Opinion

Opinion issued April 28, 2011

In The

Court of

Appeals

For The

First District

of Texas

————————————

NO. 01-10-00169-CV

———————————

Microcheck Systems, Inc., Microcheck Solutions, Inc., and John

Manning ,

Appellants

V.

Mike Smith,

individually and d/b/a CMS Technology a/k/a CMS Technologies, and Michoice

technology Systems, Inc. , Appellees

On Appeal from the 125th District Court

Harris County, Texas

Trial Court Case No. 2004-59790

MEMORANDUM OPINION

Appellants

MicroCheck Systems, MicroCheck Solutions, Inc., and John Manning (collectively,

“MicroCheck”) challenge the trial court’s denial of their motion to reinstate

following dismissal for want of prosecution.

We reverse the trial court’s judgment.

BACKGROUND

The trial court dismissed the

underlying case after no one appeared at a docket call on January 4, 2010. This ruling was memorialized in a written

order on that date stating that the “Court presumes that Plaintiff has no

intention to further prosecute this case.”

1. MicroCheck’s Motions to Reinstate

On January 12, 2010, MicroCheck

filed an unverified “Plaintiff’s Motion to Reinstate after Dismissal without

Prejudice,” stating that MicroCheck was “in the process of having new counsel

substituted in for them and did not know of the pre-trial conference and former

counsel, Scarlett May, was under the impression that the Motion for

Substitution had been filed and approved, as new counsel had been working on a

Petition for Mandamus to file in this case so no one appeared at the pre-trial hearing

conference.” The motion was signed by

MicroCheck’s new attorney, Patrick Hubbard, and accompanied by an affidavit

from him, stating:

Plaintiffs

. . . were in the process of having new counsel substitute in for them and did

not know of the pre-trial conference, and former Counsel, Scarlett May, was

under the impression that the Motion for Substitution of Counsel had been filed

and approved, as new counsel had been working on a Petition for Mandamus to

file in the case, so no one appeared at the pre-trial conference. It was learned on this date that the cause

had been dismissed for want of prosecution.

Movant would never have voluntarily allowed the case to be dismissed, as

they have been pursuing the case since it was filed in 2004.

In response, appellees Mike Smith,

individually and d/b/a CMS Technology a/k/a CMS Technologies and Michoice

Technology Systems, Inc. (collectively, “Michoice”), argued that (1)

MicroCheck’s filing did not establish that its counsel’s failure to attend was

not due to conscious indifference, as required to support reinstatement, and (2)

Hubbard’s affidavit improperly attempts to explain why Scarlett May,

MicroCheck’s attorney of record, did not attend the hearing, without

demonstrating any personal knowledge on Hubbard’s part about why May did not

attend.

MicroCheck, on February 2, 2010,

filed “Plaintiff’s Second Motion to Reinstate after Dismissal Without

Prejudice,” containing the same factual assertions as its first motion and

attaching an affidavit by May stating:

I

was counsel for Plaintiffs . . . most of 2009.

I personally attended every hearing and motion that was scheduled during

my time of representation during 2009 until the docket call scheduled for

January 4, 2010. In early December, 2009

it was decided between me and my clients that they would substitute counsel as

they desired to file a Mandamus action concerning a ruling on a Motion to

Dismiss some of Plaintiffs’ causes of action, which they felt were state causes

of actions, and I did not want to participate in that appellate matter. I was informed that attorney Patrick G.

Hubbard would be the new counsel, and I agreed to allow him to substitute

counsel with my clients’ approval. A

Motion and Order for Substitution for Counsel was sent to me before the

Christmas holiday. I had approved the

motion with my signature, but the original of the document did not get sent to

Patrick Hubbard’s office immediately. I have determined that the Motion and

Order for Substitution was mailed to my client, instead, for their signature

and approval first, and then was delivered to Patrick G. Hubbard’s office. I assumed that the filing of the motion would

be expedited and handled without any more effort on my part because of the upcoming

docket call and trial date. I did not

learn until January 5, 2010 that the Motion for Substitution had not been

filed. My thinking was that once I

signed the Motion and Order for Substitution that I was off the hook on the

representation of Plaintiffs and I erroneously assumed that someone from Mr.

