Motion for Rehearing Granted; Affirmed in Part; Reversed and Rendered in Part. Memorandum Opinion of March 24, 2005 Withdrawn, and Majority and Dissenting Opinions on Rehearing filed October 5, 2006.
In The
Fourteenth Court of Appeals
____________
NO. 14-03-00103-CV
____________
W & F TRANSPORTATION, INC., E.H. WILHELM, SR.,
AND MARGARET WILHELM, Appellants
V.
CINDY AND RICKY WILHELM, Appellees
On Appeal from the County Civil Court at Law Number 1
Harris County, Texas
Trial Court Cause No. 750,292
D I S S E N T I N G O P I N I O N O N R E H E A R I N G
What happens when the parties agree not to record some of the proceedings at trial and then the losing party seeks to reverse the trial court=s judgment based on issues that relate to the unrecorded portion? The answer to this question determines the outcome of this case. In analyzing this issue, the court misstates and misapplies the general common-law rule governing the consideration and treatment of an appellate record that lacks portions of the trial proceedings. Furthermore, the court improperly infers an agreement by the parties that a record of closing arguments is not a necessary part of the appellate record.
The court makes three additional errors in analyzing the liability of E.H and Margaret Wilhelm (hereinafter the AIndividual Defendants@). Specifically, the court erroneously (1) concludes the Individual Defendants denied they were doing business as AW&F Transportation@ by means of their verified denial of liability in the capacity in which they were sued, (2) states the trial court=s judgment against the Individual Defendants should be reversed because AW&F Transportation,@ as used in the jury charge, could not have included them, and (3) fails to try to interpret jury findings to uphold the judgment after stating that this court must do so.
The court correctly concludes that issues seven, eight, and ten should be overruled; however, because the court sustains the third issue and part of the fourth issue and does not affirm the trial court=s judgment in its entirety, I respectfully dissent.
What is the effect of the parties= agreement not to have a record made of the proceedings during closing arguments?
Just before closing arguments were to begin during the trial of this case, the parties= counsel agreed to release the court reporter, with the result that no record would be made of the proceedings during closing arguments. The main issue in this case is the effect of this agreement on the losing parties= appeal from the trial court=s adverse judgment on a unanimous jury verdict and their challenge of the trial court=s denial of their motion for judgment notwithstanding the verdict. As explained below, under the applicable common-law rule, omitted portions of an incomplete trial record are presumed to be relevant to the appellate issues and to support the trial court=s judgment, unless this presumption is reversed by an exception to this rule, for example by the application of Texas Rule of Appellate Procedure 34.6(c), governing appeals on partial reporter=s records.[1] Appellants W&F Transportation, Inc., E.H. Wilhelm, Sr., and Margaret Wilhelm (hereinafter collectively the AW&F Parties@) have not invoked or asserted any exception to the general rule. The majority errs in creating an exception for unrecorded closing arguments.
The parties trying a case, upon request, have a right to have a full record made of the trial proceedings. See Tex. Gov=t Code Ann. ' 52.046 (Vernon 2005) (requiring official court reporter to record proceedings if requested to do so); Tex. R. App. P. 13.1(a) (stating that official court reporter must attend court sessions and make a full record of the proceedings, unless excused by agreement of the parties); Nabelek v. Dist. Attorney of Harris Co., CS.W.3dC,C, No. 14-03-00965-CV, 2005 WL 2148999, at *5 (Tex. App.CHouston [14th Dist.] Sept. 8, 2005, no pet. h.) (indicating that Rule 13.1(a) is void because it conflicts with section 52.046 of the Texas Government Code). They are also free to agree that all or part of the trial proceedings should not be recorded.[2] The Texas Rules of Appellate Procedure do not directly address the effect of such an agreement. However, a fundamental necessity for appellate review of trial proceedings is the ability to obtain a record of what occurred in the trial court. Absent the ability to review a complete trial record, appellate courts run the risk of undoing valid and proper decisions of juries and trial courts because of the reviewing court=s ignorance of what occurred during the unrecorded parts of the trial. To avoid this pitfall, appellate courts have established a common-law rule that the omitted portions of an incomplete trial record are presumed to be relevant to the appellate issues and to support the trial court=s judgment, absent application of an appellate rule that would reverse this presumption. See Christiansen v. Prezelski, 782 S.W.2d 842, 843 (Tex. 1990) (stating that A[a] reviewing court must examine the entire record in a case in order to determine whether an error was [reversible error]@ and that if the predecessor rule to current Rule 34.6(c) does not apply, then Ait will be presumed that the omitted portions [of the record] are relevant to the disposition of the appeal@); Middleton v. Nat=l Fam. Care Life Ins. Co., No. 14-04-00428-CV, 2006 WL 89503, at *2 (Tex. App.CHouston [14th Dist.] Jan. 17, 2006, pet. filed) (stating that there was no reporter=s record of the trial and holding that, because appellant did not comply with Rule 34.6(c) and the appellate record did not contain a complete record of the trial, this court would presume the omitted portions are relevant to the disposition of this appeal and support the trial court=s judgment) (mem. op.); Patel v. State, No. 14-03-01082-CR, 2003 WL 22976186, at *1 (Tex. App.CHouston [14th Dist.] Dec. 18, 2003, no pet.) (affirming trial court=s judgment and holding that this court could not determine whether the trial court erred because this court lacked a Acomplete record@ due to the court reporter=s failure to make a record of the trial proceedings) (not designated for publication); Robertson v. Tex. Dep=t of Transp., No. 03-00-00167-CV, 2000 WL 1228025, at *1B2 (Tex. App.CAustin Aug. 31, 2000, no pet.) (holding that, in case in which parties agreed that no record would be made of the proceedings during one day of a bench trial, appellate court did not have a complete record due to the absence of a record from that day and that, absent an agreed record or compliance with Rule 34.6(c), appellate court will presume the omitted portions of the record support the trial court=s judgment) (not designated for publication).
