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explaining that appellate court may take judicial notice of its own records in same or related proceedings involving same or nearly same parties
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NO. 14-18-00746-CV
08-31-2020
Wilma REYNOLDS, Appellant v. QUANTLAB TRADING PARTNERS US, LP, Quantlab Incentive Partners I LLC, Quantlab Financial LLC and David Reynolds, Appellees
Appellant Wilma Reynolds ("Wilma") appeals the trial court's final judgment dismissing all of Wilma's claims, signed on August 21, 2018, which incorporates previous orders (1) granting the Rule 91a motions to dismiss of appellees Quantlab Trading Partners, U.S., LP; Quantlab Incentive Partners I, LLC; Quantlab Financial, LLC (the "Quantlab Defendants"), and David Reynolds ("David") and (2) awarding the Quantlab Defendants attorney's fees and costs. See Tex. R. Civ. P. 91a.1 (authorizing party to seek dismissal of cause of action on ground that it has no basis in law or fact and requiring the award of attorney's fees and costs to the prevailing party). Wilma also appeals the trial court's denial of her motions to compel discovery from the Quantlab Defendants and David. We reverse the judgment and remand this case to the trial court for further proceedings.
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY
A. PLEADING ALLEGATIONS
In reviewing a motion to dismiss under Rule 91a, a trial court is required take the allegations in the plaintiff's petition as true. See Tex. R. Civ. P. 91a.1. Wilma's original petition ("Wilma's Petition") alleges the following facts, which for purposes of this appeal of the dismissal under Rule 91a, we take as true.
Wilma and David were married in 1997, and during their marriage David began employment with Quantlab Financial, LLC ("QFL"), which paid David a base salary and substantial bonuses. As a benefit of his QFL employment, David participates with QFL in two bonus-generating entities, (1) Quantlab Trading Partners US, LP ("QTP") and (2) Quantlab Incentive Partners I, LLC ("QIP").
David petitioned for divorce in 2008. During the divorce proceedings, Wilma propounded numerous discovery requests to David and QFL seeking information about David's QTP, QIP, and QFL bonuses. David produced information relating to the QFL bonuses he received, his income, and produced the agreements concerning QIP. However, David and QFL objected and filed motions for protection in response to Wilma's discovery requests relating to David's QTP bonuses, QIP bonuses, and accrued QFL bonuses. The trial court sustained David's and QFL's objections to discovery and granted their motions for protection.
On April 22, 2009, the trial court conducted the property-division trial without the QTP partnership agreements, QTP financial statements, QIP financial statements, and other material financial information about the estate's bonuses being produced to Wilma. At the trial, David testified to the extent and value of certain marital assets, but omitted the value of the estate's QTP bonuses, QIP bonuses, and QFL accrued bonuses. Likewise, Tim Mclnturf, counsel for Quantlab, testified at the trial, but failed to disclose the value, nature, location or extent of the estate's QTP bonuses, QIP bonuses, and QFL accrued bonuses. Both David's and Quantlab's position at trial was that David's interest, including bonuses in QTP and QIP, is only equal to his capital contribution of $600,000 in QTP and his capital contribution of $5,274.50 in QIP because those interests have yet to vest. David and Quantlab grossly misrepresented the value of David's QTP, QIP and/or QFL accrued bonuses by concealing material financial information (e.g. , balance sheets and other financial statements) in connection with providing false and misleading testimony. At the conclusion of the trial, the trial court awarded David the estate's entire interest in QTP and QIP, which includes the estate's interest in investment accounts that held the estate's accrued bonuses/funds. The trial court also awarded David the estate's accrued QFL bonuses.
After the divorce decree was signed in 2009, financial information relating to the estate's QTP bonuses was produced in camera to Judge Hufstetler for inspection. The following documents were filed in camera : (1) David Reynolds's (Unredacted) Limited Partnership Agreement for Quantlab Trading Partners US, LP; (2) the written Agreement between Quantlab Trading Partners US, LP and Quantlab Trading Partners, LP; and (3) the 2009 and 2010 Audited Financial Statements for Quantlab Trading Partners US, LP and Quantlab Trading Partners, LP. Judge Hufstetler ruled that these documents contained "no relevant' information relating to David's QTP interest, income, or bonuses.
Post-decree discovery orders were appealed to this court as part of the appeal of the final decree. See Reynolds v. Reynolds , No. 14-09-00720-CV, 2010 WL 3418209, at *4 (Tex. App.—Houston [14th Dist.] Aug. 31, 2010, pet. denied) (mem. op.).
