Thursday, May 15, 2008

Withdrawal of counsel for nonpayment of fees gets clients no sympathy

Denial of Motion for Continuance (made orally in mid-trial) was not error, court of appeals says.

Lofton v. Dyer (Tex.App.- Houston [1st Dist.] May 15, 2008) (Hanks)

In issue two, the Loftons argue that the trial court erred in refusing to allow them sufficient time to retain legal counsel by denying their request to continue the case.

We review the grant or denial of a motion for continuance for an abuse of discretion. Villegas v. Carter, 711 S.W.2d 624, 626 (Tex. 1986). We will not overrule the trial court’s decision unless the trial court acted unreasonably or in an arbitrary manner “without reference to any guiding rules and principles.” Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991) (quoting Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985)).

The Loftons’ attorney withdrew from the case. The Loftons contend that they were not notified of the withdrawal hearing or informed that the attorney had withdrawn. Once they were notified, the Loftons represent that they “sought diligently to secure legal representation in the rural and surrounding area where they reside.” They further assert that, due to their “extremely modest means, ethnicity, and lack of sophistication,” they should be given additional time to find competent counsel.

The record reflects that the Loftons’ attorney withdrew because the Loftons had not paid his fees.

It also reflects that the Loftons were aware of his withdrawal more than five months before the trial setting. Furthermore, the Loftons’ request for a continuance was made orally after Dyer had rested his case and after the Loftons had cross-examined two witnesses. Accordingly, we hold that the trial court did not abuse its discretion in denying the oral motion for continuance. See Taherzadeh v. Ghaleh-Assadi, 108 S.W.3d 917, 928 (Tex. App.—Dallas 2003, pet. denied).

We overrule issue two.
Percy Lofton, Jr. v. Dyer (Tex.App.- Houston [1st Dist.] May 15, 2008)(Hanks) (real estate law, trespass to try title, adverse possession, right to trial by jury, motion for continuance)
Opinion by Justice Hanks Before Justices Nuchia, Hanks and Higley
01-07-00184-CV Percy Lofton, Jr., Conal Lofton, James Lofton, Lonnie E. Turner, Carol S. Lofton Fowler, Delilah A. Lofton, and Horace Lofton v. Eddie DyerAppeal from 278th District Court of Grimes County Trial Court Judge: Hon. Kenneth Keeling
Disposition: Trial court judgment affirmed

J. Eddie Dyer brought this trespass to try title case against Percy Lofton, Jr., Conal Lofton, James Lofton, Lonnie E. Turner, Carol S. Lofton Fowler, Delilah A. Lofton, and Horace Lofton (collectively “the Loftons”). After a bench trial, the trial court awarded Dyer fee simple title to 87.41 acres in Grimes County under the 10-year adverse possession statute.

In three issues, the Loftons contend that the trial court erred in (1) denying the Loftons their right to a trial by jury, (2) refusing the Loftons sufficient time to retain legal counsel by denying their request to continue the case, and (3) failing to consider newly-discovered evidence in denying the Loftons’ motion for new trial.

The First Court of Appeals affirms.

Prompt Payment Act: ARCO Construction v. Americon Service Co. (Tex.App. Houston 2008)

Appellant, general contractor ARCO Construction Company, Inc., hired appellee, subcontractor Americon Services Company, Inc., to perform site work on a commercial construction project, pursuant to a written contract. When Americon did not receive payment as expected, it sued ARCO for breach of contract, failure to comply with payment obligations under Texas Property Code section 28.002 (“the Prompt Payment Act”), quantum meruit, sworn account, and trust fund violations. A jury found that ARCO violated the Prompt Payment Act by failing to timely pay sums due and awarded Americon: $61,417.70, plus interest and attorney’s fees. See Tex. Prop. Code Ann. § 28.002 (Vernon 2000). The jury found that Americon breached the contract but that its breach was excused, and the trial court rendered judgment that ARCO take nothing by its counterclaims.

