RED BLUFF LLC v. NICOLE TARPLEY (2023)

DISSENTING OPINION

Affirmed and Majority and Dissenting Opinions filed August 24, 2023.

I respectfully part ways from my colleagues on their disposition of Red Bluff, LLC's first issue, in which it argues that the trial court erred by denying its motion to reset appellate deadlines under Texas Rule of Civil Procedure 306a. The dispositive question is the date on which Red Bluff's counsel acquired “actual knowledge” of the judgment. In my view, the phrase “actual knowledge of the order” as used in rule 306a(4) requires subjective awareness of the order's signing. Because there is no evidence that Red Bluff or its counsel were subjectively aware of the signed judgment before March 14, 2022, and because it is undisputed that Red Bluff did not receive the notice required by rule 306a(3), I would hold that the trial court's finding that Red Bluff's counsel acquired actual knowledge of the judgment on February 8, 2022 based on an unread email lacks legally sufficient evidentiary support. Consequently, Red Bluff's appellate deadlines began to run on March 14, 2022. Because Red Bluff filed its post-judgment motions within thirty days of March 14, 2022, they should be considered timely. This court should sustain Red Bluff's first issue and reach the merits of its other issues that have been properly preserved by the post-judgment motions.

Ordinarily, the time for filing post-judgment motions or a notice of appeal runs from the day the final judgment is signed. See Tex. R. Civ. P. 306a(1). The rules provide an exception when the party and its counsel have not received formal notice of the judgment and have not otherwise obtained actual knowledge of its signing within twenty days after it was signed. See Tex. R. Civ. P. 306a(4). The rule provides:

4. No notice of judgment. If within twenty days after the judgment or other appealable order is signed, a party adversely affected by it or his attorney has neither received the notice required by paragraph (3) of this rule nor acquired actual knowledge of the order, then with respect to that party all the periods mentioned in paragraph (1) shall begin on the date that such party or his attorney received such notice or acquired actual knowledge of the signing, whichever occurred first, but in no event shall such periods begin more than ninety days after the original judgment or other appealable order was signed.

Id. To take advantage of rule 306a(4), the party adversely affected is required to prove in the trial court, on sworn motion and notice, the date upon which the party or the party's attorney first either received notice of the judgment from the clerk or acquired actual knowledge of its signing, and that this date was more than twenty days after the date the judgment was signed. Tex. R. Civ. P. 306a(5); Jarrell v. Bergdorf, 580 S.W.3d 463, 467 (Tex. App.—Houston [14th Dist.] 2019, no pet.). A party making this prima facie showing will invoke the trial court's otherwise-expired jurisdiction for the limited purpose of conducting an evidentiary hearing. See In re Lynd Co., 195 S.W.3d 682, 685 (Tex. 2006) (orig. proceeding).

The trial court signed the final judgment on February 4, 2022. Post-judgment motions were due on March 7, 2022. Red Bluff did not file any post-judgment motions by March 7. Red Bluff claims it (1) never received the required official notice of the judgment and (2) did not learn of the judgment until March 14, when its lead counsel received an email from Tarpley's counsel. On March 14, Red Bluff filed a sworn motion to reset the post-judgment deadlines under rule 306a(4). In support of its motion, Red Bluff presented affidavits and unsworn declarations from its counsel and party representatives that the district clerk did not mail notice that the judgment was signed, that no such notice was received by Red Bluff or its counsel, and that Red Bluff and its counsel first learned of the judgment on March 14. This was sufficient to meet Red Bluff's prima facie burden. See Jarrell, 580 S.W.3d at 467-68.

In response to the motion, Tarpley asserted and attached evidence that the clerk's office had emailed lead counsel for both parties notice of the signed judgment on February 8. At an evidentiary hearing, Red Bluff's lead counsel testified that, after receiving Tarpley's response, he checked his computer and found a Harris County e-notice that was received on February 8. He stated that he did not look at the email at that time because if he had, he would have seen that a judgment had been signed and would have prepared to move forward. He testified that he did not realize that the February 8 email provided notice of a signed judgment until after he read Tarpley's response. The trial court denied Red Bluff's motion to reset the post-judgment deadlines and found that: (1) Red Bluff received an email notice from the clerk of the signing of the judgment on February 8; (2) Red Bluff's counsel acquired actual knowledge of the signing of the judgment on February 8; and (3) Red Bluff and its counsel did not receive the notice from the clerk by first-class mail.

