Fifty-One Thousand One Hundred and Twenty-Four Dollars in US Currency v. State

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION

No. 04-18-00428-CV

FIFTY-ONE THOUSAND ONE HUNDRED AND TWENTY-FOUR DOLLARS in US
Currency, et al.,
Appellant

v.

The STATE of Texas,
Appellee

From the 229th Judicial District Court, Starr County, Texas
Trial Court No. DC-17-658-A
Honorable Jose Luis Garza, Judge Presiding

Opinion by: Rebeca C. Martinez, Justice

Sitting: Rebeca C. Martinez, Justice
Irene Rios, Justice
Beth Watkins, Justice

Delivered and Filed: April 24, 2019

REVERSED AND REMANDED

This is an appeal from a severed, partial summary judgment in favor of the State of Texas

based on deemed admissions. Appellant Graciano Garcia asserts the trial court lacked subject

matter jurisdiction because the forfeiture petition was not timely filed and the State failed to name

Maria Soza-Lopez (“Soza”) as an interest holder or serve her with process within the thirty-day

statute of limitations. Garcia also contends the trial court erred by granting a partial summary

judgment based on deemed admissions. We reverse the trial court’s judgment and remand the

cause for a new trial.
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BACKGROUND

On November 3, 2017, investigators from the Starr County High Intensity Drug

Trafficking Area Task Force and U.S. Border Patrol agents arrived at the home of Garcia and his

wife Soza based on a tip that narcotics were being stored at the home and in a vacant lot adjacent

to the home. Garcia gave the investigators consent to search his home and gave them keys to a

travel trailer that was located on the property. After the investigators found an eleven-pound brick

of marijuana in the travel trailer, Garcia withdrew his consent to the search because he was told

Soza was also going to be detained. After Garcia withdrew his consent, the property was secured

while a valid search warrant was obtained. As a result of the search, the investigators seized:

(1) $51,124 of U.S. currency located in the home; (2) a 2010 beige Cadillac SRX; (3) a 2005 Ford

F-150 truck; and (4) a 2006 Cherokee Travel Trailer. During the investigation, Soza stated the

currency did not belong to her, and she did not know it was in the residence.

On November 21, 2017, the State filed its original notice of seizure and intended forfeiture

of the assets listed above and named: Garcia as the owner of the currency and the Cadillac SRX;

Alejandro Rodriguez as the owner of the F-150; and Jose Lopez as the owner of the travel trailer.

These were the only individuals named as claimants of the assets in the original notice of seizure.

The notice alleged that the date of seizure was September 21, 2017, however, the investigator’s

affidavit attached to the notice attested to the actual seizure date of November 3, 2017. Garcia

filed an answer claiming he was an innocent owner of the alleged contraband. Neither of the other

claimants filed an answer.

On December 21, 2017, the State sent Garcia a request for admissions. Garcia did not

respond. On January 26, 2018, the State filed a motion for partial summary judgment based on

deemed admissions. The summary judgment hearing was scheduled for March 3, 2018, and Garcia

filed a motion to strike the deemed admissions on February 28, 2018. Garcia claimed he was not

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able to respond to the request for admissions because a discrepancy with his work calendar caused

a scheduling conflict and he was not able to return to Starr County in time to answer the

admissions. The trial court denied the motion to strike deemed admissions and granted partial

summary judgment in favor of the State as to the $51,124 of U.S. currency, only. Subsequently,

the trial court granted the State’s motion to sever the forfeiture of the $51,124 into a separate cause

making the summary judgment final as to that asset. Garcia appeals.

NECESSARY PARTIES

In his first issue, Garcia argues that the forfeiture proceeding should be dismissed because

Soza and Jose Infante, another individual who was in possession of the F-150 truck during the

search, were not made parties to the original suit. Because the trial court’s summary judgment

relates only to the $51,124 in U.S. currency, Infante’s claims are not at issue in this appeal.

Garcia claims Soza is an interest holder in the currency and, because the State did not

perfect service of process on Soza, the forfeiture proceeding is barred by article 59.04’s thirty-day

limitation period. TEX. CODE CRIM. PROC. ANN. § 59.04 (requiring the State’s attorney to send

certified copies of the notice of seizure and intended forfeiture to be served on any owner and

possessory interest holder of the seized assets within thirty days of the seizure). Article 59.04(l)

states: “Proceedings commenced under this chapter may not proceed to hearing unless the judge

who is to conduct the hearing is satisfied that this article has been complied with . . . .” TEX. CODE

CRIM. PROC. ANN. § 59.04(l).

The State argues it caused certified copies of the notice to be served on the only owner and

interest holder in the currency when it perfected service on Garcia. In support of this argument,

the State points to the seizing officers’ affidavit attesting that Soza disclaimed any possessory

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interest in the currency. 1 Garcia responds by pointing to an affidavit Soza filed with the court after

the summary judgment hearing and the order granting severance in which she attests that she did

not make any representations to the State that she did not care about the seized currency. However,

this affidavit does not contend that Soza had any possessory interest in the currency, and the

affidavit was not before the trial court at the summary judgment hearing. See Cincinnati Life Ins.