Hubbard’s office would appear at the docket call and proceed on with trial

matters, or that the Mandamus would be filed in the Court of Appeals and the

trial would be delayed. My

communications were with my clients and not with Mr. Hubbard. My failure to appear at the docket call was

not intentional and was not a result of conscious indifference, but as a result

of wrongly believing that new counsel would take over all representation

immediately after I signed off on the Motion for Substitution of Counsel. I would never have intentionally failed to

appear at any court hearing or docket call while I was still counsel of

record. On January 5, 2010 I received

correspondence from my Microcheck clients inquiring as the status of the docket

call. It was at that time that I spoke

to the trial coordinator that I learned that I was still Plaintiffs’ counsel,

and that no one from either side had appeared at docket call. There have been a number of docket calls on

this case since it first began in 2004, and on each occasion, it appears that

counsel for Plaintiffs always attended.

My

failure to attend docket call was a mistake on my part, and not intentional,

and certainly not the result of any conscious indifference. I am asking this Honorable Court to please

reinstate the Plaintiffs’ case.

2. The Reinstatement Hearing

At the February 3, 2011 hearing,

the court noted that it wanted to hear from May because she was still the

attorney of record. She testified,

consistent with her affidavit, that it was not her “intention to just not show

up.” It was her understanding that she

was “off the case.” She explained that,

because of some disagreements about strategy with her client culminating over

several months, she told her client at the beginning of December that she

wished to withdraw as their counsel, and agreed to stay on until they could

locate substitute counsel. May’s clients

sent her a motion to substitute Hubbard, MicroCheck’s new counsel, in

mid-December. She signed the motion and

sent it back to her clients, with the understanding that she was “off the case

then.” She conceded that, in hindsight,

she should have contacted Hubbard to coordinate and ensure that he planned to

appear at docket call. Finally, she

testified that she would never intentionally just not show up.

At the hearing, Michoice argued

that the court had the discretion to deny the motion for reinstatement because

of inconsistencies between Hubbard’s motion, May’s affidavit, and the testimony

at the hearing. Specifically, it noted

that Hubbard’s motion stated that his clients “did not know of the pre-trial

conference,” while May’s affidavit, and testimony from a MicroCheck

representative, indicated that MicroCheck in fact did know about the hearing. [1] Michoice also argued that MicroChoice’s

conduct in a parallel federal suit was “improper” and shows “MicroCheck’s

mentality.”

At the hearing, the court

admonished May that — because the

court had not yet signed the order permitting Hubble to substitute for may as

counsel — it was her responsibility to

attend the hearing:

I

wanted to hear from you because you are the attorney of record. You still are the attorney of record. I have yet to sign the motion to substitute

counsel and as such you have a responsibility to show up for all of the

hearings that are set for your client and you failed to show up at this one and

I wanted to hear from you as to what your reasoning was. It sounds like we have a misunderstanding

here but nonetheless, understand it is your responsibility, misunderstanding

notwithstanding, to know what’s going on in your file.

As

a result of this and, I guess, that lack of knowledge, we are here today. So I’m faced with the choice of getting rid

of the case or reinstating the case and I, as a matter of policy, I don’t want

people missing my docket call. I can’t

have that. So that’s something I am

considering.

At the close of the hearing, the court announced:

“Based on the affidavits that are before the Court and the evidence presented

to the Court, I am going to deny the motion to reinstate.”

3. MicroCheck’s appeal

MicroCheck brought this appeal,

complaining in two points of error about (1) the trial court’s denying its

motions to reinstate, and (2) the trial court’s entry of an earlier agreed

interlocutory order dismissing some of MicroCheck’s claims as preempted by

federal law.