The W&F Parties have not sought to appeal under Rule 34.6(c). They do not claim to have appealed under this rule, and they have not taken any of the steps to invoke this rule. See Tex. R. App. P. 34.6(c). The majority agrees that this is not a Rule 34.6(c) case and further concludes that, even if the W&F Parties had sought to invoke Rule 34.6(c), this rule does not apply to situations in which part or all of the proceedings are not recorded in the trial court. Although this court need not address this issue, even presuming that Rule 34.6(c) does not apply in such cases, the inapplicability of this rule would not change the general rule that the omitted portions of an incomplete trial record are presumed to be relevant to the appellate issues and to support the trial court=s judgment, absent application of an appellate rule that would reverse this presumption. See Middleton, 2006 WL 89503, at *2; Patel, 2003 WL 22976186, at *1.
The majority concludes that the parties= agreement to dismiss the court reporter implies an agreement that no record of the closing arguments was needed. See ante at p. 6. However, the subject matter of the parties= agreement was that the court reporter could be released. Nothing in the record reflects the parties= reasons, if any, for this agreement. Though this agreement implies that no record would be made of the proceedings during closing arguments, it is not reasonable to infer from this exchange an additional agreement that no record of the closing arguments was needed, particularly when such an inference contravenes the common-law presumption of relevance. If the majority=s analysis were correct, then in both civil and criminal cases, parties could agree to forego recording part, or indeed all, of the trial and then still insist that appellate courts review their various appellate issues seeking to overturn the jury=s findings or the trial court=s rulings. This is not the law. See Middleton, 2006 WL 89503, at *2; Patel, 2003 WL 22976186, at *1.
Even more troubling is the court=s willingness to infer an agreement not stated in the record. Courts should enforce agreements parties actually express and not undertake to find agreements that are not made manifest. Agreements parties make in the course of litigation usually have risks and consequences, and the decision to forego a court reporter for a portion of the trial is no exception. The consequences of the parties= agreement were foreseeableCeven if unforeseen. The court=s role on appeal is a neutral oneCto hold the parties to the agreement they made, not to save parties from the consequences of their stated agreement by inferring an agreement that the parties did not express. This court should hold the parties to their agreement as stated on the record. Any other course will only create uncertainty and unfairness.
Although there are not many cases dealing with appellants who allowed a record not to be made of part of the trial and then sought to reverse the trial court=s judgment, this deficit is likely attributable to the rarity of appellants choosing this unusual and risky course. It is a fundamental part of our system that appellate courts have the means to learn what happened during the trial whose result they are asked to overturn. Truth can be stranger than fiction, and to reverse a trial court=s judgment based on a unanimous jury verdict without knowing what transpired during part of the trial would result in a waste of resources and the all-to-real potential for an unjust reversal of the trial court=s judgment contrary to the truth. AImperfect as it may be, our legal system attempts to ascertain facts to arrive at the truth.@ Kramer v. Lewisville Mem=l Hosp., 858 S.W.2d 397, 405 (Tex. 1993) (quotations omitted). To dispense with the requirement that appellate courts have access to a record of what occurred during trial would be to abandon the truth-seeking function of the law. See id.
For example, in the case at hand, the court reverses as to the Individual Defendants based on the majority=s conclusion that the undefined term AW&F Transportation,@ used throughout the jury charge, must have meant only W&F Transportation, Inc. However, this court does not know what transpired during closing arguments. In his closing argument, counsel for Cindy and Ricky Wilhelm (hereinafter ACindy and Ricky@) may have told the jury that AW&F Transportation@ meant all three defendants. Counsel for the W&F Parties may have agreed with Cindy and Ricky on this point, told the jury that AW&F Transportation@ meant all three defendants, and then argued the jury should find no liability because there was no evidence of any actionable conduct by Margaret Wilhelm. If this were so, then this court=s reversal would be erroneous based on the W&F Parties= inviting the error that they assert on appeal. See, e.g., Bass v. Walker, 99 S.W.3d 877, 889 (Tex. App.CHouston [14th Dist.] 2003, pet. denied) (holding appellants could not complain of alleged error by trial court in allowing inadequate settlement credit of $100,000 because appellants specifically had requested that the trial court apply a $100,000 settlement credit during closing arguments, thus inviting the alleged error). Another possibility is that, during the unrecorded proceedings and without objection, the trial court may have told the jury that AW&F Transportation@ meant all three defendants.
If either of these two scenarios occurred, then the jury properly found all three defendants liable, and the trial court properly denied the W&F Parties= motion for judgment notwithstanding the verdict, which was the sole means by which the Individual Defendants preserved the issues that the court today sustains. Because the W&F Parties have not reversed the general presumption that the omitted portions of the trial record are relevant and support the judgment, this court should presume that one of these two scenarios occurred, overrule the third and fourth issues, and affirm the trial court=s judgment in its entirety. See Christiansen, 782 S.W.2d at 843; Middleton, 2006 WL 89503, at *2; Patel, 2003 WL 22976186, at *1; Robertson, 2000 WL 1228025, at *1B2; see also Mason v. Our Lady Star of the Sea Catholic Church, 154 S.W.3d 816, 818 (Tex. App.CHouston [14th Dist.] 2005, no pet.) (stating that case involved partial record because it included closing arguments and charge conference but did not include the trial evidence and applying the common-law presumption that the omitted portions were relevant and supported the trial court=s judgment because appellant did not comply with Rule 34.6(c)); Hiroms v. Scheffey, 76 S.W.3d 486, 489 (Tex. App.CHouston [14th Dist.] 2002, no pet.) (holding, in absence of complete reporter=s record or compliance with Texas Rule of Appellate Procedure 34.6(c), that court of appeals could not reverse based on charge error, in part because court of appeals could not review the closing arguments); Gardner v. Baker & Botts, L.L.P., 6 S.W.3d 295, 296B98 (Tex. App.CHouston [1st Dist.] 1999, pet. denied) (holding that complete record of trial was not provided because record lacked voir dire, opening statements, closing arguments, and some testimony and holding that, because appellants did not comply with the predecessor rule to Rule 34.6(c), the court of appeals had to presume that the omitted portions supported the trial court=s judgment). Instead, the majority carves out a new exception to the common-law presumption for unrecorded closing arguments.