In five issues, ARCO contends that the trial court erred (1) by granting relief under the Prompt Payment Act; (2) by “fail[ing] to award ARCO the damages awarded by the jury for Americon’s breach of contract”; (3) by “allowing Americon to draw adverse inferences” from ARCO’s redactions to its admitted bills for attorney’s fees; (4) by failing to properly apply the parties’ stipulated attorney’s fees; and (5) by concluding that Americon was entitled to recover on its alternative theories. The First Court of Appeals, in an opinion by Justice Laura Carter Higley, affirms.

ARCO Construction Company, Inc. v. Americon Services Company, Inc (Tex.App.- Houston [1st Dist.] May 15, 2008) (Higley) (construction law, Prompt Payment Act, attorney's fees)

OPINION EXCERPT

This case involves interpreting the Prompt Payment Act, and, therefore, we apply a de novo standard. City of San Antonio v. City of Boerne, 111 S.W.3d 22, 25 (Tex. 2003). We construe the statute as written and must, if possible, determine the legislature’s intent from the language that was used in the statute. Id. When determining legislative intent, the entire act, not isolated portions of the act, must be considered. Id. We look to the plain meaning of the words used in the statute and, if the meaning is unambiguous, interpret the statute so that it comports with the plain meaning expressed. Id.

Texas Property Code section 28.002 provides for prompt payment to contractors and subcontractors, as follows:

(a) If an owner or a person authorized to act on behalf of the owner receives a written payment request from a contractor for an amount that is allowed to the contractor under the contract for properly performed work or suitably stored or specially fabricated materials, the owner shall pay the amount to the contractor, less any amount withheld as authorized by statute, not later than the 35th day after the date the owner receives the request.

(b) A contractor who receives a payment under Subsection (a) or otherwise from an owner in connection with a contract to improve real property shall pay each of its subcontractors the portion of the owner’s payment, including interest, if any, that is attributable to work properly performed or materials suitably stored or specially fabricated as provided under the contract by that subcontractor, to the extent of that subcontractor’s interest in the owner’s payment. The payment required by this subsection must be made not later than the seventh day after the date the contractor receives the owner’s payment.

(c) A subcontractor who receives a payment under Subsection (b) or otherwise from an contractor in connection with a contract to improve real property shall pay each of its subcontractors the portion of the payment, including interest, if any, that is attributable to work properly performed or materials suitably stored or specially fabricated as provided under the contract by that subcontractor, to the extent of that subcontractor’s interest in the owner’s payment. The payment required by this subsection must be made not later than the seventh day after the date the contractor receives the owner’s payment.

Tex. Prop. Code Ann. § 28.002.

The plain language of section 28.002 demonstrates that its purpose is to ensure that contractors and subcontractors are promptly paid for valuable services and materials provided. See Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605, 620 (Tex. 2004) (noting that Texas contractors are statutorily required to promptly pay subcontractors proportionately from any amount paid by owner and attributable to work performed under subcontract).

Section 28.003 provides, in relevant part, that a good-faith dispute suspends these deadlines, as follows:


(b) If a good faith dispute exists concerning the amount owed for a payment requested or required by this chapter under a contract for construction of or improvements to real property, excluding a detached single-family residence, duplex, triplex, or quadruplex, the owner, contractor, or subcontractor that is disputing its obligation to pay or the amount of payment may withhold from the payment owed not more than 100 percent of the difference between the amount the obligee claims is due and the amount the obligor claims is due. A good faith dispute includes a dispute regarding whether the work was performed in a proper manner.

Tex. Prop. Code Ann. § 28.003(b). The plain language of section 28.003(b) demonstrates that its purpose is to protect a party from having to make payment under a contract when there is a good faith dispute regarding the obligation. See id. Such dispute includes, but is apparently not limited to, issues regarding work performance. Id.