Co. v. Cates, 927 S.W.2d 623, 625 (Tex. 1996) (an appellate court may only review issues that

were raised before the trial court on summary judgment). Therefore, we hold the trial court did

not err in proceeding with the hearing because, based on the seizing officers’ affidavit, the trial

court was satisfied that all owners and possessory interest holders had been timely served with

process within the thirty-day time frame. Garcia’s first issue is overruled.

DATE OF SEIZURE

In his third issue, Garcia contends the State lacked subject matter jurisdiction based on the

date of seizure alleged in the notice of seizure and intended forfeiture. However, the seizing

officers’ affidavit attached to the original notice of seizure and intended forfeiture attested that the

seizure occurred on November 3, 2017, and Garcia concedes in his brief that the seizure occured

on November 3, 2017. Therefore, we must determine whether the mistaken date in the original

notice of seizure and intended forfeiture was a pleading defect that divested the trial court of

subject matter jurisdiction.

Article 59.04 of the Texas Code of Criminal Procedure provides guidance in how the State

initiates a forfeiture proceeding. TEX. CODE CRIM. PROC. ANN. § 59.04. Specifically, the article

lays out the required information and allegations the State’s original notice of seizure and forfeiture

must include to “commence” a forfeiture proceeding. Id. “Proceedings commenced under this

1
The seizing officers’ affidavit states: “SOZA said she did not know the currency was there, and does not belong to
her.”

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chapter may not proceed to hearing unless the judge who is to conduct the hearing is satisfied that

this article has been complied with . . . .” Id. § 59.04(l). However, not all procedural violations

should result in dismissal of a forfeiture action. State v. Silver Chevrolet Pickup VIN

1GCEC14T7YE257128, 140 S.W.3d 691, 694 (Tex. 2004); see also State v. $435,000, 842 S.W.2d

642, 644 (Tex. 1992) (holding the trial court’s failure to timely hold forfeiture hearing did not

warrant dismissal of the case); $4,030 v. State, No. 07-12-00414-CV, 2014 WL 4078658, at *3

(Tex. App.—Amarillo Aug. 18, 2014) (concluding the trial court did not err when the notice stated

it was filed by the seizing officer rather than the district attorney); State v. Park, 820 S.W.2d 948,

951 (Tex. App.—Texarkana 1991, no writ) (holding the State’s failure to attach the police officer’s

statement to the notice of seizure, as required by statute, was curable by amendment and did not

require dismissal of the case). In a forfeiture hearing, all parties must comply with the rules of

pleadings as required in civil suits. TEX. CODE CRIM. PROC. ANN. § 59.05(a). Therefore, every

defect in pleading, whether it be in form or substance, is waived unless it is brought to the attention

of the trial court by special exception. TEX. R. CIV. P. 90.

Here, Garcia claims the discrepancy between the date alleged in the notice of seizure and

intended forfeiture and the date in the seizing officers’ affidavit divests the trial court of subject

matter jurisdiction. We disagree for several reasons. First, article 59.04 does not require the notice

of seizure and intended forfeiture to include the date of seizure, but only requires the suit be

commenced no later than the thirtieth day after seizure. Because the date of seizure was

November 3, 2017, and the forfeiture suit was commenced on November 21, 2017, the State met

the thirty-day requirement. In addition, even if the pleading defect was a procedural violation

under Article 59.04, the mistaken date on the notice of seizure and intended forfeiture could have

been cured by amendment if it was brought to the court’s attention by special exception.

Accordingly, just as the failure to attach a seizing officers’ affidavit does not warrant dismissal, a

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discrepancy in the date between the affidavit and notice of seizure does not warrant dismissal. See

Park, 820 S.W.2d at 951. Finally, because Garcia failed to give the State an opportunity to cure

the defect by filing a special exception, he has waived error. TEX. R. CIV. P. 90. We overrule

Garcia’s third issue.

SUMMARY JUDGMENT BASED ON DEEMED ADMISSIONS

In his second issue, Garcia argues the trial court erred in granting summary judgment based

on his deemed admissions. The State sent a request for admissions to Garcia on December 21,

2017. Because Garcia did not timely respond to that request, the request was deemed admitted.

Garcia filed a motion to withdraw the admissions, while the State moved for summary judgment

based on the deemed admissions. We must decide whether the trial court abused its discretion in

denying the withdrawal of the deemed admissions when they had a merits-preclusive effect on the

case.

Standard of Review

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.

Applicable Law

When a party requests admissions, “[t]he responding party must serve a written response

on the requesting party within 30 days after service of the request” and failure to do so will result

in the request being deemed admitted. TEX. R. CIV. P. 198.2. The trial court may permit the

responding party to withdraw the deemed admissions if: “(a) the party shows good cause for the

withdrawal or amendment; (b) the court finds that the parties relying upon the responses and

deemed admissions will not be unduly prejudiced[;] and [(c)] the presentation of the merits of the

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action will be subserved by permitting the party to amend or withdraw the admission.” TEX. R.

