine issue of material fact is produced in response, A[t]he court must grant the motion.@ Tex. R. Civ. P. 166a(i); see, e.g., Kalyanaram v. Burck, 225 S.W.3d 291, 301 (Tex. App.CEl Paso 2006, no pet.); Thomann v. Lakes Reg=l MHMR Ctr., 162 S.W.3d 788, 795 (Tex. App.CDallas 2005, no pet.); Roventini v. Ocular Sciences, Inc., 111 S.W.3d 719, 723 (Tex. App.CHouston [1st Dist.] 2003, no pet.). Because of the very nature of a no-evidence motion for summary judgment and the well-settled law in this area, AMPS cannot claim in good faith that it had no knowledge of the need to file a timely response to E-One=s motion.
Lack of Timely Response to Motions for Summary Judgment
AMPS filed an untimely response to E-One=s motions for summary judgment on March 23, 2006. In its reply to AMPS=s response, E-One contended that AMPS=s untimely, limited response was not properly before the trial court for its consideration in making its ruling on the motions for summary judgment.
AMPS=s response was untimely under the provisions of its Rule 11 agreement with E-One, which required the response to be served on E-One by March 13, 2006. E-One was not given the response until March 20, 2006. AMPS=s response was also untimely under the provisions of Texas Rule of Civil Procedure 166a(c). Tex. R. Civ. P. 166a(c) (AExcept on leave of court, the adverse party, not later than seven days prior to the day of hearing may file and serve opposing affidavits or other written response.@). Because the hearing was set for March 27, 2006, AMPS=s response needed to be filed by March 20, 2006, but it was not filed until March 23, 2006, only four days before the re-scheduled date of the hearing. Evidence filed after the deadline for response may be considered on appeal only if there is some indication that the trial court allowed the late filing and considered the evidence. See Benchmark Bank v. Crowder, 919 S.W.2d 657, 663 (Tex. 1996).
Here, the record reflects that the trial court did not allow or consider the late filing because the final order specifically states, AAfter considering Defendants= . . . motion for summary judgment, the timely filed pleadings, the timely filed response (if any), the timely filed affidavits, and any admissible evidence on file, the court GRANTS Defendants= motion for final summary judgment.@ Because AMPS did not file a timely response, we do not consider AMPS=s response for the purposes of this appeal. See id.
E-One=s No-Evidence Motion for Summary Judgment
In its briefing regarding its no-evidence motion for summary judgment, E-One contends that regardless of whether we consider AMPS=s untimely filed response to E-One=s no-evidence motion for summary judgment, AMPS produced no evidence to support its claims of business disparagement, violations of the DTPA, negligence, or gross negligence.
(1) Business Disparagement
To prevail on a business disparagement claim, a plaintiff must establish that (1) the defendant published false and disparaging information about it, (2) with malice, (3) without privilege, (4) that resulted in special damages to the plaintiff. Forbes, Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 170 (Tex. 2003) (citing Hurlbut v. Gulf Atl. Life Ins. Co., 749 S.W.2d 762, 766 (Tex.1987)). The false statement of fact must be published to a third party. Astoria Indus. of Iowa, Inc. v. SNF, Inc., 223 S.W.3d 616, 624 (Tex. App.CFort Worth 2007, pet. denied). To prove malice, the plaintiff must prove that the defendant knew of the falsity of its publication or acted with careless disregard concerning it, or it acted with ill will or intended to interfere in the economic interests of the plaintiff in an unprivileged fashion. Forbes, 124 S.W.3d at 170 (quoting Hurlbut, 749 S.W.2d at 766.). To prove special damages, the plaintiff must prove that the disparaging communication played a substantial part in inducing third parties not to deal with the plaintiff, resulting in a direct pecuniary loss that has been realized or liquidated, such as specific lost sales, loss of trade, or loss of other dealings. Astoria Indus., 223 S.W.3d at 628 (citing Hurlbut, 749 S.W.2d at 767).
With or without its untimely filed response to E-One=s no-evidence motion for summary judgment, AMPS did not provide any evidence that E-One was responsible for publishing disparaging statements about AMPS, that any false statements were made, that E-One lacked privilege, or that AMPS suffered special damages. AMPS=s limited response to E-One=s motions for summary judgment did not address the issues of malice or privilege. Because AMPS failed to provide evidence of each essential element of its business disparagement claim against E-One, the trial court correctly granted E-One=s summary judgment motion on AMPS=s business disparagement claim.[6] See Bendigo, 178 S.W.3d at 114.
(2) DTPA Violations, Negligence, and Gross Negligence
AMPS failed to address any of the elements of its DTPA, negligence, and gross negligence claims in its untimely response to E-One=s no-evidence motion for summary judgment. Because AMPS did not produce any evidence in support of these claims, the trial court correctly dismissed these claims. See Bendigo, 178 S.W.3d at 114; see also Roventini, 111 S.W.3d at 724 (A[T]he Roventinis filed no response to the [no-evidence summary judgment] motions, despite service and notice of hearing concerning the motions. Based on this record, the express provisions of Rule 166a(i) required that the trial court grant the no-evidence motions and render judgment in favor of the [movants].@).