The Act also provides that an amount withheld under this chapter begins to accrue interest on the day after the date on which the payment becomes due and bears interest at one-and-one-half percent each month. Id. § 28.004. A person may bring an action to enforce rights under this chapter, and the court may award costs and reasonable attorney’s fees as the court deems equitable and just. Id. § 28.005. Finally, the Act provides that it may not be interpreted to void a subcontractor’s entitlement to payment for properly performed work. Id. § 28.007.

Construing the Prompt Payment Act as a whole, as we must, its purpose is not only to ensure that contractors and subcontractors are promptly paid for valuable services and materials provided, but also to allow certain sums to be withheld from payment when those sums are the subject of a “good-faith dispute,” pending resolution of that dispute. Otherwise, for instance, a contractor could enjoy delayed payment of a substantial sum owed under a subcontract by raising dispute with a smaller portion of the subcontractor’s work. Clearly, this is the type of danger that the Prompt Payment Act is designed to protect against. See id. §§ 28.003 (permitting contractor to withhold only those sums that are subject of good-faith dispute), 28.007 (providing that Act may not be interpreted to void subcontractor’s entitlement to payment for properly performed work).

We conclude that the dispute at issue in the instant case, namely, whether there was a failure by ARCO to comply with the terms of the Contract, does not render the Prompt Payment Act inapplicable; rather, the situation presented herein represents the type of circumstance that the Act contemplates. The Act governs the timing of payment of undisputed funds to Americon and provides relief for ARCO in the form of allowing it to withhold funds that are the subject of a “good-faith dispute,” pending resolution of the dispute.

ARCO Construction Co., Inc. vs. Americon Services Co., Inc (Tex.App.- Houston [1st Dist.] May 15, 2008)(Higley) (construction law, Prompt Payment Act, attorney's fees) Before Justices Nuchia, Hanks and Higley
No. 01-06-00846-CV ARCO Construction Company, Inc. v. Americon Services Company, Inc.
Appeal from County Civil Court at Law of Harris County

Tuesday, May 13, 2008

He who represents himself ...


Pro se divorce litigant avoided spending money on a lawyer of his own, but ends up having to pay for wife's lawyer. Panel of Houston Court of Appeals - referring to family court judge as an institutional "it" (as is the custom) - approves.

Appellant Has Not Shown The Trial Court Abused Its Discretion When It Ordered Appellant To Pay Appellee's Attorney's Fees

Patterson v. Patterson (Tex.App. - Houston [14th Dist.] May 13, 2008) (Anderson) (divorce, attorney's fees as part of property division)

In his third issue, appellant contends the trial court abused its discretion when it awarded appellee her attorney's fees as part of the Final Decree of Divorce. In appellant's view, the trial court erred because appellee did not include a request for attorney's fees in any of her pleadings.
We review a trial court's award of attorney's fees for an abuse of discretion. Panozzo v. Panozzo, 904 S.W.2d 780, 785 (Tex. App.- Corpus Christi 1995, no writ). A trial court abuses its discretion when it acts arbitrarily, unreasonably, or without reference to any guiding principals. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990).

A trial court may apportion attorney's fees in a divorce action as part of a just and right division of the property. Henry v. Henry, 48 S.W.3d 468, 480 (Tex. App. - Houston [14th Dist.] 2001, no pet.). Attorney's fees incurred by both spouses during the divorce are a factor to be considered by the trial court in making an equitable division of the marital estate. Carle v. Carle, 149 Tex. 469, 474, 234 S.W.2d 1002, 1005 (1950). The fact the final divorce decree in this case does not include the attorney fee award in the list of property awarded to appellee cannot be viewed as an indication the attorney's fees were not considered in the division. Murff v. Murff, 615 S.W.2d 696, 699 (Tex. 1981).

In her Original Petition for Divorce, appellee asked the trial court, in the event the parties could not agree on a property division, to divide the marital estate in a manner the trial court deemed just and right and as provided by law. In addition, in appellee's Original Answer to appellant's counterclaim, appellee asked for her attorney's fees as part of an equitable division of the estate or, alternatively, they be taxed as costs.