After the divorce decree was signed, certain QIP account information was produced that evidences that the estate had an interest in a QIP account.
Upon information and/or belief, on April 22, 2009 there was a significant amount of estate funds on deposit in accounts controlled by QIP and the value of those estate funds have not been disclosed to Wilma. Upon information and/or belief, David has deferred his accrued QFL bonuses and concealed the value of those bonuses from Wilma. In sum, the estate's QTP, QIP, and QFL bonuses—which Wilma believes is substantial—were awarded entirely to David because of fraud and wrongful acts by David and the Quantlab Defendants.
Wilma's inability to prevent the bonuses awarded to David was not a result of any fault or negligence of Wilma. Wilma was forced to rely on David and Quantlab's valuation of the estate's bonuses because she continues to have no access to the financial information necessary to verify the value of the estate's bonuses.
David and the Quantlab Defendants have engaged in an ongoing conspiracy or activity to conceal the true value of the estate's bonuses and defraud Wilma of her share of the estate's bonuses. This activity includes liquidating approximately $700 million of funds that QTP had invested in the Master Fund and transferring those funds to Quantlab Capital Management, Ltd. to further conceal the estate's QTP bonuses.
Wilma's petition asserts tort causes of action against David and the Quantlab Defendants for common-law fraud, fraud by nondisclosure, negligent misrepresentation, violations of the Theft Liability Act, conversion, money had and received, and civil conspiracy. She seeks actual, liquidated, and exemplary damages.
B. PROCEDURAL HISTORY
Wilma served written discovery with her petition seeking information about the community estates' bonuses and other community-estate assets. David and the Quantlab Defendants filed motions for a protective order. Wilma filed motions to compel discovery from David and the Quantlab Defendants. The trial court signed an order denying Wilma's motions to compel on August 21, 2018.
The Quantlab Defendants filed a motion to dismiss all of Wilma's claims pursuant to Rule 91a, which David joined. Tex. R. Civ. P. 91a.1. On June 21, 2018, the trial court signed an interlocutory order dismissing all of Wilma's claims against the Quantlab Defendants with prejudice. The Quantlab Defendants filed a motion for award of their attorney's fees, with evidence attached to prove the amount of attorney's fees. On July 10, 2018, David sought a hearing on his joinder of the Quantlab Defendants' motion to dismiss by filing a "Motion for Consideration and Entry of Order on Rule 91A Motion to Dismiss." On July 24, 2018, the trial court signed interlocutory orders dismissing all of Wilma's claims against David with prejudice and ordering Wilma to pay the Quantlab Defendants' attorney's fees and costs in the amount of $36,757.87. On August 21, 2018, the trial court signed a final judgment that Wilma take nothing.
II. STANDARD OF REVIEW
Under Texas Rule of Civil Procedure 91a, "a party may move to dismiss a cause of action on the grounds that it has no basis in law or fact." Tex. R. Civ. P. 91a.1. As specified in the rule, a cause of action has no basis in law if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. Id. A cause of action has no basis in fact if "no reasonable person could believe the facts pleaded." Id. A motion to dismiss must identify each cause of action to which it is addressed and must state specifically the reasons the cause of action has no basis in law, no basis in fact, or both. Tex. R. Civ. P. 91a.2.
We review the trial court's rulings on the Rule 91a motions de novo. City of Dallas v. Sanchez , 494 S.W.3d 722, 724 (Tex. 2016) (per curiam) (quoting Tex. R. Civ. P. 91a.6); see also Tony's Barbeque & Steakhouse, Inc. v. Three Points Invs., Ltd. , 527 S.W.3d 686, 695 (Tex. App.—Houston [14th Dist.] 2017, no pet.). We look solely to the pleading and any attachments to determine whether the dismissal standard is satisfied. Estate of Savana , 529 S.W.3d 587, 592 (Tex. App.—Houston [14th Dist.] 2017, no pet.) ; Wooley v. Schaffer , 447 S.W.3d 71, 76 (Tex. App.—Houston [14th Dist.] 2014, pet. denied). To determine if the cause of action has a basis in law or fact, we construe the pleadings liberally in favor of the plaintiff, look to the pleader's intent, and accept as true the factual allegations in the pleadings. Wooley , 447 S.W.3d at 76.