Denial of Motion to Reinstate

A trial court may dismiss a case on

“failure of any party seeking affirmative relief to appear for any hearing or

trial of which the party had notice.” Tex. R. Civ. P . 165a(1). A verified motion to reinstate may be filed

within 30 days of dismissal, and the court is required to hold a hearing on the

motion. Tex. R. Civ. P . 165a(3).

Attaching a supporting affidavit can substitute for verification of the

motion. 3V, Inc. v. JTS Enters., Inc. , 40 S.W.3d 533, 539 (Tex. App. — Houston [14th Dist.] 2001, no pet.). The court must reinstate the case “upon

finding after a hearing that the failure of the party or his attorney was not

intentional or the result of conscious indifference but was due to an accident

or mistake or that the failure has been otherwise reasonably explained.” Tex.

R. Civ. P . 165a(3).

The standard for reinstatement

following dismissal for want of prosecution is “essentially the same as that

for setting aside a default judgment.” Smith v. Babcock & Wilcox Constr. Co. ,

913 S.W.2d 467, 468 (Tex. 1995). “A

failure to appear is not intentional or due to conscious indifference within

the meaning of the rule merely because it is deliberate; it must also be

without adequate justification.” Id .

“Proof of such justification—accident, mistake or other reasonable

explanation—negates the intent or conscious indifference for which

reinstatement can be denied.” Id .

“[C]onscious indifference means more than mere negligence.” Id . (citing Ivy v. Carrell , 407 S.W.2d 212, 213 (Tex. 1966)).

Whether the failure to appear was “‘not intentional or the result of

conscious indifference’ is a fact-finding within the trial court’s

discretion.” Price v. Firestone Tire & Rubber Co. , 700 S.W.2d 730, 733 (Tex.

App.—Dallas 1985, no writ); see also

Brown v. Howeth Investments, Inc. , 820 S.W.2d 900, 903 (Tex. App.—Houston

[1st Dist.] 1991, writ denied) (“The standard we apply to review the trial

court’s refusal to reinstate is whether the trial court abused its discretion.”). The fact finder is the sole judge of the

credibility of the witnesses and the weight to be given their testimony. Hinkle

v. Hinkle , 223 S.W.3d 773, 778 (Tex. App.—Dallas 2007, no pet.) (citing City of Keller v. Wilson , 168 S.W.3d

802, 819 (Tex. 2005)). “[I]f the factual

assertions in party’s affidavit are not controverted, the movant’s burden is

satisfied if the affidavit sets forth facts that, if true, negate intentional

or consciously indifferent conduct.” Dick v. Dick , No. 04-08-00936-CV, 2010

WL 1491644 , at *2 (Tex. App.—San Antonio, Apr. 14, 2010, no pet.) (mem. op.)

(citing Dir., State Emps. Workers’ Comp.

Div. v. Evans , 889 S.W.2d 266, 269 (Tex. 1994)).

MicroCheck argues here that May’s

uncontroverted explanation about why she did not attend docket call

demonstrates that it was due to accident or mistake, rather than conscious

indifference. “Because Appellant’s

counsel reasonably explained the failure to appear in this case and because

there was no evidence that her failure was intentional or the result of

conscious indifference,” MicroCheck argues, “the trial court abused its

discretion when it denied the motion for reinstatement.”

In response, Michoice contends that

the trial court’s refusal to reinstate was within the court’s discretion

because the court was “presented with conflicting evidence regarding the

explanation for the party’s absence.” In

support, it notes the conflict between Hubbard’s representation—in the first

motion to reinstate—that MicroCheck did not know about the docket call, and the

representations by May and MicroCheck during the hearing that MicroCheck did

know about the docket call. Michoice

also points to Hubbard’s “implying” in the first motion to reinstate that he

did not attend the docket call because he was working on MicroCheck’s mandamus

petition as contradicting the testimony of MicroCheck’s representative at the

hearing that Hubble did not know about the hearing. Michoice thus argues that “[a]s a result of

the conflicting evidence MicroCheck advanced to the trial court through their

new attorney, the trial court did not abuse its discretion in denying

Appellants’ Motions to Reinstate.”