CIV. P. 198.3. “Good cause is established by showing the failure involved was an accident or

mistake, not intentional or the result of conscious indifference.” Wheeler v. Green, 157 S.W.3d

439, 442 (Tex. 2005) (per curiam). “Good cause also exists when due process concerns are

implicated by deemed admissions that act as a merits-preclusive discovery sanction [in the absence

of] bad faith or callous disregard on the part of the party requesting withdrawal.” Time Warner,

Inc. v. Gonzalez, 441 S.W.3d 661, 665 (Tex. App.—San Antonio 2014, pet denied) (citing Maino

v. King, 355 S.W.3d 629, 634 (Tex. 2011) (per curiam)). “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 442.

Although the trial court has discretion in deciding whether to allow a party to withdraw

deemed admissions, due-process concerns arise when deemed admissions are used to preclude

presentation of the merits of the case. Time Warner, Inc., 441 S.W.3d at 665 (citing Wheeler,

157 S.W.3d at 443). When deemed admissions act as a merits-preclusive sanction, good cause

will exist to withdraw the deemed admissions unless the trial court finds the failure to timely

respond was the result of bad faith or callous disregard on the part of the party requesting

withdrawal. Id. Thus, the movant is “required [to make] a showing of ‘flagrant bad faith or callous

disregard for the rules’ to substantiate a summary judgment based solely on deemed admissions.”

Marino v. King, 355 S.W.3d 629, 633 (Tex. 2011) (quoting Wheeler, 157 S.W.3d at 443) (holding

due process bars merits-preclusive sanctions unless there is a showing of bad faith or callous

disregard for the rules of civil procedure). “Requests for admission are intended to simplify trials

by ‘addressing uncontroverted matters or evidentiary ones like the authenticity of documents.”

Time Warner, Inc., 441 S.W.3d at 665 (quoting Wheeler, 157 S.W.3d at 443). “They are not

intended to require a defendant to admit the validity of a plaintiff’s claims or concede his

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defenses.” Time Warner, Inc., 441 S.W.3d at 665 (quoting Marino, 355 S.W.3d at 632). “The

discovery rules were not designed as traps for the unwary, nor should we construe them to prevent

a litigant from presenting the truth.” Stelly, 927 S.W.2d at 622. “Using deemed admissions as the

basis for summary judgment therefore does not avoid the requirement of flagrant bad faith or

callous disregard, the showing necessary to support a merits-preclusive sanction; it merely

incorporates the requirement as an element of the movant’s summary judgment burden.” Marino,

355 S.W.3d at 634.

Application

The State relied on Garcia’s deemed admissions to prove the elements of its claim: (1) the

seizing officers had probable cause that the seized assets were contraband; and (2) the seized

property is, in fact, contraband. $132,265.00 in U.S. Currency v. State, 409 S.W.3d 17, 23 (Tex.

App.—Houston [1st Dist.] 2013, no pet.). The State did not use the admissions to address

uncontroverted matters or to authenticate documents, but instead used them as evidence that Garcia

admitted the validity of the State’s claim and conceded his defense as an innocent owner.

Therefore, the showing of bad faith or callous disregard became an element of the State’s summary

judgment burden. Marino, 355 S.W.3d at 634.

At the hearing on the motion for summary judgment, Garcia’s attorney argued he did not

timely respond to the admissions because he was unable to get in contact with Garcia because

Garcia was out of town for work and there was a scheduling mistake with regards to his work

schedule. In response to this excuse, the State did not make any showing of bad faith or callous

disregard. Because the record contains no evidence of flagrant bad faith or callous disregard for

the rules, good cause exists for withdrawal. Also, there is nothing in the record to suggest the State

is unable to prepare for trial without the admissions and no evidence that their withdrawal will

cause the State undue prejudice. In its brief, the State contends it will be unduly prejudiced if the

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admissions are withdrawn but it fails to explain how it would be prejudiced. Requiring the State

to prove the elements of its claim, rather than allowing it to rely on deemed admissions, does not

prejudice the State; it simply requires the State to meet its burden of proof. Lastly, the

“[p]resentation of the merits is not served when ‘the case is decided on deemed (but perhaps

untrue) facts . . . .’” Time Warner, Inc., 441 S.W.3d 661, 669 (quoting Wheeler, 157 S.W.3d at

443 n.2). Because the State failed to prove the essential element of bad faith or callous disregard

at the summary judgment hearing, the trial court erred in denying Garcia’s motion to withdraw

and in granting the State’s motion for summary judgment based on the deemed admissions.

Garcia’s second issue is sustained.

CONCLUSION

The trial court’s judgment is reversed and the cause is remanded to the trial court for a new

trial.

Rebeca C. Martinez, Justice

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