Fourth Court of Appeals
San Antonio, Texas
OPINION
No. 04-13-00420-CV
TIME WARNER, INC. and Time Warner Cable, LLC,
Appellants
v.
Dulio GONZALEZ,
Appellee
From the 166th Judicial District Court, Bexar County, Texas
Trial Court No. 2011-CI-06770
Honorable John D. Gabriel, Jr., Judge Presiding
Opinion by: Catherine Stone, Chief Justice
Sitting: Catherine Stone, Chief Justice
Marialyn Barnard, Justice
Luz Elena D. Chapa, Justice
Delivered and Filed: June 11, 2014
REVERSED AND REMANDED
This appeal arises from a personal injury lawsuit brought by Dulio Gonzalez against Time
Warner, Inc. and Time Warner Cable, LLC (Time Warner). In two issues on appeal, Time Warner
contends the trial court erred in: (1) denying its request to withdraw deemed admissions; and (2)
awarding pre-judgment interest. We sustain Time Warner’s first issue, reverse the trial court’s
judgment, and remand the cause to the trial court for a new trial. Because our resolution of Time
Warner’s first issue is dispositive of this appeal, we do not address Time Warner’s second issue.
See TEX. R. APP. PROC. 47.1.
04-13-00420-CV
BACKGROUND
In the underlying lawsuit, Gonzalez alleged that he suffered injury when he tripped on an
exposed cable in his backyard that was negligently installed or maintained by Time Warner. In
Gonzalez’s original and amended petitions, Gonzalez included requests for admission related to
liability and damages. 1 Time Warner timely answered the lawsuit with an unverified denial,
asserting that Time Warner, Inc. and Time Warner Cable, LLC were not proper parties to the
lawsuit, but rather Time Warner Cable San Antonio, L.P. (Time Warner San Antonio) was the
only proper party.
Time Warner San Antonio responded to the requests for admission originally sent to Time
Warner. In subsequent pleadings, Time Warner repeated that Time Warner San Antonio was the
proper defendant, not Time Warner; however, these pleadings were not verified. See TEX. R. CIV.
P. 93(2) (requiring that a pleading asserting “that the defendant is not liable in the capacity in
which he is sued” be verified by affidavit).
After a jury was selected but before opening statements, Gonzalez first made a motion to
nonsuit Time Warner San Antonio. Then, for the first time, Gonzalez argued that his requests for
admission were deemed admitted because they were never answered by Time Warner. Although
Gonzalez acknowledged that Time Warner San Antonio responded to the requests, Gonzalez noted
that Time Warner San Antonio was not, and had never been, a party to the lawsuit. 2 Because the
deemed admissions established liability and the amount of damages, Gonzalez requested a
1
Gonzalez requested that Time Warner admit that: (1) it “failed to maintain the premises at issue in a reasonable safe
condition;” (2) it “knew that the exposed cable at the premises at issue presented a dangerous condition;” (3) “in the
exercise of reasonable diligence, [Time Warner] should have discovered that there was an unreasonably dangerous
condition within the premises at issue prior to the incident;” (4) there “were complaints of dangerous conditions within
the premises at issue prior to the incident;” (5) its “negligence was the proximate cause of the occurrence in question;”
(6) Gonzalez “did not commit any act of negligence that caused this incident;” (7) Gonzalez was injured “as the result
of a dangerous condition created by [Time Warner];” and (8) as a result of that injury, Gonzalez “incurred $900,000
in damages.”
2
We note that this argument appears to be inconsistent with Gonzalez’s motion to nonsuit Time Warner San Antonio.
-2-
04-13-00420-CV
judgment against Time Warner for $900,000. In response to Gonzalez’s request, Time Warner
argued that Time Warner San Antonio was a party to the suit because in Time Warner’s answer
and subsequent pleadings, Time Warner stated that Time Warner San Antonio was the only proper
defendant. Time Warner also made a request to withdraw the deemed admissions. After the trial
court denied Time Warner’s request, the parties agreed to waive the jury and proceed to a bench
trial. The trial court entered a final judgment against Time Warner, awarding Gonzalez $900,000
in damages plus interest and costs.
STANDARD OF REVIEW
A request for admission is a “written request[] that the other party admit the truth of any
matter within the scope of discovery . . . .” TEX. R. CIV. P. 198.1. “If a response is not timely
served, the request is considered admitted without the necessity of a court order.” TEX. R. CIV. P.