We disagree and reverse the trial

court’s dismissal of MicroCheck’s claims.

While the trial court has discretion in ruling on a motion to reinstate,

it abuses that discretion if it does not properly consider the standard set

forth in rule 165a requiring reinstatement if a failure to appear is not

intentional or the result of conscious indifference. Brown ,

820 S.W.2d at 903 . Scarlett May, MicroCheck’s

attorney of record, provided uncontroverted testimony that her failure to

appear was not the result of conscious indifference, but was due to her

mistaken belief that she had been replaced by Hubbard as counsel of record.

The evidentiary contradictions that

Michoice points to do not controvert May’s explanation for her failure to

appear. The two cases that Michoice

cites for the proposition that a trial court does not abuse its discretion in

denying a motion to dismiss when presented with conflicting testimony are

distinguishable on that ground. See Johnson v. Hawkins , 255 S.W.3d 394,

398-99 (Tex. App.—Dallas 2008, pet. denied) (lawyer relied on prior judge’s

policy only requiring lawyers on top four cases on trial docket to appear in

person, but trial coordinator testified that she told lawyer on phone that he

needed to appear for docket call in person); Nawas v. R & S Vending , 920 S.W.2d 734, 736-38 (Tex

App.—Houston [1st Dist.] 1996, no pet.) (lawyer failed to appear at two hearing

and a trial setting because he was ill, but left for international vacation

during time he was allegedly too sick to attend hearing).

MicroCheck’s lawyer of record,

Scarlett May, may not have been as “conscientious as [s]he should have been” in

not following up on the status of the motion to substitute, and MicroCheck’s

new lawyer, Patrick Hubble, did make factual misstatements in the motion for

reinstatement about his client’s knowledge of the hearing, but neither of these

facts justify the trial court’s refusal to grant MicroCheck’s motion for

reinstatement in light of May’s uncontroverted testimony about why she missed

the hearing. See Smith , 913 S.W.3d at 468 (admonishing that attorney’s failure

to be conscientious does not amount to conscious indifference and that

misstatements in motion might be grounds for sanctions, but not to deny motion

for reinstatement when faced with credible, uncontradicted reasons for failure

to appear).

Nothing in the record indicates

that the trial court considered the standard under rule 165a requiring

reinstatement if a failure to appear is not intentional or the result of

conscious indifference. The court acknowledged

at the hearing that May’s failure to appear was the result of a

“misunderstanding” and the only explanation the court gave for denying

MicroCheck’s motion to reinstate was that, “as a matter of policy, I don’t want

people missing my docket call.” The

court abused its discretion by failing to grant MicroCheck’s motion to

reinstate.

CONCLUSION

We reverse and remand the trial

court’s judgment dismissing MicroCheck’s claims for want of prosecution. We accordingly do not reach MicroCheck’s

second point of error complaining of the trial court’s entry of an agreed

interlocutory order dismissing some of MicroCheck’s claims on federal

preemption grounds.

Sherry

Radack

Chief

Justice

Panel

consists of Chief Justice Radack and Justices Alcala and Bland.

[1]

MicroCheck’s representative at

the hearing clarified that MicroCheck was aware of the hearing, but expected

May to attend, as evidenced by their contacting May the day after the docket

call to inquire what happened. He

further testified that MicroCheck would never have intentionally have allowed

no one to show up:

We are not attorneys but we know that people have to come to

hearings. There’s been — we have had counsel come

to every hearing that’s ever been held.

We have never missed a hearing, I don’t think, even been late to one

either and would never have allowed that to occur intentionally.