Rule 91a permits motions to dismiss based on affirmative defenses "if the allegations, taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought." Bethel v. Quilling, Selander, Lownds, Winslett & Moser, P.C. , 595 S.W.3d 651, 656 (Tex. 2020) (quoting Tex. R. Civ. P. 91a.1). "Of course, some affirmative defenses will not be conclusively established by the facts in a plaintiff's petition. Because Rule 91a does not allow consideration of evidence, such defenses are not a proper basis for a motion to dismiss." Id.
Evidence is usually required to prove a collateral estoppel or res judicata defense. See Calabrian Corp. v. All. Specialty Chems., Inc. , 418 S.W.3d 154, 160 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (recognizing that "courts typically require that the party advocating collateral estoppel introduce at least the pleadings and judgment from the prior case"); Fed. Home Loan Mortg. Corp. v. Pham , 449 S.W.3d 230, 237 (Tex. App.—Houston [14th Dist.] 2014, no pet.) ("To prevail on a motion for summary judgment asserting res judicata, the movant must produce summary judgment evidence, including verified or certified copies of the judgment and pleadings from the earlier suit, sufficient to establish the applicability of res judicata as a matter of law").
III. ANALYSIS
Wilma's brief presents four issues for review, namely: (1) whether the trial court erred in granting the Quantlab Defendants' motion to dismiss; (2) whether the trial court erred by awarding the Quantlab Defendants attorney's fees and costs pursuant to the version of Rule 91a.7 then in effect; (3) whether the trial court erred in granting David's motion for consideration and entry of order on his motion to dismiss; and (4) whether the trial court erred in denying Wilma's motions to compel discovery.
Tex. R. Civ. P. 91a.7; 76 Tex. B.J. 222 (Tex. 2013, amended 2019).
A. MOTIONS TO DISMISS
David and the Quantlab Defendants moved for dismissal on two grounds, collateral estoppel and res judicata. The trial court judgment does not state the ground on which it granted dismissal, so we must determine if the trial court judgment may be upheld on either ground. As discussed below, we conclude that the facts alleged in Wilma's petition, when taken as true and construed liberally in Wilma's favor, do not establish that her claims are barred by collateral estoppel or res judicata. Therefore, the trial court erred in dismissing Wilma's claims under Rule 91a.
1. COLLATERAL ESTOPPEL
The doctrine of collateral estoppel, also known as issue preclusion, prevents a party from relitigating an issue that it previously litigated unsuccessfully. Calabrian Corp , 418 S.W.3d at 158. The doctrine "serve[s] the vital functions of bringing litigation to an end, maintaining stability of court decisions, avoiding inconsistent results, and promoting judicial economy." Id. at 157–58. Collateral estoppel is an affirmative defense, and the party asserting it bears the burden of proving that (1) the facts sought to be litigated in the second action were fully and fairly litigated in the first action; (2) those facts were essential to the judgment in the first action; and (3) the parties were cast as adversaries in the first action. Id. at 158. Whether collateral estoppel applies is a question of law. Id.
An issue decided in the first action must be identical to an issue in the second action. State & Cty. Mut. Fire Ins. Co. v. Miller , 52 S.W.3d 693, 697 (Tex. 2001) (per curiam). However, although the issue must be identical, the cause of action may be different in the second action. Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc. , 962 S.W.2d 507, 521 (Tex. 1998). "To satisfy the requirements of due process, it is only necessary that the party against whom the doctrine is asserted was a party or in privity with a party in the first action." Sysco Food Servs., Inc. v. Trapnell , 890 S.W.2d 796, 802 (Tex. 1994).
Wilma's fraud and conspiracy and other related claims are predicated on her pleading allegation that David and QTP, in the divorce action, "grossly misrepresented the value of David's QTP, QIP and/or QFL accrued bonuses by concealing material financial information ... in connection with providing false and misleading testimony." According to Wilma's petition, the value of David's interest in QTP and QIP were litigated in the divorce action, but Wilma's claims for David's and QTP's alleged fraudulent concealment of the bonuses were not litigated. Because the allegations stated in Wilma's petition do not establish that her fraud and conspiracy and other related claims were "fully and fairly litigated" in the divorce action, the trial court could not have properly dismissed her claims under Rule 91a based on collateral estoppel.
The Quantlab Defendants argue that collateral estoppel and res judicata apply based on our decision in Reynolds v. Reynolds , No. 14-15-00990-CV, 2017 WL 1366680 (Tex. App.—Houston [14th Dist.] Apr. 13, 2017, pet. denied) (mem. op.).