Pleadings are to be liberally construed in favor of the pleader, particularly when, as here, the complaining party did not obtain a ruling on his special exceptions. See Tull v. Tull, 159 S.W.3d 758, 762 (Tex. App.- Dallas 2005, no pet.). The purpose of the pleading is to give notice of the claim involved. Id. Appellee's pleadings adequately apprised appellant that appellee was seeking the recovery of her attorney's fees as part of her suit for divorce.[1] We overrule appellant's third issue.

Patterson v. Patterson (Tex.App. - Houston [14th Dist.] May 13, 2008) (Opinion by John Anderson)
(divorce, waiver of jury trial, local rules, attorney's fees)
Opinion by Justice John Anderson
14-07-00487-CV Richard Steven Patterson v. Gwendolyn Elizabeth Patterson
Appeal from 247th District Court of Harris County (Hon. Bonnie Crane Hellums)
Disposition: Affirmed

How to (not) lose right to jury trial


Right to trial by jury in family court easily waived by not objecting to bench trial, and making sure the objection makes it into the record.

Appellant Waived Consideration Of His Issue Contending The Trial Court Erred When It Allegedly Denied Appellant's Request For A Jury Trial

In his second issue, appellant argues the trial court abused its discretion when it denied his request for a jury trial. Appellee asserts appellant has waived this issue on appeal because he failed to preserve this issue for appellate review by objecting on the record to the trial court conducting a bench trial. Once again, we agree with appellee.

When a party has perfected his right to a jury trial in accordance with Rule 216 of the Texas Rules of Civil Procedure but the trial court proceeds to trial without a jury, the party must, to preserve error, object on the record or affirmatively indicate on the record it intends to stand on its perfected right to a jury trial. In re K.M.H., 181 S.W.3d 1, 8 (Tex. App.- Houston [14th Dist.] 2005, no pet.) (citing Sunwest Reliance Acquisitions Group, Inc. v. Provident Nat'l Assurance Co., 875 S.W.2d 385, 387-88 (Tex. App.- Dallas 1993, no writ). The burden is on an appellant to bring forth a record sufficient to show reversible error. Sunwest, 875 S.W.2d at 388. Because there is no reporter's record in this appeal, even assuming without deciding appellant perfected his right to a jury trial, appellant cannot demonstrate he preserved this issue for appellate review by objecting on the record or otherwise affirmatively indicating on the record his intention to stand on his right to a jury trial. Accordingly, appellant has waived this issue on appeal. Tex. R. App. P. 33.1; Sunwest, 875 S.W.2d at 388. We overrule appellant's second issue.

Case involved pro-se litigant, but lesson equally important for lawyers to heed if appeal is a possibility.

Patterson v. Patterson (Tex.App. - Houston [14th Dist.] May 13, 2008) (Anderson) (divorce, waiver of jury trial, local rules, attorney's fees)
AFFIRMED: Opinion by
Justice John Anderson
14-07-00487-CV Richard Steven Patterson v. Gwendolyn Elizabeth Patterson
Appeal from 247th District Court of Harris County

Trial Court Judge: Judge Bonnie Crane Hellums

Jury waiver not a rare occurrence: Here is another case of second thoughts about wisdom of bench trial that did not sway the judges on appeal

Lofton v. Dyer (Tex.App.- Houston [1st Dist.] May 15, 2008)(Hanks) (real estate law, trespass to try title, adverse possession, right to try case to jury waived)

Right to Trial by Jury

In issue one, the Loftons argue that the trial court erred in denying them their right to a trial by jury.