Although the majority sustains issue three and part of issue four, rather than issues one and two asserting charge error, the W&F Parties= arguments under all of these issues are substantially similar. The court also concludes that the Individual Defendants preserved error regarding the jury charge=s alleged defect in referring to an undefined AW&F Transportation.@ See ante at p. 17 n.12. In this context, it is worth noting that alleged charge error is one of several instances in which appellate courts need to review the closing arguments, even if no error is alleged to have occurred during the closing arguments. See, e.g., Timberwalk Apartments, Partners, Inc. v. Cain, 972 S.W.2d 749, 755B56 (Tex. 1998) (stating that, in conducting harm analysis as to charge error, court reviews the entire record, including closing arguments, and finding reversible error, in part, based on closing arguments). This court previously has applied the common-law presumption to an appellate issue asserting that the jury charge contained an erroneous definition (analogous to the Individual Defendants= third and fourth issues, which the court sustains), in part because the appellate record did not contain a record of the closing arguments that would be needed to evaluate this issue. See Hiroms, 76 S.W.3d at 489. There is no justification for the majority=s departure from this court=s reasoning in Hiroms.
The W&F Parties do not dispute that they elected to forego a court reporter during closing arguments, nor do they dispute that they failed to appeal under Rule 34.6(c). Rather, they assert that it is common for parties, for the sake of economy, to agree that no record be made of closing arguments. How often parties make such agreements at trial is subject to conjecture, but if they do so, it should not be to save money. The parties are not required to pay anything to have a record made of the entire trial, and the court reporter (or court recorder as the case may be) is required to make a such a record upon request.[3] See Tex. Gov=t Code Ann. ' 52.046; Tex. R. App. P. 13.1(a); Nabelek, 2005 WL 2148999, at *5. After trial, if a party files an appeal, that party ordinarily must pay to have the record transcribed. However, by following the procedures of Rule 34.6(c), a party appealing can save money by designating only the parts of the record that the party believes are relevant to the appellate issues. See Tex. R. App. P. 34.6(c); Williams v. Gage, No. 12-03-00023-CV, 2003 WL 22839260, at *1 (Tex. App.CTyler Nov. 26, 2003, no pet.) (stating, in memorandum opinion, that an appellant may use the Rule 34.6(c) procedure to minimize expense and delay in the appellate process). An appellant who sufficiently complies with Rule 34.6(c) avoids the legal presumption that the portions omitted from the record are relevant and support the judgment. Under this rule, other parties and the appellate court itself may arrange to have transcribed the parts of the record that the appellant did not request. See Tex. R. App. P. 34.6(c) & (d). On the other hand, neither an appellate court nor an appellee can have portions of the trial record transcribed if the parties agreed that no record of these portions would be made in the first place. Parties are free to economize by using the Rule 34.6(c) procedure, but agreeing to have no record made at all saves the parties no money, and, unlike consequences flowing from the operation of Rule 34.6(c), it prejudices the appellate court=s ability to seek the truth and determine what happened at trial. If the parties decide, for whatever reason, that, come what may, they will not appeal the trial court=s judgment, then they might reasonably decide not to have the trial recorded. Indeed, parties in arbitration often do not record the arbitration proceedings, and this decision makes sense given the arbitrating parties= inability to obtain any kind of traditional appellate review of arbitration rulings. However, if a party to a case in the court system wants to preserve its rights to full appellate review, then it should be sure to request that a record be made of the entire trial. See Christiansen, 782 S.W.2d at 843; Middleton, 2006 WL 89503, at *2; Mason, 154 S.W.3d at 818; Patel, 2003 WL 22976186, at *1; Robertson, 2000 WL 1228025, at *1B2. If parties wish to minimize costs on appeal, they are free to use the procedures of Rule 34.6(c).[4] However, when the parties agree that no record is to be made at all during all or part of a trial, they avoid no costs to themselves and they deprive the appellate courts and themselves of the ability to obtain a record of what transpired during the unrecorded portions of the trial proceedings.
Rather than requiring strict compliance with Rule 34.6(c), the Texas Supreme Court has adopted a flexible approach in certain cases in which a rigid application of Rule 34.6(c) would result in denying review on the merits, even though the appellee has not established any prejudice from a slight relaxation of the rule. See Bennett v. Cochran, 96 S.W.3d 227, 229 (Tex. 2002). This approach allows parties who have appealed on a partial reporter=s record to use Rule 34.6(c) to reverse the general presumption, even though they have not strictly complied with Rule 34.6(c), for example by timely serving the statement of appellate issues on the other parties, provided the other parties have not shown prejudice from this failure to strictly comply. See id. The majority asserts that creating an exception to the common-law presumption as to closing arguments is the only way to honor this approach as articulated by the Texas Supreme Court in Bennett. See ante at p. 8B9, 11 (citing Bennett, 96 S.W.3d at 229). However, the Bennett approach, by its own terms, has limits. See Bennett, 96 S.W.3d at 229 (noting limit to Bennett rationale); Mason, 154 S.W.3d at 819B20 (applying common-law presumption despite Bennett rationale). The better course would be to recognize the limits of this approach and leave the creation of new rules of law to the Texas Supreme Court.