David also argues that collateral estoppel and res judicata bar Wilma's claims in the underlying action because Wilma's claims against David and the Quantlab Defendants for theft of property, conversion, money had and received, and civil conspiracy allegedly were litigated in prior proceedings, citing, among others, No. 14-10-00564-CV, In re Wilma Reynolds.
We need not consider the Quantlab Defendants' and David's allegations regarding what was litigated in prior proceedings because doing so would require us to improperly take judicial notice of these proceedings. Generally, our court may take judicial notice of its opinions and records in related proceedings involving the same parties. But Rule 91a.6 expressly prohibits the consideration of evidence and requires that the motion be decided based solely on the pleading of the cause of action. See Tex. R. Civ. P. 91a.6. A party may not rely on judicial notice in a Rule 91a proceeding because judicial notice is "a matter of evidence." See Harper v. Killion , 162 Tex. 481, 484, 348 S.W.2d 521, 523 (1961) (quoting Burtis v. Butler Bros. , 148 Tex. 543, 551, 226 S.W.2d 825, 830 (1950) ). For this reason, the First Court of Appeals declined to take judicial notice of certain evidence in reviewing a Rule 91a dismissal. See San Jacinto River Auth. v. Burney , 570 S.W.3d 820, 830 (Tex. App.—Houston [1st Dist.] 2018, pet. granted) ("Because Rule 91a expressly prohibits a court's consideration of evidence, and it expressly requires that the motion to dismiss be decided based solely on the pleadings, we decline to take judicial notice of the River Authority's proffered evidence"). We, likewise, decline to take judicial notice of the opinions and records in the related proceedings referenced by appellees in reviewing the trial court's orders of dismissal under Rule 91a.
An appellate court may take judicial notice of its own records in the same or related proceedings involving the same or nearly the same parties. See In re Chaumette , 456 S.W.3d 299, 303 n.2 (Tex. App.—Houston [1st Dist.] 2014, orig. proceeding) ; Douglas v. Am. Title Co. , 196 S.W.3d 876, 878 n.1 (Tex. App.—Houston [1st Dist.] 2006, no pet.).
2. RES JUDICATA
"Res judicata, or claims preclusion, prevents the re-litigation of a claim or cause of action that has been finally adjudicated, as well as related matters that, with the use of diligence, should have been litigated in the prior suit." Barr v. Resolution Tr. Corp. ex rel. Sunbelt Fed. Sav. , 837 S.W.2d 627, 628 (Tex. 1992). "The doctrine of res judicata in Texas holds that a final judgment in an action bars the parties and their privies from bringing a second suit ‘not only on matters actually litigated, but also on causes of action or defenses which arise out of the same subject matter and which might have been litigated in the first suit.’ " Compania Financiara Libano, S.A. v. Simmons , 53 S.W.3d 365, 367 (Tex. 2001) (quoting Barr , 837 S.W.2d at 630 ). "For res judicata to apply, there must be: (1) a prior final judgment on the merits by a court of competent jurisdiction; (2) identity of parties or those in privity with them; and (3) a second action based on the same claims that were raised or could have been raised in the first action." Citizens Ins. Co. of Am. v. Daccach , 217 S.W.3d 430, 449 (Tex. 2007). "Under the transactional approach followed in Texas, a subsequent suit is barred if it arises out of the same subject matter as the prior suit, and that subject matter could have been litigated in the prior suit." Id. (citing Barr , 837 S.W.2d at 631 ). A final judgment on an action extinguishes the right to bring suit on the transaction, or series of connected transactions, out of which the action arose. Id. "A determination of what constitutes the subject matter of a suit necessarily requires an examination of the factual basis of the claim or claims in the prior litigation. It requires an analysis of the factual matters that make up the gist of the complaint, without regard to the form of action. Any cause of action which arises out of those same facts should, if practicable, be litigated in the same lawsuit." Barr , 837 S.W.2d at 629. "Claim preclusion prevents splitting a cause of action." Id. Joinder of tort claims with a divorce suit is encouraged, when feasible. Twyman v. Twyman , 855 S.W.2d 619, 625 (Tex. 1993). Tort claims in divorce cases, like other civil actions, are subject to the principles of res judicata. Id. at 624.