A litigant waives the right to trial by jury if he participates in a bench trial without objection. See, e.g., In re D.R., 177 S.W.3d 574, 580 (Tex. App.—Houston [1st Dist.] 2005, pet. denied) (holding that litigants waived their objection to bench trial by failing to object or otherwise indicate they possessed “perfected” right to jury trial until charge conference); In re A.M., 936 S.W.2d 59, 61 (Tex. App.—San Antonio 1996, no writ) (observing that perfected right to jury trial in civil case may be waived by party’s failure to act when trial court proceeds with bench trial); Sunwest Reliance Acquisitions Group, Inc. v. Provident Nat’l Assur. Co., 875 S.W.2d 385, 387 (Tex. App.—Dallas 1993, no writ) (holding that, “when a party has perfected its right to a jury trial in accordance with rule 216 but the trial court instead proceeds to trial without a jury, the party must, in order to preserve any error by the trial court in doing so, either object on the record to the trial court’s action or indicate affirmatively in the record it intends to stand on its perfected right to a jury trial”).

The Loftons contend that they made a demand and paid a jury fee on October 24, 2001, and, when the case was called to bench trial, they requested that the trial proceed before a jury.

On August 2, 2005, all parties, through their respective attorneys, including the Loftons, waived their right to a jury trial and elected to try the case to the trial court without a jury. In February 2006, the trial court sent out a Notice of Bench Trial to be held on April 3, 2006. On March 6, 2006, the trial court sent out a Notice of Docket Call, which also reflected that the case was set for a bench trial. The Loftons never objected.

Accordingly, the trial court did not err in denying the Loftons’ belated request for a jury trial.

We overrule issue one.

Sunday, May 11, 2008

Grider v. Mike O'Brien, PC (Tex.App.- Houston [1st Dist.] May 8, 2008)(Hanks) (legal malpractice suit stemming from medical malpractice suit)
AFFIRM TC JUDGMENT: Opinion by Justice Hanks
Before Justices Taft, Nuchia and Hanks
01-07-00006-CV Rebecca Dunn Grider v. Mike O'Brien, P.C., O'Quinn & Laminack, and its Successor in Interest, The O'Quinn Firm, John M. O'Quinn, and Kaiser & May, L.L.P.
Appeal from 127th District Court of Harris County
Trial Court Judge: Hon. Sharolyn P. Wood

Lack of due diligence dooms PI case

Important to quickly serve defendant when filing close to the expiration of limitations period under the relevant statute of limitations, here two years (for personal injury suit).

Neal v. Garcia-Horrerios (Tex.App.- Houston [1st Dist] May 8, 2008)(Jennings) (negligence, due diligence in serving defendant, unexplained delay, statute of limitations)
AFFIRM TC JUDGMENT: Opinion by Justice Terry Jennings
Before Chief Justice Radack, Justices Jennings and Bland
01-07-01103-CV Candace Neal v. George Garcia-Horrerios
Appeal from County Civil Court at Law No 3 of Harris County
Trial Court Judge: Hon. Linda Storey

MEMORANDUM OPINION

Appellant, Candauce Neal, challenges the trial court's summary judgment rendered in favor of appellee, George Garcia-Horrerios, in Neal's suit against Garcia-Horrerios for negligence. In two issues, Neal contends that the trial court erred in granting Garcia-Horrerios summary judgment based upon her lack of "due diligence" in obtaining service of process upon Garcia-Horrerios, after the statute of limitations expired, because she presented an issue of fact and the summary judgment ruling violated her constitutional right to a jury trial. (1) We affirm. (2)

Procedural Background

Neal filed suit against Garcia-Horrerios on April 13, 2006, three days before the pertinent statute of limitations could have expired on April 16, 2006. Neal did not serve Garcia-Horrerios until May 15, 2007. On June 11, 2007, Garcia-Horrerios filed his answer, alleging as an affirmative defense that the statute of limitations barred Neal's suit against him. He subsequently filed a motion and amended summary judgment motion, asserting that Neal did not use "due diligence" in effecting service upon him after the statute of limitations had expired.