198.2(c). An admitted matter is “conclusively established as to the party making the admission
unless the court permits the party to withdraw or amend the admission.” TEX. R. CIV. P. 198.3. A
trial court has discretion to permit a party to withdraw an admission if: (a) the party shows good
cause for the withdrawal; (b) the court finds that the other party will not be unduly prejudiced; and
(c) presentation of the lawsuit’s merits is served by the withdrawal. See id.; Cleveland v. Taylor,
397 S.W.3d 683, 694 (Tex. App.—Houston [1st Dist.] 2012, pet. denied).
We review a trial court’s decision to permit or deny withdrawal of deemed admissions for
an abuse of discretion. Stelly v. Papania, 927 S.W.2d 620, 622 (Tex. 1996) (per curiam). “An
abuse of discretion occurs when a court acts without reference to guiding rules or principles, or
acts arbitrarily or unreasonably.” Id. Texas Rule of Civil Procedure 198.3 provides the “guiding
rules or principles” the trial court must follow when ruling on a request to withdraw deemed
admissions. See id. at 621. Additionally, when due process concerns are raised by deemed
admissions which act as a merits-preclusive sanction, the trial court must follow the guiding rules
-3-
04-13-00420-CV
and principles established by Wheeler v. Green, 157 S.W.3d 439 (Tex. 2005) (per curiam). In re
Rozelle, 229 S.W.3d 757, 763 (Tex. App.—San Antonio 2007, orig. proceeding).
DEEMED ADMISSIONS
A. Good Cause
“Good cause” can be shown when a party’s failure to answer “was accidental or the result
of a mistake, rather than intentional or the result of conscious indifference.” Stelly, 927 S.W.2d at
622. “Even a slight excuse will suffice, especially when delay or prejudice to the opposing party
will not result.” In re Kellogg-Brown & Root, Inc., 45 S.W.3d 772, 775 (Tex. App.—Tyler 2001,
orig. proceeding) (quoting Spiecker v. Petroff, 971 S.W.2d 536, 538 (Tex. App.—Dallas 1997, no
pet.)). Good cause also exists when due process concerns are implicated by deemed admissions
that act as a merits-preclusive discovery sanction, absent bad faith or callous disregard on the part
of the party requesting withdrawal. Marino v. King, 355 S.W.3d 629, 634 (Tex. 2011) (per
curiam).
1. Merits-Preclusive Effect
In Wheeler, the Texas Supreme Court first held that when deemed admissions are not used
as intended and “preclude presentation of the merits of a case, . . . due-process concerns arise.”
157 S.W.3d at 443 (citing TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913, 917–18
(Tex. 1991)). Requests for admission are intended to simplify trials by “addressing uncontroverted
matters or evidentiary ones like the authenticity or admissibility of documents . . . .” Id. They are
not intended to require a defendant to admit the validity of a plaintiff’s claims or concede his
defenses. Marino, 355 S.W.3d at 632. Nor are they intended to be used as “traps for the unwary.”
Stelly, 927 S.W.2d at 622; see also Marino, 355 S.W.3d at 632 (“requests for admission should be
used as ‘a tool, not a trapdoor’”) (quoting U.S. Fid. & Guar. Co. v. Goudeau, 272 S.W.3d 603,
610 (Tex. 2008)).
-4-
04-13-00420-CV
Gonzalez contends that the deemed admissions do not raise due process concerns because
Time Warner had the opportunity to enter evidence, but chose not to do so. The requests for
admission concerned Time Warner’s liability, its defense of contributory negligence, and the
amount of damages. The trial court indicated on the record that it would not allow Time Warner
to introduce evidence conflicting with the deemed admissions. 3 Because of the breadth of the
admissions, Time Warner was essentially precluded from offering any relevant evidence. In
addition to the deemed admissions, Gonzalez introduced the entire depositions of Gonzalez,
Gonzalez’s wife, and Gonzalez’s doctors. When Time Warner re-urged the objections it
previously made to various parts of the depositions, the trial court immediately overruled all of the
objections, citing the existence of the deemed admissions. Based on this record, it is clear that the
trial court’s decision to render judgment in favor of Gonzalez was based solely on the deemed
admissions conclusively establishing the ultimate legal issues in the case. Accordingly, because
the requests for admission were not used as intended, and had a merits-preclusive effect, the
resulting due process concerns establish good cause for their withdrawal. See Marino, 355 S.W.3d
at 634.
2. Flagrant Bad Faith or Callous Disregard
Because the deemed admissions in this case were merits-preclusive, thereby raising due
process concerns, the trial court was required to allow their withdrawal unless the party requesting
withdrawal acted with “flagrant bad faith or callous disregard of the rules.” Wheeler, 157 S.W.3d
at 443. “Bad faith is not simply bad judgment or negligence, but the conscious doing of a wrong
3
The trial court stated: “So I think procedurally I need to let [Gonzalez’s counsel] proceed. He’s got deemed
admissions. You filed general denials as to those two defendants, so I mean, I – I guess [Time Warner’s counsel] gets
to cross examine them. But I guess he just can’t offer any other evidence on his part, is what I am seeing.”