Furthermore, whether by agreement or otherwise, the failure to record parts of the trial proceedings that could relate to alleged reversible error asserted on appeal does not fit within this flexible approach because this failure substantively interferes with the appellate court=s ability to properly review the merits. Moreover, all parties as well as the trial court and the jury are prejudiced when an appellate court reverses a judgment without having the ability to review a record of all the trial proceedings that could have affected the trial court=s rendition of the judgment being reversed. If no record is made of parts of the trial, the reviewing court faces a dilemma in trying to deal with the gaps in the record and resolve the appellate issues. Trial counsel=s perceptions of what occurred during trial may be influenced by conscious or unconscious bias. Counsel may have inaccurate memories regarding the details of what transpired during trials that may have occurred months or even years earlier. During an intense trial, counsel=s notes of what occurred may be incomplete, inaccurate, or just plain wrong due to other human error. Trial counsel may not focus on trial occurrences that relate to those appellate issues that only the opposing party plans to raise because counsel may not be aware of these issues until after trial. Trial counsel may not be available on appeal. All of these factors make it imprudent for appellate courts to rely upon the representations and recollections of trial counsel to cure gaps in the record of what transpired at trial. Furthermore, in this case, Cindy and Ricky have not conceded that what occurred during closing arguments is not relevant to the W&F Parties= appellate issues.
The merits of appellate points are not well served if an appellate court considers reversing a trial court=s judgment without knowing what transpired at trial. This point is illustrated by a relatively recent case from this court in which the appellants asserted on appeal that the trial court erred in applying an inadequate settlement credit; however, during closing argument at the bench trial, the appellants themselves had requested that the trial court apply the credit of which they complained on appeal. See Bass, 99 S.W.3d at 889. No party on appeal mentioned that appellants had made this request during closing argument, and if this court had not had a record of closing argument, it might have reversed the trial court for awarding exactly the settlement credit requested by the appellants.[5] See id. Such a ruling would not have served justice, and would not have credited the work of the trial court in resolving the case.[6]
In sum, the court errs in failing to follow the common-law presumption regarding incomplete records and in treating an agreement to make no record of part of the proceedings more favorably than a failure to either follow Rule 34.6(c) or request the reporter to transcribe the entire record of the trial proceedings.[7] However, as discussed above, the former situation is much more inimical to proper appellate review than the latter. Accordingly, this court should apply the dual presumption that the omitted portions of the trial record are (1) relevant to the appellate issues and (2) support the trial court=s judgment. In doing so, this court would reach the merits of the W&F Parties= issues; however, with relevant portions that support the judgment missing, the W&F Parties would have virtually no chance for success. That, however, is a foreseeable consequence of the W&F Parties= agreement that part of the trial not be recorded.
Does Michiana Easy Livin= Country v. Holten compel the creation of an exception to the common-law presumption?
The majority pronounces that Athis case is governed by@ the Texas Supreme Court=s recent decision in Michiana Easy Livin= Country v. Holten, which, the majority states, Acompels@ an exception to the common-law presumption for unrecorded closing arguments. See 168 S.W.3d 777, 781B84 (Tex. 2005) (holding that appellate court need not presume that special-appearance hearing was evidentiary when all parties conceded that it was not); ante at pp. 4, 11. The majority=s conclusion that Holten governs this case and is controlling is undermined by the language in Holten expressly limiting the analysis in that case to pretrial hearings. See Holten, 168 S.W.3d at 781B84 (stating A[i]t is difficult to state a bright‑line rule regarding unrecorded pretrial proceedings . . . the absence of a reporter=s record does not tell us whether a pretrial hearing was nonevidentiary, or evidentiary but not preserved . . . the trend has been away from full evidentiary hearings in open court for most pretrial matters . . . [p]resuming that most pretrial proceedings are evidentiary would . . . discourage this trend . . . otherwise, appellate courts should presume that pretrial hearings are nonevidentiary@ (emphasis added)). Although, by analogy, some parts of the Holten court=s analysis arguably may provide some support for the majority=s analysis, Holten is not on point and does not compel this court to create an exception to the common- law presumption for unrecorded closing arguments during trial. See id.
There are many reasons why Holten should not affect the analysis in this case. The Holten court held that it did not have to presume that the special-appearance hearing was evidentiary when all parties conceded that it was not. See Holten, 168 S.W.3d at 784. The case at hand does not involve the issue of whether a hearing was evidentiary; all parties agree that the hearing in question was the ultimate evidentiary hearingCthe trial. The Holten court mentioned a trend away from evidentiary hearings in open court for pretrial matters; however, there is obviously no trend away from evidentiary hearings in open court for cases that are called to trial. See id. at 782B83. Furthermore, unlike the parties in Holten, all of whom agreed as to the issue in that case (whether the pretrial hearing was evidentiary), Cindy and Ricky do not concede that what transpired during closing arguments is not relevant to the W&F Parties= appellate issues. See id. at 784.
In Holten, the Texas Supreme Court distinguished its statement in a prior case that a party who fails to request the reporter to record a pretrial hearing risks waiving any complaint. See id. at 783 (distinguishing Piotrowski v. Minns, 873 S.W.2d 368 (Tex. 1993)). The Holten court distinguished this case by pointing out that the parties in that case agreed that the hearing for which the record was lacking was evidentiary. See id. Likewise, Holten has no application to the case at hand because the hearing in questionCthe trialCwas an evidentiary hearing at which parties who fail to see that a record is made risk waiving complaints.