In his amended summary judgment motion, Garcia-Horrerios asserted that, on August 11, 2006, the Harris County Constable's Office had informed Neal that it had the incorrect address for Garcia-Horrerios. Subsequently, on August 18, 2006, Neal requested, and obtained, "a special agent for service of process"--Danny Harvey--in an effort to serve Garcia-Horrerios.
Neal attached to her second amended response to Garcia-Horrerios's summary judgment motion exhibits to explain the delay in serving Garcia-Horrerios. In Exhibit "A-3," Neal's "Verified Motion to Retain," filed on January 23, 2007, she asserted that the Harris County Constable's Office had made "several attempts" to serve Garcia-Horrerios and that the Harris County Constable's Office had since notified Neal that it had an incorrect address for Garcia-Horrerios. Although Neal asserted in the motion that she had "determined" Garcia-Horrerios's current address and was seeking to serve Garcia-Horrerios, she did not specify the dates that the Harris County Constable's Office attempted to serve Garcia-Horrerios or the date she learned that it had an incorrect address for Garcia-Horrerios. She also did not state when she learned of Garcia-Horrerios's correct address.

In Exhibit "B," Neal attached the affidavit of Harvey, who testified that, on January 10, 2007, he unsuccessfully attempted to serve Garcia-Horrerios. In Exhibit "C," Neal attached the affidavit of Alana Willis, who testified that the most reasonably effective way to serve Garcia-Horrerios was to deliver a copy of the citation to anyone over sixteen years of age at 11462 Travelers Way. In Exhibit "B-4" to her response, the "Officer's Return" shows that Garcia-Horrerios was served on May 18, 2007.

Statute of Limitations

In her first issue, Neal argues that the trial court erred in granting summary judgment in favor of Garcia-Horrerios based on her lack of diligence in serving Neal after the statute of limitations had expired because she filed her suit within the statute of limitations period and "[t]he issue of due diligence of service presented to the trial court was . . . a factual issue which properly required determination by the jury, rather than the [trial] court."

A plaintiff must bring a suit for personal injuries within two years from the time the cause of action accrued. See Tex. Civ. Prac. & Rem. Code Ann. § 16.003 (Vernon Supp. 2007). However, a timely filed suit does not interrupt the running of the statute of limitations unless the plaintiff exercised due diligence in the issuance and service of the citation. Proulx v. Wells, 235 S.W.3d 213, 215 (Tex. 2007). If the plaintiff diligently effected service after the expiration of the statute of limitations, the date of service relates back to the date of filing. Id.

To obtain summary judgment on the ground that a plaintiff did not serve her suit within the statute of limitations period, a defendant must show that, as a matter of law, the plaintiff did not exercise due diligence to effect service. See id. at 216. When the defendant affirmatively pleads the statute of limitations defense and shows that the plaintiff effected service after the expiration of the statute of limitations, the plaintiff bears the burden to "explain the delay" in service. Id. Thus, the plaintiff has the burden to present evidence regarding the efforts that she made to serve the defendant and to explain every lapse in effort or period of delay. Id. The plaintiff's explanation of her service efforts may demonstrate, as a matter of law, a lack of diligence, as when the plaintiff does not explain one or more lapses between service efforts or her explanations are patently unreasonable. Id. However, if the plaintiff's explanation for the delay raises a material fact issue concerning the plaintiff's diligence of service efforts, the burden shifts back to the defendant to conclusively show why, as a matter of law, the plaintiff provided an insufficient explanation. Id.

In assessing the plaintiff's diligence, "the relevant inquiry is whether the plaintiff acted as an ordinarily prudent person would have acted under the same or similar circumstances and was diligent up until the time the defendant was served." Id. We examine "the time it took to secure citation, service, or both, and the type of effort or lack of effort the plaintiff expended in procuring service." Id.

We review a summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). We take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Id.