Res judicata applies to the property division in a final divorce decree, just as it does to any other final judgment, barring subsequent collateral attack even if the divorce decree improperly divided the property. Baxter v. Ruddle , 794 S.W.2d 761, 762 (Tex. 1990) ("Res judicata applies even if the divorce decree improperly divided the property"); DeAcetis v. Whitley , No 14-08-00429-CV, 2010 WL 1077904, at *3 (Tex. App.—Houston [14th Dist.] Mar. 25, 2010, pet. denied) (mem. op.) (appellant's claims of fraud, conspiracy, and conversion which related to the determination of ownership of certain real property were barred by res judicata because such property was awarded to the defendant in the final divorce decree and appellant either did or could have asserted her claims in the divorce proceeding); Nelson v. Williams , 135 S.W.3d 202, 206 (Tex. App.—Waco 2004, pet. denied) (mem. op.) (holding res judicata barred claims for breach of fiduciary duty, fraud, civil conspiracy, and negligence because the underlying matter, i.e., fraud concerning the value of the community estate, could have been litigated in the divorce case).
However, our court has recognized that "the inquiry [for res judicata] is whether the claim, through exercise of reasonable diligence, should have been litigated in the previous case." Whitmire v. Greenridge Place Apartments , No. 14-09-01002-CV, 2011 WL 1413412, at *4 (Tex. App.—Houston [14th Dist.] Apr. 14, 2011, no pet.) (mem. op.) (citing Barr , 837 S.W.2d at 628 ). Thus, res judicata does not bar a claim of which the plaintiff was unaware and which could not have discovered through the exercise of due diligence in the first action.
For example, in Rangel v. Rangel , No. 02-05-411-CV, 2007 WL 291389, at *1 (Tex. App.—Fort Worth Feb. 1, 2007, no pet.) (mem. op.), the trial court approved the sale of a marital asset, the Northlake Supply Company, in a 2001 divorce proceeding between Susan Rangel and Gustavo Rangel and denied Susan's motion to set aside that sale; Susan did not appeal any part of the divorce decree. In July 2004, Susan filed an action alleging she was deceived and defrauded by the sale of Northlake. Susan argued that res judicata does not apply because material facts have come to light that were unknown to her at the time of the motion to set aside the sale and thus could not have been pled or brought before the court in the divorce proceeding. Susan testified she was unaware of Gustavo's use of Northlake's funds for personal expenses, the source of the funds Zimmerman used to purchase Northlake, Zimmerman's insider relationship and financial ability, Tatum's and Lennon's failure to audit and account for Northlake's expenses, and that no transfer of Northlake ever occurred. Id. at *4. The court of appeals held that res judicata did apply because:
Reasonable diligence by Susan at the time of the sale and prior to the October 2002 hearing would have revealed the facts upon which she relied for her claims against Appellees. By October 2002, Susan, had she sought discovery, could have determined any facts relating to the alleged impropriety surrounding the sale. The fact that Susan failed to avail herself of all appropriate discovery methods cannot now be the reason why Appellees must defend against claims that should have already been brought.
Id.
Wilma's petition, standing alone, does that establish that her claims against David and the Quantlab Defendants are barred by res judicata. In particular, her petition does not establish the existence of a prior final judgment on the merits by a court of competent jurisdiction and of a second action based on the same claims that were raised or could have been raised in the first action. See Daccach , 217 S.W.3d at 449. As discussed above, we may not take judicial notice of prior proceedings between Wilma and David in this appeal of a Rule 91a dismissal.
Additionally, the party relying on the affirmative defense of res judicata must prove "identity of parties or those in privity with them." Travelers Ins. Co. v. Joachim , 315 S.W.3d 860, 862 (Tex. 2010). Parties can be in privity in three ways: (1) they can control an action even if they are not parties to it; (2) their interest can be represented by a party to the action; or (3) they can be successors in interest, deriving their claims through a party to the prior action. Mayes v. Stewart , 11 S.W.3d 440, 449 (Tex. App.—Houston [14th Dist.] 2000, pet. denied), disapproved of on other grounds by Agar Corp., Inc. v. Electro Circuits Int'l, LLC , 580 S.W.3d 136 (Tex. 2019). Privity exists if the parties share an identity of interests in the basic legal right that is the subject of the litigation. Espeche v. Ritzell , 123 S.W.3d 657, 667 (Tex. App.—Houston [14th Dist.] 2003, pet. denied). Privity is not established by the mere fact that the persons may happen to be interested in the same question or in proving the same facts. Ayre v. J.D. Bucky Allshouse, P.C. , 942 S.W.2d 24, 27 (Tex. App.—Houston [14th Dist.] 1996, writ denied). For example, in Mayes , our court held that Ms. Mayes could not properly assert a res judicata defense because: "We fail to see how, Ms. Mayes, as an unrelated third party, can be in privity with either Mr. Stewart or Mrs. Stewart in so far as the divorce itself is concerned. Privity is not established by the mere fact that the persons may happen to be interested in the same question or in proving the same facts." Mayes , 11 S.W.3d at 449.