In deciding whether to presume that the unrecorded pretrial hearing was evidentiary, the Holten court found significance in the fact that the appellate rules formerly stated that the parties must request the court reporter to make a record; however, now Texas Rule of Appellate Procedure 13.1 states the court reporter must make a record unless excused by agreement of the parties. See Tex. R. App. P. 13.1; Holten, 168 S.W.3d at 783. The majority relies on this rule and this part of Holten in its analysis. See ante at pp. 5B6, 11B13. This reliance is at odds with the analysis of this court in Nabelek v. District Attorney of Harris County, in which this court indicated that Rule 13.1 is void because it conflicts with section 52.046 of the Texas Government Code, which requires court reporters to make a record of proceedings only when requested to do so. See Tex. Gov=t Code Ann. ' 52.046 (requiring official court reporter to make record of proceedings if requested to do so); Tex. R. App. P. 13.1(a) (stating that official court reporter must attend court sessions and make a full record of the proceedings, unless excused by agreement of the parties); Nabelek, CS.W.3d at C, 2005 WL 2148999, at *5 (indicating that Rule 13.1(a) is void because it conflicts with section 52.046 of the Texas Government Code); accord Langford v. State, 129 S.W.3d 138, 139 (Tex. App.CDallas 2003, no pet.) (agreeing with Polasek case that Rule 13.1 is void because it conflicts with section 52.046); Polasek v. State, 16 S.W.3d 82, 88B89 (Tex. App.CHouston [1st Dist.] 2000, pet. ref=d) (holding, in en banc opinion, that Rule 13.1 is void because it conflicts with section 52.046 and because delegation of rulemaking authority to courts does not authorize courts to promulgate rules that conflict with the substance of existing statutes); contra Smith v. State, 114 S.W.3d 66, 70 & n.1 (Tex. App.CEastland 2003, pet. ref=d) (concluding that Rule 13.1 is not void); Brosette v. State, 99 S.W.3d 277, 284B85 (Tex. App.CTexarkana 2003, pet. dism=d) (same); Tanguma v. State, 47 S.W.3d 663, 670B71 (Tex. App.CCorpus Christi 2001, pet. ref=d) (same), disapproved in part on other grounds by Valle v. State, 109 S.W.3d 500, 508B09 (Tex. Crim. App. 2003). The Holten court mentioned and relied on the change in the Texas Rules of Appellate Procedure reflected by Rule 13.1; however, the Holten court did not mention or address the conflict between this rule and section 52.046 of the Government Code. See Holten, 168 S.W.3d at 784. Nor did the Holten court mention or address the split among the courts of appeals as to whether Rule 13.1 is void, and, to date, the Texas Supreme Court has not resolved this issue. See id.
On the other hand, this court did address this issue in Nabelek, and its opinion in that case does not support the majority=s reliance today on Rule 13.1. In Nabelek, the appellant asserted that there was reversible error based on the court reporter=s failure to record a pretrial hearing, as required by Rule 13.1. See Nabelek, CS.W.3d at C, 2005 WL 2148999, at *5. The Nabelek court stated that, under Rule 33.1, parties generally have to preserve error regarding their appellate complaints by presenting them to the trial court and obtaining an adverse ruling. See id. The Nabelek court then stated as follows:
Likewise, Texas Government Code section 52.046, which sets forth the general powers and duties of court reporters, provides that a party must request a court reporter to make a record of proceedings. Tex. Gov=t Code Ann. ' 52.046(a)(2) (requiring court reporter to attend court and make a record A[o]n request@); see Polasek v. State, 16 S.W.3d 82, 88B89 (Tex. App.CHouston [1st Dist.] 2000, pet. ref=d) (holding rule 13.1(a) void and proper rule stated by Texas Government Code section 52.046(a)). Here, contrary to Nabelek=s assertions, the record does not show he requested that the court reporter record the September 13, 2002 hearing . . . By failing to request that the court reporter record the hearing or object to the reporter=s failure to record . . . Nabelek has failed to preserve these issues for review.
Id. (footnotes omitted). The Nabelek court stated that Rule 33.1 requires preservation of error as to appellate complaints and that, likewise, section 52.046 of the Texas Government Code requires parties who want a record made to request the court reporter to make one. But section 52.046 only requires this request if Rule 13.1 is void, as appellate courts in Houston and Dallas have held. See Langford, 129 S.W.3d at 139; Polasek, 16 S.W.3d at 88B89. If Rule 13.1 is valid, then no request for a court reporter would be necessary. Rather than give effect to Rule 13.1, the Nabelek court simply cited with approval the First Court of Appeals=s en banc holding in Polasek that Rule 13.1 is void. The Nabelek court emphasized that Nabelek did not request the court reporter to make a record and stated in passing that Nabelek also failed to object to the court reporter=s failure to make a record. However, if Rule 13.1 is valid rather than void, then all the Nabelek court had to do was note that no objection was made to the failure to record the pretrial hearing; there would have been no need to note section 52.046=s requirement that a record be requested or to cite with approval Polasek=s holding that Rule 13.1 is void. The Nabelek court based its conclusion that Nabelek failed to preserve error on his failure to request a record as required by section 52.046, thus indicating that Rule 13.1 is void. See Nabelek, CS.W.3d at C, 2005 WL 2148999, at *5.
The majority does not explain why this court is not following its own recent analysis in Nabelek. Instead, the majority erroneously concludes that the Nabelek court did not address the issue of whether Rule 13.1 is void. See ante at p. 12, n.9. As discussed above, the majority=s reading of Nabelek is incorrect. More critically, however, the majority does not say this court=s analysis in Nabelek is unworkable or badly reasoned, only that the decision in the case turned on preservation of error and not on the merits of the Rule 13.1 issue. Even were the majority correct in its assessment, that would hardly justify unexplained inconsistency in this court=s analysis and decisions.
Adhering to precedent fosters efficiency, fairness, and legitimacy. See Grapevine Excavation, Inc. v. Maryland Lloyds, 35 S.W.3d 1, 5 (Tex. 2000). More practically, it results in predictability in the law, which allows people to rationally order their conduct and affairs. See id. Of course, there are times when continued application of a rule of law no longer furthers the interests it once served and Athe general interest will suffer less by such departure, than from a strict adherence.@ See Lehmann v. Har‑Con Corp., 39 S.W.3d 191, 215 (Tex. 2001) (quoting Benavides v. Garcia, 290 S.W. 739, 740 (Tex. Comm=n App. 1927, judgm=t adopted). In those circumstances, courts may revisit a prior precedent, providing a higher authority has not spoken on the subject. Even then, courts should not lose sight of the strong policies supporting the doctrine of stare decisis. For this reason, we are to adhere to settled rules of law Aunless there exists the strongest reasons for chang[e].@ Benavides, 290 S.W. at 740B41. When a court contemplates departing from precedent, it should carefully balance the reasons proffered for rejecting the precedent against the very weighty considerations underlying stare decisis. The majority offers no such analysis today. Furthermore, even presuming for the sake of argument that Nabelek says nothing about the validity of Rule 13.1, today this court places importance on the change in the law created by the promulgation of Rule 13.1. Before doing so, the court ought to address why it believes the en banc First Court of Appeals and the Dallas Court of Appeals erred in holding that Rule 13.1 is void, and why this court erred in citing this line of cases with approval. See Nabelek, 2005 WL 2148999, at *5; Langford, 129 S.W.3d at 139; Polasek, 16 S.W.3d at 88B89. Because this court and others whose analysis this court has followed have indicated that Rule 13.1 is void, the majority errs in relying on Rule 13.1 to support its analysis. See ante at pp. 5B6, 11B13.