In its first issue, Red Bluff challenges the trial court's order denying its motion for rule 306a relief and the finding that it acquired actual knowledge of the judgment's signing on February 8. Unlike the majority, I would sustain this issue.

The then-applicable version of rule 306a(3) required the clerk to “immediately give notice to the parties or their attorneys of record by first-class mail advising that the judgment or order was signed.” See former Tex. R. Civ. P. 306a(3) (effective until May 1, 2022). It is undisputed that the clerk did not send notice of the judgment by first-class mail, and the trial court so found. Thus, to obtain the benefit of rule 306a(4), Red Bluff had to prove that neither it nor its counsel acquired “actual knowledge of the order” within twenty days of its signing. Tex. R. Civ. P. 306a(4). As no one disputes that Red Bluff did not learn of the signed judgment until March 14, the dispositive issue is the date on which its counsel acquired actual knowledge of it. Red Bluff presented evidence from its attorneys that none of them actually learned of the signed judgment until March 14. Red Bluff's lead counsel acknowledged at the hearing, however, that he received an email from the district clerk's office on February 8, but he had not read it and did not learn until March 14 that it included a notification that the court had signed a judgment on February 4.

The majority concludes that counsel's acknowledgement that he found the February 8 email in his inbox is legally sufficient to support the trial court's order because even though counsel “did not recall opening the e-mail, Rule 306a does not require knowledge of the contents of the appealable order itself.” (Ante at 7). The majority cites three appellate court decisions concluding that a party had actual notice of an appealable order when the party received an email containing notice of the order from the trial court clerk within twenty days of when the order was signed, regardless whether the party had actual knowledge of the email's contents. See Rendon v. Swanson, No. 11-19-00260-CV, 2021 WL 3672622, at *3 (Tex. App.—Eastland Aug. 19, 2021, no pet.) (mem. op.); Park v. Aboudail, No. 02-20-00260-CV, 2021 WL 1421442, at *6 (Tex. App.—Fort Worth Apr. 15, 2021, no pet.) (mem. op.); Arlitt v. Ebeling, No. 03-18-00646-CV, 2018 WL 6496714, at *4 (Tex. App.—Austin Dec. 11, 2018, no pet.) (mem. op.).

I have no quibble with the majority's reading of these cases, but none of them were reviewed by the supreme court, and at least one other court of appeals has concluded otherwise. See Scott v. S2S Domain Waco Assocs., LLC, Nos. 10-20-00133-CV, 10-20-00145-CV, 2021 WL 5639086, at *5 (Tex. App.—Waco Dec. 1, 2021, pet. denied). In Scott, the court of appeals held that counsel's receipt of an email attaching the signed judgment was not sufficient evidence of actual knowledge of the judgment's signing for rule 306a(4) purposes when counsel had not read the email. Id. The majority neither acknowledges nor distinguishes Scott.

Red Bluff's entitlement to rule 306a relief turns on the meaning of “actual knowledge of the order.” As far as I can tell, the supreme court has not had occasion to address the issue, but I would hold it means subjective awareness that the order or judgment has been signed.

Rule 306a(4) contemplates notice of an appealable order in one of two ways: (1) receiving the official notice the clerk is required to send; or (2) acquiring actual knowledge. By my reading, beginning May 1, 2022, if a clerk's email attaching the judgment is “received” by counsel, it will count as notice of the judgment's signing even if the email is not opened or read. See Tex. R. Civ. P. 306a(3), (4). This is because an electronic notice from the clerk is one of the permitted forms of notice required by rule 306a(3) and such a notice need only be “received” to be effective. Under the current rule then, an attorney who receives such an email is on notice of the order's signing under the first prong of rule 306a(4), and there is no need to determine the date of “actual knowledge.”¹ Thus, “actual knowledge” must mean something different than merely receiving an email from the clerk. To be sure, counsel can acquire actual knowledge of a signed order by reading an email from the clerk that attaches the order. But by the majority's reading of the rule, simply receiving the clerk's email without looking at it—which could occur for any number of reasons—will always constitute actual knowledge because counsel should have opened the email. As this court has stated, however, the rules do not “provide that the timetable commences on the date the party should have acquired actual knowledge.” LDF Constr., Inc. v. Tex. Friends of Chabad Lubavitch, Inc., 459 S.W.3d 720, 725 (Tex. App.—Houston [14th Dist.] 2015, no pet.) (emphasis in original). But that is effectively the test the majority applies—one of constructive, not actual, knowledge. According to the majority, counsel should have known of the judgment because he should have read the clerk's email; therefore, he necessarily had actual knowledge of the judgment. The court in Scott refused to equate rule 306a(4)'s “actual knowledge” language with a constructive notice standard. I do too. Red Bluff did not receive the notice required by the applicable version of paragraph (3); it could not have acquired actual knowledge of the order's signing through an unread or unopened email.