-5-
04-13-00420-CV
for dishonest, discriminatory, or malicious purpose.” Armstrong v. Collin Cnty. Bail Bond Bd.,
233 S.W.3d 57, 63 (Tex. App.—Dallas 2007, no pet.).
As a preliminary matter, the parties dispute who bore the burden to prove that Time Warner
acted with bad faith or callous disregard. Time Warner argues the burden rests with Gonzalez,
citing Marino. Conversely, Gonzalez contends that the burden was on Time Warner, as the party
requesting withdrawal, to prove that it did not act with bad faith or callous disregard.
Ordinarily, the burden of showing good cause and no undue prejudice lies with the party
seeking withdrawal of deemed admissions. Boulet v. State, 189 S.W.3d 833, 836 (Tex. App.—
Houston [1st Dist.] 2006, no pet.). When the due process concerns recognized in Wheeler are
implicated, however, the Texas Supreme Court has stated that the burden lies with the summary
judgment movant. Marino, 355 S.W.3d at 634. Because the party moving for summary judgment
based on deemed admissions would logically be the party opposing withdrawal of those
admissions, we read Marino to place the burden on the party opposing withdrawal. This is
consistent with other forms of discovery sanctions, where the burden of proving bad faith rests
with the party seeking sanctions. GTE Commc’ns Sys. Corp. v. Tanner, 856 S.W.2d 725, 731
(Tex. 1993) (orig. proceeding); Dike v. Peltier Chevrolet, Inc., 343 S.W.3d 179, 184 (Tex. App.—
Texarkana 2011, no pet.). Accordingly, we hold that Gonzalez had the burden of proving that
Time Warner acted with bad faith or callous disregard.
Time Warner contends that Gonzalez offered no evidence to establish that it acted with bad
faith or callous disregard. Time Warner concedes that it made a mistake by not substituting the
correct party as a defendant by a verified pleading, but argues this mistake does not rise to the level
of flagrant bad faith or callous disregard. Gonzalez, on the other hand, contends that Time Warner
acted in flagrant bad faith because it intentionally answered discovery on behalf of an entity that
-6-
04-13-00420-CV
had not been sued and that Time Warner callously disregarded the rules of civil procedure when it
failed to take the proper procedural steps to verify its denial.
The record contains no evidence establishing that Time Warner acted with bad faith or
callous disregard of the rules of procedure. At most, the record establishes that Time Warner was
negligent in failing to properly substitute the correct defendants as parties. Time Warner fully
participated in litigating the case for two years, including responding to discovery requests,
developing evidence, and participating in mediation. There is no evidence to suggest that Time
Warner knew of its mistake prior to the day of trial, when Gonzalez brought it to its attention.
Accordingly, we hold that Gonzalez failed to establish that Time Warner acted with flagrant bad
faith or callous disregard. See Smith v. Nguyen, 855 S.W.2d 263, 267 (Tex. App.—Houston [14th
Dist.] 1993, writ denied) (attorney’s mistaken belief concerning active parties to lawsuit resulting
in missed deadlines did not amount to callous disregard).
B. Undue Prejudice
Notwithstanding good cause for withdrawal, we must also consider whether the withdrawal
would have caused Gonzalez undue prejudice. See Wheeler, 157 S.W.3d at 444 (holding that
deemed admissions raised due process concerns but also considering undue prejudice); see also
Marino, 355 S.W.3d at 634 (same); but see Thomas v. Select Portfolio Servicing, Inc., 293 S.W.3d
316, 321 (Tex. App.—Beaumont 2009, pet. denied) (holding trial court abused its discretion by
not permitting withdrawal of deemed admissions implicating due process concerns but not
addressing undue prejudice). “Undue prejudice depends on whether withdrawing an admission or
filing a late response will delay trial or significantly hamper the opposing party’s ability to prepare
for it.” Wheeler, 157 S.W.3d at 443. Gonzalez contends that withdrawal of the deemed admissions
would have caused undue prejudice because he chose not to develop evidence in reliance on the
deemed admissions. Citing Morgan v. Timmers Chevrolet, Inc., 1 S.W.3d 803 (Tex. App.—
-7-
04-13-00420-CV
Houston [1st Dist.] 1999, pet. denied), Gonzalez argues that he was entitled to rely on the deemed
admissions in this manner as the basis for his trial strategy.