The allegations in Wilma's petition do not establish that the Quantlab Defendants were parties to the divorce action between Wilma or David or that they were in privity with either Wilma or David. Wilma's Petition alleges that David was an employee of QFL and that as a benefit of that employment, he was entitled to participate with QFL in two bonus generating entities, QTP and QIP. These allegations are not sufficient to establish privity because they do not show that the Quantlab Defendants controlled the divorce action, that their interests were represented by David, or that they are successors to David's interest. See Mayes , 11 S.W.3d at 449.
For these reasons, the trial court could not have properly dismissed Wilma's claims under Rule 91a based on res judicata.
Therefore, the trial court erred by (1) dismissing Wilma's claims under Rule 91a and (2) awarding the Quantlab Defendants attorney's fees and costs under Rule 91a.
B. MOTIONS TO COMPEL
The record shows that the trial court signed an order denying Wilma's motions to compel on August 21, 2018, after the trial court had dismissed Wilma's claims against the Quantlab Defendants on June 21, 2018 and against David on July 24, 2018. The trial court's order does not specify its reasons for denying the motions to compel, but we assume that the trial court did so because it had already signed orders dismissing all of Wilma's claims. Because we are reversing the dismissal of Wilma's claims, we also reverse the order denying Wilma's motions to compel and remand the motions to compel for further proceedings.
IV. CONCLUSION
Because the allegations stated in Wilma's Petition do not establish that her claims are barred by collateral estoppel or res judicata, we reverse the trial court's final judgment dismissing all of Wilma's claims, which incorporates previous orders (1) granting the Rule 91a motions to dismiss of the Quantlab Defendants and David and (2) awarding the Quantlab Defendants attorney's fees and costs, and we reverse the trial court's order denying the motions to compel. We remand the case for further proceedings.
Wilma's brief presents additional arguments that we do not address because their resolution is not necessary to the disposition of this appeal, given that we reverse the orders of dismissal and the order awarding attorney's fees and costs based on the issues that are addressed in this opinion. See Tex. R. App. P. 47.1.
( Spain, J., concurring and dissenting).
CONCURRING AND DISSENTING OPINION
Charles A. Spain, Justice, concurring and dissenting. While I concur that the trial court erred in dismissing all of Wilma Reynolds's claims, that the trial court's final judgment should be reversed, and that the case should be remanded for further proceedings, I cannot join the majority opinion to the extent that it suggests the trial court's decision denying her motions to compel should be reversed separately and apart from the trial court's final judgment, and I dissent to the portion of this court's judgment which explicitly treats the motions to compel as not merged into the trial court's final judgment.
The court thinks that the denial of the motions to compel is an order separate from the trial court's final judgment, although both the order and the final judgment were signed on the same day. By doing so, the court unnecessarily injects significant uncertainty into a day that the law necessarily presumes to be considered as whole and not divisible—judgment day.
The majority opinion states (1) that it reverses the judgment and remands for further proceedings and (2) that it reverses both the judgment and the denial order and remands for further proceedings. To the extent that the opinion is not clear, the judgment expressly states: "We therefore REVERSE the judgment of the court below and the order denying appellant's motions to compel and REMAND the cause for proceedings in accordance with the court's opinion."
Judgment day in this case was August 21, 2018. On that day, the trial court signed a take-nothing judgment that contained Lehmann v. Har-Con Corp. unambiguous finality language. See 39 S.W.3d 191, 206 (Tex. 2001). On judgment day, the trial court also signed an order denying appellant Wilma Reynolds's (1) May 4, 2018 motion to compel discovery from the three Quantlab Defendants and (2) July 9, 2018 motion to compel discovery from David Reynolds. The trial court did not note the hour, minute, or further subdivision of time it signed either the final judgment or the discovery order, and there is no indication in the two orders that the trial court either signed them in a specific sequence or had any intention that they were anything other than orders signed on judgment day.
The final judgment and the order denying the motions to compel do bear file marks from the district clerk: "8/10/2019 4:02 PM" for the final judgment and "8/9/2019 6:42 PM" for the order denying the motions to compel. Obviously, these file marks have nothing to do with the timing of the trial judge signing the final judgment and the order, and the Texas Rules of Civil Procedure do not require a clerk to file mark judgments and orders. Even if they were file marked after the trial judge signed them, those file marks would not necessarily reflect the timing of the trial judge's signature.