For all of these reasons, the Holten case is not on point and does not impact the analysis in this case. See id.
Did the Individual Defendants verify a denial that they were doing business as AW&F Transportation@?
The majority concludes that the Individual Defendants filed a verified denial of Cindy and Ricky=s allegation that the Individual Defendants were doing business as AW&F Transportation.@ The petition on which Cindy and Ricky went to trial alleged that the Individual Defendants were Aindividuals doing business as W&F TRANSPORTATION.@ Most of the allegations in the petition refer to all three defendants collectively. The Lease Agreement attached to the petition is on the letterhead of AW&F Transportation.@[8] This agreement describes the Lessee as AW&F Transportation,@ and E.H. Wilhelm=s signature is next to the words ASIGNATURE OF THE LESSEE.@ The clerk=s record contains the Individual Defendants= responses to requests for disclosure, in which they state that the names of the parties to the lawsuit are AW&F Transportation, Inc.[,] Elward & Margaret Wilhelm.@ In every pleading and motion filed by the Individual Defendants in our record, they describe the Individual Defendants as E.H. Wilhelm, Sr. and Margaret D. Wilhelm. The trial court=s judgment, the Individual Defendants= motion for judgment notwithstanding the verdict, and the notice of appeal all denominate the Individual Defendants in this manner as well.
Texas Rule of Civil Procedure 93 requires a verified denial of, among other things, the following matters:
2. That . . . the defendant is not liable in the capacity in which he is sued.
. . .
14. That a party plaintiff or defendant is not doing business under an assumed name or trade name as alleged.
Tex. R. Civ. P. 93.
Cindy and Ricky=s live petition asserted that the Individual Defendants were doing business as W&F Transportation. The evidence at trial showed that the Individual Defendants filed a certificate with the Harris County Clerk showing that the Individual Defendants were doing business under the assumed name of AW&F Transportation.@[9] Many of the exhibits admitted into evidence at trial referred to the Individual Defendants= business as AW&F Transportation.@ In the answers on which they went to trial, the Individual Defendants asserted verified denials of various matters, including that the agreement attached to the petition is their written agreement or was executed by them. They also asserted a verified denial that they were liable in the capacity in which they were sued. They did not, however, assert a verified denial that they were doing business as AW&F Transportation.@
The majority concludes that the verified denial as to capacity is sufficient to deny the allegations that they were doing business as AW&F Transportation.@ However, a review of the petition shows that Cindy and Ricky sought to hold the Individual Defendants liable in their individual capacities. To this end, Cindy and Ricky alleged, among other things, that the Individual Defendants were doing business as AW&F Transportation.@[10] Following the jury trial, the trial court granted judgment against the Individual Defendants in their individual capacities and denied their motion for judgment notwithstanding the verdict filed in their individual capacities. The Individual Defendants have appealed to this court in their individual capacities. Therefore, their denial that they were liable in the capacity in which they were sued was a denial that they were liable in their individual capacities rather than a denial that the Individual Defendants were doing business as AW&F Transportation.@ Their intention not to assert a verified denial of the latter is further corroborated by the fact that the affidavits by which the Individual Defendants verified their denials were executed by AW&F Transportation By: E.H. Wilhelm Sr.@ and by AW&F Transportation By: Margaret Wilhelm.@ Therefore, the Individual Defendants= verification of their answers was an act of doing business as W&F Transportation rather than a denial that the Individual Defendants were doing business in this name.
By failing to verify by affidavit a denial of Cindy and Ricky=s allegations that they were doing business as AW&F Transportation,@ the Individual Defendants failed to deny this matter, which was admitted by operation of law without the necessity of proof. See Tex. R. Civ. P. 93 (5), (14); Rhodes v. City of Austin, 584 S.W.2d 917, 924 (Tex. Civ. App.CTyler 1979, writ ref=d n.r.e.); Condry v. Mantooth, 460 S.W.2d 513, 516 (Tex. Civ. App.CHouston [1st Dist.] 1970, no writ). Therefore, the Individual Defendants are individually liable for all the liability of W&F Transportation. See, e.g., A to Z Rental Ctr. v. Burris, 714 S.W.2d 433, 436 (Tex. App.CAustin 1986, writ ref=d n.r.e.) (holding that person doing business as AB&S Construction@ was individually liable for obligations of AB&S Construction@). Thus, in addition to failing based on the absence of a complete record, the Individual Defendants= challenges in the third and fourth issues also lack merit because the charge submitted the liability of the Individual Defendants doing business as AW&F Transportation.@ Accordingly, the court should overrule the third and fourth issues.