Time Warner responds that Gonzalez suffered no undue prejudice because his choice to
forego depositions and rely solely on the deemed admissions was a “situation of his own creation.”
Time Warner contends that Gonzalez was not unable to prepare for trial, he simply chose to not
prepare for trial based on his planned use of a discovery trap.
In Morgan, the plaintiff brought a premises liability claim against his employer. 1 S.W.3d
at 804. The plaintiff served the defendant with thirty-four requests for admission, but the defendant
answered only eighteen. Id. at 805. When the plaintiff brought this error to the defendant’s
attention, the defendant responded again with a copy his previous response containing only
eighteen responses. Id. When the plaintiff attempted to admit the fifteen unanswered requests as
deemed admissions at trial, the defendant moved to withdraw them. Id. Although the plaintiff
explained that he chose not to take certain depositions based on the evidence established by the
deemed admissions, the trial court permitted the defendant to withdraw the deemed admissions.
Id. at 805–806.
On appeal, the court of appeals reversed the trial court. The court of appeals did not decide
whether good cause existed for withdrawal, but noted the error was brought to the defendant’s
attention prior to trial, which weighed against a finding of good cause. Id. at 807. The court then
held that the plaintiff suffered undue prejudice because he relied on the deemed admissions in
deciding not to develop evidence to support the deemed facts. Id. The court held the plaintiff
“[was] entitled to rely on the guiding rules and principles set out in the Rules of Civil Procedure
regarding deemed admissions.” Id.
As the Morgan case illustrates, “[u]ndue prejudice has generally been found in those
instances in which a party waited until the day of trial or after to request the withdrawal of deemed
-8-
04-13-00420-CV
admissions.” Watson v. Dallas Indep. Sch. Dist., 135 S.W.3d 208, 215 (Tex. App.—Dallas 2004),
overruled on other grounds by, Univ. of Tex. Med. Branch at Galveston v. Barrett, 159 S.W.3d
631 (Tex. 2005) (per curium). In those instances, the party relies on the deemed admissions in
deciding not to take depositions or otherwise develop evidence to support the deemed facts.
Morgan, 1 S.W.3d at 807 n.5. If the trial court allows the deemed admissions to be withdrawn,
the party relying on them would need additional time to develop the evidence, and the delay in
trial would cause undue prejudice. Likewise, undue prejudice results because that party is denied
an opportunity to develop necessary evidence, hampering its ability to prepare for trial. See Reyes
v. Int’l Metals Supply Co., 666 S.W.2d 622, 625 (Tex. App.—Houston [1st Dist.] 1984, no writ.)
(defendant suffered undue prejudice where plaintiff requested withdrawal of deemed admissions
after trial was underway because defendant “had no reason to be prepared to offer proof” of the
facts deemed admitted).
Morgan, however, significantly pre-dated Wheeler and did not address any merits-
preclusive due process concerns. Additionally, the court of appeals that decided Morgan has since
declined to apply its reasoning in holding that a party is not unduly prejudiced when deemed
admissions, which improperly “embrace controverted issues that go to the heart of [the] case,” are
withdrawn during trial. In re A.A., No. 01-13-00542-CV, 2013 WL 6569922, at*15 (Tex. App.—
Houston [1st Dist.] Dec. 12, 2013, no pet. h.) (mem. op.).
We find the analysis in In re A.A. to be instructive. The primary purpose of requests for
admission is “to simplify trials by eliminating matters about which there is no real controversy,
but which may be difficult or expensive to prove.” Stelly, 927 S.W.2d at 622 (quoting Sanders v.
Harder, 148 Tex. 593, 227 S.W.2d 206, 208 (1950)); accord Marino, 355 S.W.3d at 632. Requests
for admission are useful when “addressing uncontroverted matters or evidentiary ones like the
authenticity or admissibility of documents.” Wheeler, 157 S.W.3d at 443. They were “never
-9-
04-13-00420-CV
intended to be used as a demand upon a plaintiff or defendant to admit that he had no cause of
action or ground of defense.” Stelly, 927 S.W.2d at 622 (quoting Sanders, 227 S.W.2d at 208).
Therefore, requests for admission are improper and ineffective when used to establish controverted
issues that constitute the fundamental legal issues in a case. Cedyco Corp. v. Whitehead, 253
S.W.3d 877, 880 (Tex. App.—Beaumont 2008, pet. denied) (reversing summary judgment based
on deemed admission concerning which party was the “sole legal owner” of a judgment); see
Boulet, 189 S.W.3d at 838 (admission improper because it was a “fundamental issue[] to be tried,”
holding the rule regarding requests for admission does not “contemplate or authorize admissions
to questions involving points of law”); Lucas v. Clark, 347 S.W.3d 800, 804 (Tex. App.—Austin
2011, pet. denied) (request that opposing party admit that he suffered ten million dollars in
damages was improper, holding “overly broad, merit-preclusive requests for admission[] are
improper and may not result in deemed admissions”).