I find instructive the supreme court's interpretation of comparable text in other notice contexts. For example, Civil Practice and Remedies Code section 101.101 requires parties making claims against governmental units to provide formal notice to them prior to suit. Tex. Civ. Prac. & Rem. Code § 101.101(a), (c). Subsection (a) sets forth the information the notice must reasonably describe. But those formal notice requirements do not apply if the governmental unit otherwise has “actual notice” of the same information. See id. § 101.101(c); Worsdale v. City of Killeen, 578 S.W.3d 57, 63-65 (Tex. 2019). The supreme court has held that the “actual notice” exception to the formal notice requirement is met only when the governmental unit has “subjective awareness” of its alleged fault producing or contributing to the death, injury, or property damage, meaning fault as ultimately alleged by the claimant. Worsdale, 578 S.W.3d at 59. As the court stated, “[t]he [actual-notice] standard is necessarily subjective, because lack of formal notice is excused only by actual, not constructive, notice.” Id. at 65. Although rule 306a's language is the court's and section 101.101's is the legislature's, I see a similar “formal notice” (required clerk notice or constructive notice) versus “subjective awareness” (actual knowledge) distinction within the rule in the same way as the court has construed the statute. Part of the reasoning behind the court's interpretation of section 101.101(c)'s actual-notice exception was the fact that without subjective awareness of the governmental unit's fault as ultimately alleged by the claimant, the unit would not be on notice of the need to investigate and gather information, thus defeating the purpose of requiring prompt notice. Id. at 63-64. Here, in a similar vein, absent receipt of formal notice from the clerk, an attorney that lacks subjective awareness that a final judgment has been signed has no knowledge that the deadline to timely file post-judgment motions or a notice of appeal has been triggered.

Importantly, my reading of rule 306a(4) also aligns with the supreme court's consistent admonishment that courts are to construe and apply procedural rules so that decisions turn on substance, not procedural technicalities.²

None of this is to say that I believe that counsel or a party should be able to re-start appellate deadlines by intentionally refusing to read or open emails from the clerk, but there is no indication that counsel did so here. There is no evidence that he read the email and consciously took no action or intentionally ignored it. It appears the email was merely overlooked.

For these reasons, I am hesitant to conclude that the present facts are legally sufficient to support a finding that Red Bluff's counsel acquired actual knowledge of the judgment on February 8 based on an unread email. I take the time to write separately to note apparent disagreement as to what “actual knowledge of the order” means and that the supreme court should settle the matter for the sake of future cases that, like this one, turn on the meaning of the phrase.

FOOTNOTES

1.   For this reason, and if the rule's current text applied, I believe Red Bluff would be entitled to no reprieve because counsel received the clerk's email—an electronic notice “required by paragraph (3)”—and thus he would be charged with notice under rule 306a(4)'s first prong.

2.   See Briscoe v. Goodmark Corp., 102 S.W.3d 714, 717 (Tex. 2003) (referring to “our oft-repeated position that a party should not lose the right to appeal because of an ‘overly technical’ application of the law”); Verburgt v. Dorner, 959 S.W.2d 615, 616-17 (Tex. 1997); Jamar v. Patterson, 868 S.W.2d 318, 319 (Tex. 1993) (per curiam) (“It is our policy to construe rules reasonably but liberally, when possible, so that the right to appeal is not lost by creating a requirement not absolutely necessary from the literal words of the rule.”); Crown Life Ins. Co. v. Estate of Gonzalez, 820 S.W.2d 121, 122 (Tex. 1991) (per curiam) (stating that procedural rules should be “liberally construed so that the decisions of the courts of appeals turn on substance rather than procedural technicality”).

Kevin Jewell Justice