Instead of overruling these issues, the court sustains them (as to the Individual Defendants) based on its erroneous conclusion that the verified denial as to capacity was sufficient to deny the assumed-name allegation. See ante at pp. 19B20. The majority relies on a Texas Supreme Court case which states that, A[i]f the jury finding is ambiguous or unclear, the courts must try to interpret the finding so as to uphold the judgment.@ First Fed. Sav. & Loan Ass=n of Dallas v. Sharp, 359 S.W.2d 902, 903 (Tex. 1962); see ante at p. 16. One obvious way to interpret the jury=s findings to uphold the trial court=s judgment would be to conclude that AW&F Transportation@ includes the Individual Defendants because they admitted they were individuals doing business as AW&F Transportation@ and because the jury had before it a certificate so stating. The court indicates that the Individual Defendants ceased doing business as AW&F Transportation@ in the past and that all recent transactions and references were clearly to the corporation. See ante at pp. 18B20. This conclusion is not supported by the record, and furthermore, counsel for the W&F Parties stated during the charge conference that the Individual Defendants Ahave a corporation and they have an assumed name with other records still out with W&F TransportationCtheir heading is W&F Transportation.@ Thus, counsel for the W&F Parties admitted at trial that the Individual Defendants were still doing business as AW&F Transportation.@ This court should interpret the jury findings as assessing liability as to the Individual Defendants based on their admission (both by their failure to file a verified denial and by counsel=s statements at the charge conference) that they were individuals doing business as AW&F Transportation@ and based on the assumed name certificate. This court errs by concluding that Ait is clear to us that the jury=s findings as to >W&F Transportation= referred to W&F Transportation, Inc.@[11] Ante at p. 17.
Conclusion
Under the applicable common-law rule, this court should presume that the omitted portions of an incomplete trial record are relevant to the appellate issues and support the trial court=s judgment because the common-law presumption has not been reversed by a recognized exception to this rule. The court errs in declining to do so and instead creating an exception to the general rule for unrecorded closing arguments. Likewise, the court also errs by failing to interpret the jury=s findings so as to uphold the trial court=s judgment and in concluding that the jury could not possibly have understood AW&F Transportation@ to include the Individual Defendants. Applying existing law, this court should overrule the third and fourth issues based on the common-law presumption and, in the alternative, on the Individual Defendants= failure to deny Cindy and Ricky=s allegations that the Individual Defendants were doing business as AW&F Transportation.@ For these reasons, the court should overrule the motion for rehearing in its entirety and affirm the trial court=s judgment.
/s/ Kem Thompson Frost
Justice
Judgment rendered and Memorandum Opinion of March 24, 2005, Withdrawn, and Majority and Dissenting Opinions on Rehearing filed October 5, 2006.
Panel consists of Chief Justice Hedges and Justices Frost and Guzman. (Hedges, C.J., majority).
[1] The existence of the general common-law rule is reflected in the language of Rule 34.6(c) itself. That rule states that, in an appeal under Rule 34.6(c), A[t]he appellate court must presume that the partial reporter=s record designated by the parties constitutes the entire record for purposes of reviewing the stated points or issues.@ See Tex. R. App. P. 34.6(c)(4) (emphasis added). Rather than stating that the portions of the record not included in the reporter=s record are presumed not relevant to the appeal, the rule states that the partial record is presumed to be complete. See id. In using this language, the Texas Supreme Court recognized the general common-law rule that appellate review of a complete record of the trial proceedings is the norm.
[2] Throughout this opinion, the word Arecord@ means Amake a record of.@ This term is intended to cover the making of a record in general, regardless of whether the record is made stenographically, electronically, or otherwise.
[3] The W&F Parties also assert that a conclusion that the record is not complete would violate the plain meaning of Rule 13.1(a) that allows parties to agree not to record closing arguments. The court seems to agree. See ante at pp. 5B6, 11B13. Though Rule 13.1(a) allows the parties to agree that closing arguments, or any other parts of the trial, should not be recorded, that rule does not address the consequences of such an agreement. Therefore, there is no conflict between Rule 13.1(a) and the common-law rule as to the ramifications of an incomplete record.
[4] The majority erroneously states that the approach taken by this dissent requires parties who appeal to produce a record of everything that occurred at trial. See ante at p. 12, 14. This dissent does not require parties who appeal to produce such a record, and these parties are free to use Rule 34.6(c) to avoid the inefficiency of transcribing parts of the trial record that are not needed to resolve the appellate issues. See Tex. R. App. P. 34.6(c).
[5] The W&F Parties assert on rehearing that this court=s original opinion presumed that counsel=s closing arguments might have contained evidence that would support the judgment. It is not presumed that counsel=s closing arguments constitute evidence, nor did the original opinion so state.
[6] Though in the majority opinion the court relies on Rule 34.1, that rule does not state when a reporter=s record is necessary. See Tex. R. App. P. 34.1; ante at p. 12.
[7] Two amici curiae have filed a brief in which they cite five cases in support of the proposition that, even absent the application of Rule 34.6(c), the trial record is complete without a record of the closing arguments. These cases do not change either the analysis or the conclusion.
In Stubbs v. Stubbs, the Texas Supreme Court held that the failure to record proceedings at trial in violation of the Texas Family Code constitutes error on the face of the record in support of a writ-of-error appeal. See 685 S.W.2d 643, 644B46 (Tex. 1985). While the Stubbs court stated that the failure to record oral testimony violated a section of the Family Code regarding the making of a record of all trial court proceedings, the Stubbs court was not required to and did not address whether a failure to record matters at trial other than oral testimony would violate this statute. See id. In an unpublished opinion in what appears to be a writ-of-error appeal, the Heimendinger court held that the appellant did not show on the face of the record that the trial court violated her due process rights in not recording voir dire, bench conferences, or closing arguments, in a case in which the appellant did not allege any other error by the trial court. See Heimendinger v. Tex. Dep=t of Prot. & Reg. Servs., No. 03-97-00079-CV, 1999 WL 274061, at *1B2 (Tex. App.CAustin May 6, 1999, pet. denied) (not designated for publication). The Heimendinger court=s obiter dictum that the Stubbs court interpreted the Family Code to mean that all oral testimony must be recorded does not address whether a record is complete without closing arguments. See id. In the unpublished Tovar v. Mazza opinion, the court mentions the absence of voir dire, closing arguments, and the trial exhibits from the record and concludes that the court need not decide the effect of this incomplete record. See No. 04-98-00387-CV, 1999 WL 174064, at *1B2 (Tex. App.CSan Antonio Mar. 31, 1999, no pet.) (not designated for publication). Therefore, the statement in the majority opinion that the Tovar court Adeclined@ to apply the common-law presumption is correct only to the extent that the court stated that it did not need to address whether the common-law presumption applied in that case. See id; ante at p. 10.