When the party requesting admissions knew or should have known that the admissions
were improper in this regard, that party cannot be said to have relied on the admissions in deciding
not to otherwise develop evidence. While that party may be prejudiced by the withdrawal of the
admissions during the trial, that prejudice is not “undue.” See Marino, 355 S.W.3d at 632 (holding
that plaintiff’s request that defendant admit to the validity of plaintiff’s claims and concede the
defendant’s defenses, matters the plaintiff “knew to be in dispute,” were improper); see also Wells
v. Best Ins. Servs., Inc., No. 13-09-00236-CV, 2010 WL 4264792, at*5 (Tex. App.—Corpus
Christi Oct. 28, 2010, no pet.) (mem. op.) (finding no undue prejudice where the party propounding
the deemed admissions did not conduct discovery in reliance on deemed admissions because that
party was aware of the opposing party’s contradictory legal positions based on the pleadings); see
also Thompson v. Woodruff, 232 S.W.3d 316, 322 (Tex. App.—Beaumont 2007, no pet.) (finding
no undue prejudice and considering that the defendant propounding the deemed admissions “could
- 10 -
04-13-00420-CV
not have been misled into thinking” that the plaintiff was admitting that the defendant was not
negligent when that proposition was clearly inconsistent with the plaintiff’s pleadings); see also
Employers Ins. of Wasau v. Halton, 792 S.W.2d 462, 467 (Tex. App.—Dallas 1990, writ denied)
(considering a party’s knowledge that issues were controverted in finding no undue prejudice).
In this case, Gonzalez sought admissions that Time Warner’s negligence was the proximate
cause of Gonzalez’s injuries and that Gonzalez was not negligent—controverted legal issues that
completely established Gonzalez’s negligence claim and completely negated Time Warner’s
contributory negligence defense. Because these requests for admission were improper, Gonzalez
was not justified in relying on them in deciding not to develop evidence to support his claim.
Accordingly, we hold that Gonzalez was not “unduly” prejudiced by the withdrawal of the deemed
admissions.
C. Presentation of the Merits
Lastly, the trial court must consider whether the “presentation of the merits of the action
will be subserved by permitting the party to amend or withdraw the admission.” TEX. R. CIV. P.
198.3. Presentation of the merits is not served when “the case is decided on deemed (but perhaps
untrue) facts . . . .” Wheeler, 157 S.W.3d at 443 n.2. As discussed, the merits of this case were
never truly litigated because the case was decided on deemed admissions. There is no question
that presentation of the merits would have been served by the trial court’s withdrawal of the
deemed admissions. See In re Kellogg-Brown & Root, Inc., 45 S.W.3d at 777 (considering that
the admissions at issue would “vitiate any substantive defense” the party might have had in
concluding that presentation of the merits will be served). Accordingly, the trial court abused its
discretion when it denied Time Warner’s request to withdraw the deemed admissions.
- 11 -
04-13-00420-CV
WAIVER
Gonzalez argues that Time Warner did not preserve error on the deemed admissions issue
because it failed to obtain a ruling from the trial court on its motion for leave to file late discovery
responses. Gonzalez points to no authority, however, requiring such a motion in order to preserve
a complaint that a trial court abused its discretion in denying a request to withdraw deemed
admissions. A request to withdraw deemed admissions is sufficient to “make the trial court aware
of the complaint.” TEX. R. APP. PROC. 33.1(a)(1)(A); see Wheeler, 157 S.W.3d at 442. On the
record, Time Warner’s counsel requested “that the Court undeem the admissions.” Later, during
the same proceeding, Time Warner’s counsel made reference to this objection. In response, the
trial court stated: “Based on where we are today I will overrule the objection.” Accordingly, we
hold that Time Warner preserved error on the deemed admissions issue.
CONCLUSION
In conclusion, we hold that the trial court abused its discretion when it denied Time
Warner’s request to withdraw the deemed admissions. The record contains evidence establishing
that Time Warner had good cause for the withdrawal because the deemed admissions acted as
merits-preclusive sanctions that raised due process concerns. Gonzalez would not have been
unduly prejudiced by relying on improper requests for admission, and presentation of the merits
would have been served by withdrawal of the admissions. The trial court’s judgment is reversed
and the cause is remanded for a new trial.
Catherine Stone, Chief Justice
- 12 -