Court Opinion

ID: 9635849
Source: CourtListenerOpinion
Date Created: 2023-08-22 14:07:58.543276+00
Date Added: 2024-06-11T18:09:37.644753
License: Public Domain

DEYANY, Justice,
dissenting.
I respectfully disagree with the majority opinion. The majority reverses a judgment of a trial court, not based upon the merits, *206but because of a technical point that the trial court obviously corrected.
The pertinent facts necessary for this dissent are simply that City National Bank of Irving (CNB), appellee, is a new entity which purchased certain assets from the Federal Deposit Insurance Corporation (FDIC) as receiver for First National Bank of Irving, a defunct bank which was a party to the contracts underlying this lawsuit. The other party to the contracts was Fiduciary Mortgage Company, appellant. Fiduciary filed a lawsuit against CNB alleging that the “defendant” had entered into a series of contracts with Fiduciary. Nowhere in its pleadings or evidence does Fiduciary specifically state that it contracted with CNB. Fiduciary’s entire case is predicated upon an inference drawn by the majority that Fiduciary had stated a cause of action against CNB, but rejected by the trial court. CNB denied the allegations and fully explained in its answer that Fiduciary had sued the wrong party.
The problem that confronts the majority began on May 26,1987, after suit was filed, when the trial court granted the motion of Fiduciary for sanctions. That motion was the result of a breakdown in arrangements between CNB and Fiduciary wherein CNB had assembled documents evidencing the fact that it was not the party to the contracts sued upon and had supposedly given such documents to Fiduciary’s attorney. For whatever reasons the trial judge then believed, the sanction imposed on May 26, 1987, was the striking of CNB’s pleadings. While I would hold that such sanction was a harsh result under the circumstances, an abuse of discretion, and judicially offensive to me, nevertheless the trial court proceeded to trial obviously modifying its order by examining the evidence which bore upon both liability and damages. I say “obviously” because the trial court’s actions clearly indicated it changed its mind about a full imposition of the sanction.
The trial court made findings of fact and conclusions of law in order to reach a just result. The court found that the contracts were with First National Bank of Irving, not with CNB. The trial court further traced the insolvency of First National Bank of Irving, the declaration of insolvency by the FDIC, and the purchase of certain assets by CNB from the FDIC. The trial court concluded:
The FDIC loans under which Fiduciary seeks to recover loan servicing fees are not assets of CNB Irving, and do not, therefore, give rise to any liability on the part of CNB Irving for payment to Fiduciary of those loan servicing fees.
A trial judge has complete control of the cause before him. He has extraordinary powers. He may issue one order, not follow it, and proceed in a manner which completely or partially vacates that order. The sum total of his actions may then be reviewed by an appellate court to determine if there has been an abuse of discretion. Galbraith v. Galbraith, 619 S.W.2d 238, 241 (Tex.Civ.App.— Texarkana 1981, no writ). A trial court has continuing control of an interlocutory order with power to set it aside. Kone v. Security Finance Co., 158 Tex. 445, 313 S.W.2d 281, 286 (1958). The sanction ordered by the trial court in the instant case does not remain offensive when the court acts in a manner that modifies its own order in an effort to achieve justice.
Further, if liability is admitted in a default judgment case since no answer is filed, the proof of damages may yet depend on a review of the underlying contract in order to measure damages. How else can a plaintiff prove how much is owed in servicing fees, in a case such as this one, without looking at the contract which offers the measure of damages? The contract then becomes evidence which may belie liability.
In my examination of the record, I note that Fiduciary (the plaintiff at trial) introduced evidence consisting only of its own summary of loans, omitting any indication of the name of the obligor for the servicing fees. Indeed, the record reveals that there were no contracts with CNB. This sole evidence by Fiduciary is misleading. It could be a list of loans totally unrelated to the case being tried. Indeed, it is a list of loans with First National Bank of Irving rather than with CNB. It is apparent that the trial court found Fiduciary’s evidence incomplete. In any event, the evidence is insufficient because it appears to be a sum*207mary prepared by Fiduciary and does not indicate that the summary is with respect to any loans made by any particular bank. The summary fails to establish the damages suffered by Fiduciary from loans made by CNB. On the other hand, the defendant (CNB) introduced in evidence the very contracts underlying Fiduciary’s own summary. This evidence clearly shows that the contracts were with First National Bank of Irving, a defunct entity.
In a default judgment case, which is similar to one where a defendant’s answer has been struck, great care must be exercised by a trial court. The “objective of [the Texas] rules of civil procedure is to obtain a just, fair, equitable and impartial adjudication of the rights of litigants.” The “rules shall be given a liberal construction.” TEX.R.CIV.P. 1. The rules were not written to achieve unjust results apparent on the face of the record. The trial judge in this instance made every effort to expedite the trial, but at the same time exercised proper discretion to achieve a fair result. It is obvious that CNB is not liable for any damages based on the contracts sued upon.
I strongly dissent and would affirm the judgment of the trial court.