Key Points

  • The Fourth Court of Appeals affirmed the dismissal for want of prosecution of Courtland Building Company's 2018 lease suit after 18 months of inactivity.
  • The majority expanded Rainbow Home Health Inc. v. Schmidt to hold that a trial court does not abuse its discretion by failing to hold a Rule 165a(3) hearing when the movant does not request a hearing before the motion to reinstate is overruled by operation of law.
  • Courtland's prayer for a hearing in its motion and its written hearing request filed four days after the motion was overruled were held insufficient.
  • Justice Meza dissented on the hearing issue, writing that Rule 165a(3) places the duty to set a hearing on the clerk and judge, citing a split among Texas courts of appeals, and disclosing that the en banc court took the case and returned it to the panel without explanation.
  • Justice McCray concurred in the judgment only.

A divided Texas appeals court held on Nov. 10 that a trial judge may let a plaintiff's bid to revive a lawsuit dismissed for inactivity fail without a hearing if the plaintiff did not ask for one before the bid expired automatically. The ruling extends a 2002 precedent that the dissenting justice called "demonstrably erroneous."

The Fourth Court of Appeals in San Antonio affirmed the dismissal of a lease suit that Courtland Building Company Inc. filed in 2018 against Lozajo Investments LLC, which does business as ND2NO Network, Lozajo Management LLC and Lori Hagee. Chief Justice Rebeca C. Martinez wrote the opinion. Justice H. Todd McCray concurred in the judgment only, and Justice Velia J. Meza concurred on one issue and dissented on the other.

The decision turns on Texas Rule of Civil Procedure 165a(3). That rule lets a plaintiff whose case was dismissed for want of prosecution file a sworn motion to reinstate. It provides that the judge "shall set a hearing on the motion as soon as practicable." The majority held that in the Fourth Court, a hearing request inside the motion is not enough, and a separate request filed after the motion is overruled by operation of law comes too late.

According to Courtland's petition, ND2NO Network, an entity affiliated with Hagee, leased real property from Courtland in 2014, and Courtland sued four years later over unpaid amounts owed under the lease. After Hagee was deposed on Feb. 15, 2023, the clerk's record showed no filings for 18 months. On Sept. 12, 2024, the trial court issued a notice of dismissal docket.

Courtland's motion to retain the case said Hagee's deposition had been suspended when she said she was prepared to testify only individually and not as a corporate representative. It said the parties had been unable to reschedule. On Oct. 28, 2024, Judge Kirsten Cohoon of the 451st Judicial District Court in Kendall County denied the motion and dismissed Courtland's claims without prejudice.

Courtland then filed a combined motion to reconsider, reinstate and grant a new trial. It cited the defendants' three changes of counsel, three Houston-area weather events in 2024 including Hurricane Beryl, and 135 trial settings for its lawyer between January 2023 and October 2024. The motion asked for relief "upon a hearing of these motions," but no fiat or proposed order setting a hearing accompanied it. The motion was overruled by operation of law on Jan. 13, 2025. Courtland filed a request for oral hearing four days later, and no hearing was held.

On the first issue, the panel unanimously upheld the denial of the motion to retain. Martinez wrote that the motion referred to the deposition problems "in a conclusory fashion and without any supporting evidence," and the appellate record contained no transcript of the dismissal hearing. "The trial court did not abuse its discretion for failing to consider excuses that were absent from Courtland's motion to retain," she wrote.

On the hearing issue, Courtland relied on Thordson v. City of Houston, a 1991 Texas Supreme Court decision holding that "it was not within the discretion of the trial court to fail to hold an oral hearing on the motion to reinstate." The defendants argued Courtland waived a hearing by ignoring a local rule of the trial court that requires a formal hearing request to be filed with the motion.

The majority sided with the defendants. It relied on Rainbow Home Health Inc. v. Schmidt, the court's 2002 decision that a request buried in the motion itself left "no mechanism by which to call to the trial court's attention the need for a hearing." Drawing on motion-for-new-trial decisions from Houston's Fourteenth Court of Appeals and the Dallas court, Martinez wrote that the court would "expand our holding in Schmidt" to cover requests filed after the motion is overruled by operation of law.

The majority declined to consider January 2025 emails between Courtland's counsel's staff and court staff, which Courtland raised first in its reply brief and which were not in the record.

Meza wrote that the panel was bound by Rainbow Home Health but not obliged to enlarge it. "This timing requirement appears nowhere in Rainbow Home Health or in the rule," she wrote. In her reading, Rule 165a(3) "assigns the clerk and the judge, not the movant, the task of bringing the motion to a hearing before that door closes." She noted that the Texas Supreme Court has twice called the hearing mandatory, in Thordson and in a 1988 decision, and wrote, "The majority does not distinguish either decision."

She also rejected the analogy to new-trial motions. "A timing rule developed for motions the trial court has no duty to hear (motions for new trial) has no place under a rule of civil procedure that commands the trial court to hear the motion," Meza wrote. She added that under Rule 3a(b), a local rule "must not be inconsistent with" rules adopted by the Supreme Court of Texas, so the trial court's local rule could not shift the burden to the movant.

According to the dissent, Texas appellate courts are divided. Courts in Austin, Amarillo, Texarkana and Beaumont, along with the Fifteenth Court of Appeals, place the duty to set a hearing on the trial judge. Houston's First and Fourteenth courts, the Eastland court and the San Antonio court require the movant to ask separately.

Meza also disclosed that six months earlier, the Fourth Court had withdrawn the appeal from the panel on its own motion and submitted it to the full court. After five months of work, she wrote, "without a public explanation, a majority of the en banc court withdrew the en banc submission and returned the case to the original panel." She wrote that the secrecy of deliberations has value, "But deliberation is meant to end in a reasoned decision."

She wrote that the cost falls on litigants who can least afford more appeals. "For most litigants in that situation, the court of appeals is the court of last resort in fact if not in name," she wrote.

Courtland was represented by Gus E. Pappas of Dabney Pappas. The Lozajo entities and Hagee were represented on appeal by Richard H. Edelman of Houston.

Meza would have reversed and sent the case back for a hearing on the motion to reinstate. The judgment affirms the dismissal, which was entered without prejudice. Meza wrote that correcting the court's precedent "is now contingent on Courtland's filing a motion for en banc reconsideration or a petition for review" in the Texas Supreme Court.