In Tenngasco Gas Gathering Co. v. Fischer, the Corpus Christi Court of Appeals affirmed the trial court=s judgment in a condemnation case. See 653 S.W.2d 469, 471 (Tex. App.CCorpus Christi 1983, writ ref=d n.r.e.). In that case, through no fault of the parties, the latter part of the trial, including the rebuttal evidence and closing arguments, was not recorded because the court reporter suffered a nervous breakdown. See id. at 471B72. The court stated that this incomplete statement of facts was made complete by the trial court=s certification of a narrative statement of the testimony of one witness. See id. at 473. The court then addressed the rest of the appeal, concluding (1) the trial court did not err in admitting certain testimony; (2) the evidence was sufficient to support the jury=s verdict; and (3) the condemnor had the right of eminent domain. See id. at 473B76. On rehearing, the court stated that the absence from the statement of facts of certain rebuttal testimony and the closing arguments, which was not the subject of the trial court=s certification, did not cause the court to depart from its original opinion, in part because there was no appellate issue relating to closing arguments. See id. at 476. The Fischer court did not discuss the cases regarding the presumption that omitted portions of the trial record support the trial court=s judgment, and, in any event, its judgment affirming the trial court is consistent with these cases. See id. Furthermore, Fischer involved a different situation in which the incomplete record did not result from the agreement or request of the parties but from a circumstance beyond the parties= control. See id. at 471B72. In In re M.S., a mother whose parental rights had been terminated asserted that her trial counsel was ineffective in failing to have a record made of voir dire, the charge conference, and closing arguments and that this failure harmed her because it made it more difficult for her to prove ineffective assistance of counsel. See 115 S.W.3d 534, 545B46 (Tex. 2003). The Texas Supreme Court concluded that the mother had not shown any harm from her counsel=s alleged ineffectiveness in failing to object to the failure to record voir dire, the charge conference, and closing arguments. See id. These five cases are not relevant or persuasive as to the issues in the instant case.
[8] Texas corporations are required to have in their names one of the following words or an abbreviation thereof: Acorporation,@ Acompany,@ Aincorporated,@ or Alimited.@ Tex. Bus. Corp. Act. art. 2.05(A)(1) (Vernon 2003). One of the reasons for this requirement is to alert those doing business with the corporation to the fact that they are doing business with an incorporated entity. See Lassiter v. Rotogravure Comm., Inc., 727 S.W.2d 8, 10 (Tex. App.CDallas 1986, writ ref=d n.r.e.). In the majority opinion, the court concludes that references to AW&F Transportation@ are clearly references to AW&F Transportation, Inc.@ See ante at p. 17. This interpretation is far from obvious and is contrary to the way terms are typically viewed and understood in Texas law. In fact, given the Texas framework and nomenclature for corporate entities, it is more likely that AW&F Transportation@ would be interpreted as a reference to the Individual Defendants= unincorporated proprietorship, especially in light of their assumed-name certificate which was in effect at all material times and which was never abandoned or withdrawn. The court also states without explanation that counsel for all parties and all of the witnesses referred to AW&F Transportation, Inc.@ as AW&F Transportation.@ While there are many references to AW&F Transportation@ in the record, in most cases it is not clear whether the speaker is referring to the corporation or the assumed name for the unincorporated proprietorship. The court appears to presume without justification that all of these references are to the corporation.
[9] The court seems to imply that creating a corporation with a name similar to a previously unincorporated business run by the owners of the new corporation automatically destroys the unincorporated business and precludes the principals from ever doing business as the unincorporated entity. See ante at pp. 18B20 & n.15. This is not the law. See, e.g., Rehab 2112, L.L.C. v. Audio Images Int=l, Inc.,168 S.W.3d 308, 311 (Tex. App.CDallas 2005, no pet.) (holding that trial court could render judgment against defendant doing business under assumed names ANorth Texas MRI@ and AWhite Rock MRI,@ despite the contemporaneous existence of limited liability companies whose names contained the same words followed by AL.L.C.@). The court asserts that the First Court of Appeals, in Negrini v. Plus Two Advertising, Inc., held that an assumed name certificate did not provide a basis for establishing individual liability after an entity became incorporated. See ante at p. 19, citing 695 S.W.2d 624, 631 (Tex. App.CHouston [1st Dist.] 1985, no writ). The Negrini court simply concluded, under the facts shown by the record from the bench trial, that the assumed-name certificate in question was not legally sufficient evidence to prove all the essential elements of a general partnership between the parties who signed the certificate. See Negrini, 695 S.W.2d at 631.
[10] The majority opinion states that, during the charge conference, the parties discussed the fact that the court=s charge referred to W&F Transportation, Inc. See ante at p. 17, n.12. This is not correct. Counsel for Cindy and Ricky never stated that the charge referred to W&F Transportation, Inc., and the court never indicated that the charge referred to W&F Transportation, Inc. In fact, when counsel for the W&F Parties requested a jury instruction that the charge only referred to the corporate defendant, counsel for Cindy and Ricky objected and indicated that the jury charge covered all three defendants. A review of the record of the charge conference shows that the only objection the W&F Parties distinctly pointed out to the trial court in this regard was their objection that the charge did not define AW&F Transportation@ to mean AW&F Transportation, Inc.@ See Tex. R. Civ. P. 274 (stating that A[a] party objecting to a charge must point out distinctly the objectionable matter@). Therefore, this is the only charge objection as to which the W&F Parties preserved error. See id.
[11] The W&F Parties assert that Perez v. Weingarten Realty Investors is on point. See 881 S.W.2d 490, 493B94 (Tex. App.CSan Antonio 1994, writ denied). That case did not involve a partial record, and it affirmed the trial court=s refusal to submit questions proposed by the plaintiff because they did not contain substantially correct wording. See id. The Perez case is not on point.