This court's opinion suggests—with no discussion or citation to authority—that the timing or sequence of signing of orders on judgment day has independent legal significance, creating, perhaps unintentionally, the new concepts of "judgment hour," "judgment minute," and so on. I not only generally believe these temporal subdivisions of judgment day have no meaning as legally significant concepts, but also think that creating them and engaging in linear temporal analysis in interpreting the final judgment is error. Jurisprudence in Texas and in its Spanish, Mexican, and English antecedents predates precise timekeeping. The fact that standard time is easy to ascertain today does not mean that it was easy in the nineteenth century. People did know the day, however, and the idea that the hour and minute, much less the second, on judgment day had independent legal significance is certainly not reflected in procedural statutes and court rules. The fact that today anyone with a mobile phone can easily find the current Coordinated Universal Time (www.time.gov) does not change the underlying principle that the relevant time for a final judgment is the day.
Put another way, I believe the trial judge's actions on judgment day should be reviewed as if the trial judge were writing from the third-person omniscient point of view—everything the trial judge signs on judgment day should, if possible, be construed to be part of the one final judgment signed on that day.
The current Texas Rules of Civil Procedure and Texas Rules of Appellate Procedure rarely use "time" to refer to a specific portion of a day. Nowhere do they define "judgment day." What is important for a judgment under Texas Rule of Civil Procedure 306a is that it be signed and dated:
See, e.g. , Tex. R. Civ. P. 16 ("Every officer or authorized person shall endorse on all process and precepts coming to his hand the day and hour on which he received them, the manner in which he executed them, and the time and place the process was served and shall sign the returns officially."); 21(f)(5) ("Unless a document must be filed by a certain time of day , a document is considered timely filed if it is electronically filed at any time before midnight (in the court's time zone) on the filing deadline."); 24 ("When a petition is filed with the clerk he shall indorse thereon the file number, the day on which it was filed and the time of filing , and sign his name officially thereto."); 67 ("When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. In such case such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made by leave of court upon motion of any party at any time up to the submission of the case to the Court or jury, but failure so to amend shall not affect the result of the trial of these issues; provided that written pleadings, before the time of submission , shall be necessary to the submission of questions, as is provided in Rules 277 and 279."); 74 ("The filing of pleadings, other papers and exhibits as required by these rules shall be made by filing them with the clerk of the court, except that the judge may permit the papers to be filed with him, in which event he shall note thereon the filing date and time and forthwith transmit them to the office of the clerk."); 107 ("The return, together with any documents to which it is attached, must include the following information: ... (4) the date and time the process was received for service ...."); 114 ("If issued from the district or county court, the citation shall command such parties to appear and answer at or before 10 o'clock a.m. of the first Monday after the expiration of 42 days from the date of issuance thereof, specifying the day of the week, the day of the month, and the time of day the defendant is required to answer. If issued from the justice of the peace court, such citation shall command such parties to appear and answer on or before the first day of the first term of court which convenes after the expiration of 42 days from the date of issue thereof, specifying the day of the week, and the day of the month, that such term will meet."); 162 ("At any time before the plaintiff has introduced all of his evidence other than rebuttal evidence, the plaintiff may dismiss a case, or take a non-suit, which shall be entered in the minutes."); 166a(a) ("A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory judgment may, at any time after the adverse party has appeared or answered , move with or without supporting affidavits for a summary judgment in his favor upon all or any part thereof."); 166a(b) ("A party against whom a claim, counterclaim, or cross-claim is asserted or a declaratory judgment is sought may, at any time , move with or without supporting affidavits for a summary judgment in his favor as to all or any part thereof."); 239 ("Upon such call of the docket, or at any time after a defendant is required to answer, the plaintiff may in term time take judgment by default against such defendant if he has not previously filed an answer, and provided that the return of service shall have been on file with the clerk for the length of time required by Rule 107. "); 279 ("When a ground of recovery or defense consists of more than one element, if one or more of such elements necessary to sustain such ground of recovery or defense, and necessarily referable thereto, are submitted to and found by the jury, and one or more of such elements are omitted from the charge, without request or objection, and there is factually sufficient evidence to support a finding thereon, the trial court, at the request of either party, may after notice and hearing and at any time before the judgment is rendered , make and file written findings on such omitted element or elements in support of the judgment.") (emphases added).