We overrule AMPS=s first issue.[7]
Denial of Leave to File AMPS=s First Amended Original Petition
In its second issue, AMPS argues that the trial court erred in denying it leave to amend its original petition. We review the trial court=s denial of AMPS=s motion for leave to amend its original petition for an abuse of discretion. Tex-Air Helicopters, Inc, v. Galveston County Appraisal Review Bd., 76 S.W.3d 575, 581 (Tex. App.CHouston [14th Dist.] 2002, pet. denied). An abuse of discretion occurs when the trial court acts in an unreasonable and arbitrary manner, or when it acts without reference to any guiding rules or principles. Walker v. Gutierrez, 111 S.W.3d 56, 62 (Tex. 2003).
AMPS argues that because the amended petition was properly mailed on March 23, 2006, it was timely filed, even without leave of court. However, Texas Rule of Civil Procedure 63 provides:
Parties may amend their pleadings . . . by filing such pleas with the clerk at such time as not to operate as a surprise to the opposite party; provided, that any pleadings, responses or pleas offered for filing within seven days of the date of trial or thereafter, or after such time as may be ordered by the judge under Rule 166, shall be filed only after leave of the judge is obtained, which leave shall be granted by the judge unless there is a showing that such filing will operate as a surprise to the opposite party.[8]
Tex. R. Civ. P. 63.
Here, AMPS claims its amended petition was mailed March 23, 2006, only four days before the summary judgment hearing was set to occur. The trial court could have concluded that a petition adding a new party four days before a summary judgment hearing that had been delayed for almost a year could operate as a surprise to E-One. See Tex. R. Civ. P. 63. We conclude that the trial court did not abuse its discretion by refusing to grant AMPS leave to file an amended petition. See Walker, 111 S.W.3d at 62; Tex-Air Helicopters, 76 S.W.3d at 581.
We overrule AMPS=s second issue.
Conclusion
We affirm the judgment of the trial court. All pending motions are overruled as moot.
Evelyn V. Keyes
Justice
Panel consists of Justices Nuchia, Jennings, and Keyes.
[1] See Tex. Bus. Com. Code Ann. '' 17.01B17.904 (Vernon 2002 & Supp. 2007).
[2] See Tex. R. Civ. P. 166a(i).
[3] According to E-One=s brief and the docket control order attached to AMPS=s brief, discovery was to end on July 1, 2005. The docket control order is not included in the appellate record itself. The trial court did, however, refer to the existence of the court=s scheduling orders in the final order on the motion for summary judgment, and the terms of the docket control order are not directly disputed by the parties.
[4] See Tex. R. Civ. P. 166a(c).
[5] See Tex. R. Civ. P. 11.
[6] In its untimely response, AMPS did supply the affidavit of one employee, Gene AEddie@ Inman, who stated that he saw a flyer he claims was sent by E-One to one of its distributors. Inman states, AI recall the flyer said something about E-One would no longer do business with AMPS because AMPS didn=t honor its warranties or didn=t stand behind their products. I also recall the flyer had language which inferred that AMPS put out an inferior product.@ Inman stated that any allegations that AMPS did not honor its warranties or had other quality problems were untrue. He also stated that AMPS=s business decreased dramatically after the flyer was sent by E-One, and he mentioned another anecdotal instance of a customer being denied the ability to purchase AMPS products by E-One=s distributors. No other evidence was offered. This testimony still does not establish that the flyer was sent by any of the defendants to third parties, that the information in the flyer constituted false statements of fact, or that it was the cause of any alleged decrease in business, which are also essential elements of a business disparagement claim. See Forbes, Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 170 (Tex. 2003).
[7] AMPS also argues as a subpart of its first issue that the trial court erred in granting E-One=s motion for summary judgment under Texas Rule of Civil Procedure 166a(c). Because we hold that dismissal of the case was proper under Rule 166a(i), we do not need to address AMPS=s arguments under Rule 166a(c). AMPS failed to negate a possible ground upon which summary judgment could have been granted; therefore, we must uphold the judgment of the trial court. See Ellis v. Precision Engine Rebuilders, Inc., 68 S.W.3d 894, 898 (Tex. App.CHouston [1st Dist.] 2002, no pet.).
[8] Rule 63 also indicates that parties must follow court scheduling orders. The court=s scheduling order is mentioned in the final order on E-One=s motion for summary judgment (handwritten in by the trial court), and it is included in the appendix of AMPS=s brief, although it is not included in the official clerk=s record. The docket control order lists July 1, 2005 as the day by which all amendments and supplements were required to have been filed.