See, e.g. , Tex. R. App. P. 4.3(a) ("If a judgment is modified in any respect while the trial court retains plenary power, a period that, under these rules, runs from the date when the judgment is signed will run from the date when the modified judgment is signed. "); 4.3(b) ("If the trial court corrects or reforms the judgment under Texas Rule of Civil Procedure 316 after expiration of the trial court's plenary power, all periods provided in these rules that run from the date the judgment is signed run from the date the corrected judgment is signed for complaints that would not apply to the original judgment. "); 9.2(a)(2) ("A document is filed in an appellate court by delivering it to: (1) the clerk of the court in which the document is to be filed; or (2) a justice or judge of that court who is willing to accept delivery. A justice or judge who accepts delivery must note on the document the date and time of delivery , which will be considered the time of filing, and must promptly send it to the clerk."); 9.2(c)(4) ("Unless a document must be filed by a certain time of day , a document is considered timely filed if it is electronically filed at any time before midnight (in the court's time zone) on the filing deadline. "); 10.1(b) ("A party may file a response to a motion at any time before the court rules on the motion or by any deadline set by the court."); 34.5(b)(1) ("At any time before the clerk's record is prepared, any party may file with the trial court clerk a written designation specifying items to be included in the record."); 34.6(b)(1) ("At or before the time for perfecting the appeal, the appellant must request in writing that the official reporter prepare the reporter's record."); 42.2(a) ("At any time before the appellate court's decision, the appellate court may dismiss the appeal upon the appellant's motion."); 42.3 ("Dismissal or affirmance may occur if the appeal is subject to dismissal: ... (c) because the appellant has failed to comply with a requirement of these rules, a court order, or a notice from the clerk requiring a response or other action within a specified time. ") (emphases added).
1. Beginning of Periods. The date of judgment or order is signed as shown of record shall determine the beginning of the periods prescribed by these rules for the court's plenary power to grant a new trial or to vacate, modify, correct or reform a judgment or order and for filing in the trial court the various documents that these rules authorize a party to file within such periods including, but not limited to, motions for new trial, motions to modify judgment, motions to reinstate a case dismissed for want of prosecution, motions to vacate judgment and requests for findings of fact and conclusions of law; but this rule shall not determine what constitutes rendition of a judgment or order for any other purpose.
2. Date to Be Shown. Judges, attorneys and clerks are directed to use their best efforts to cause all judgments, decisions and orders of any kind to be reduced to writing and signed by the trial judge with the date of signing stated therein. If the date of signing is not recited in the judgment or order, it may be shown in the record by a certificate of the judge or otherwise; provided, however, that the absence of a showing of the date in the record shall not invalidate any judgment or order.
The adoption of Rule 306a marked a significant change in civil procedure, and the rule still reflects a cautionary statement that oral rendition of judgment in open court is still relevant for some purposes.
Reading together Texas Rules of Civil Procedure 301, 305, and 306a, there should be one final judgment, typically in a single document prepared by the parties and signed by the trial judge with the date of signing stated in the judgment. Rule 306a does not require anything more specific than the date, and that date of judgment, or "judgment day"—not the specific time of day—determines the timing of post-judgment proceedings in the trial court and perfection of an appeal. Tex. R. Civ. P. 306a ; Tex. R. App. P. 25.1, 26.1.
The court cites no authority that restricts the scope of the final judgment signed on August 21, 2018 from merging all actions taken in the case before and on that judgment day into the final judgment. If such authority were to exist, what would it do to the legal principles of merger and bar other than create chaos on a day designed to bring closure?
See Bonsmara Nat. Beef Co., LLC v. Hart of Tex. Cattle Feeders, LLC , 603 S.W.3d 385 (Tex. 2020) ("[O]ur rule has long been that ‘a party against whom an interlocutory [order] has been rendered will have his right of appeal when ... the same is merged in a final judgment disposing of the whole case.’ " (citing Teer v. Duddlesten , 664 S.W.2d 702, 704 (Tex. 1984) )).
Governments create courts to provide for the pacific resolution of disputes and to bring an end to those disputes. While courts cannot provide perfection, they can provide finality. That finality is critical to the maintenance of an orderly society. People have other things to do in life besides engaging in endless litigation. Or at least I hope they do. Accordingly, few things in civil law are more fundamental than the final judgment signed on judgment day.
Today this court without explanation muddles the law of merger and bar, creating needless confusion for those who read and cite our opinions. Justice Calvert admonished judges to take great care in drafting judgments. We should.