In support of her argument that there is "a genuine fact issue" as to whether she used due diligence in effecting service upon Garcia-Horrerios, Neal relies upon Ellis v. Great Southwestern Corp., 646 F.2d 1099 (5th Cir. 1981). In Ellis, on June 14, 1979, the trial court granted a motion to transfer the cause from a federal district court in Arkansas to a federal district court in Texas; the plaintiff asserted that, on August 22, 1979, he attempted to serve the defendants; on December 17, 1979, the docket sheet had a "mysterious" notation that stated that the summons was reissued after a "[c]lerk's error"; and, on December 21, 1979 and January 16, 1980, the plaintiff effectuated service on the defendants. Id. at 1101-02. The United States Court of Appeals for the Fifth Circuit held that there was a factual issue as to whether or not the plaintiff diligently effected service upon the defendants because of the "mysterious docket entry that refers to the 'clerk's error' in failing to issue process in August." Id. at 1114.

However, here, there is no such evidence to explain Neal's delays in effecting service upon Garcia-Horrerios.

In regard to two significant time periods, Neal did not provide any summary judgment evidence to explain the delay of her efforts to serve Garcia-Horrerios. As noted by Garcia-Horrerios, on August 11, 2006, the Harris County Constable's Office had informed Neal that it was not attempting to serve Garcia-Horrerios because it had an incorrect address. Although Neal obtained a process server on August 18, 2006, the process server did not attempt to serve Garcia-Horrerios until January 10, 2007, approximately five months later. Neal does not provide any explanation for her failure to serve Garcia-Horrerios during this approximate five-month time period. See Taylor v. Thompson, 4 S.W.3d 63, 65 (Tex. App.--Houston [1st Dist.] 1999, pet. denied) (noting that "[i]t is the responsibility of the party requesting service, not the process server[,] to see that service is properly accomplished").

Also, from January 10, 2007 until April 13, 2007, the evidence does not show any explanation for Neal's failure to serve Garcia-Horrerios. See Boyattia v. Hinojosa, 18 S.W.3d 729, 734 (Tex. App.--Dallas 2000, pet. denied) (finding no due diligence with unexplained three-month delay); Webster v. Thomas, 5 S.W.3d 287, 290 (Tex. App.--Houston [14th Dist.] 1999, no pet.) (holding that plaintiff did not exercise due diligence with unexplained delay of over four months); Holt v. D'Hanis State Bank, 993 S.W.2d 237, 241 (Tex. App.--San Antonio 1999, no pet.) (concluding that plaintiff did not use due diligence with unexplained three-month delay).

Although Neal finally served Garcia-Horrerios on May 15, 2007, approximately thirteen months after she had filed suit and the statute of limitations had expired, her unexplained delays of approximately four and five months in attempting to serve Garcia-Horrerios demonstrated a lack of due diligence as a matter of law. See Proulx, 235 S.W.3d at 216. Accordingly, we hold that the trial court did not err in granting Garcia-Horrerios's summary judgment motion.
We overrule Neal's first issue.

Constitutionality of Summary Judgment

In her second issue, Neal argues that the trial court's summary judgment is unconstitutional because it denied her "a determination of facts by a jury" in "deprivation of the right to a jury trial as guaranteed by the United States and Texas Constitutions." See U.S. Const. amend. VII; Tex. Const. art. I, § 15. Garcia-Horrerios argues that Neal did not preserve her issue for appellate review because she "never raised the constitutionality of the [t]rial [c]ourt's actions prior to filing her appeal."

In order to preserve a complaint for appellate review, the record must demonstrate that "the complaint was made to the trial court by a timely request, objection, or motion" with "sufficient specificity to make the trial court aware of the complaint." Tex. R. App. P. 33.1(a)(1)(A); see Dreyer v. Greene, 871 S.W.2d 697, 698 (Tex. 1993). "As a rule, a claim, including a constitutional claim, must have been asserted in the trial court in order to be raised on appeal." Dreyer, 871 S.W.2d at 698.

Here, the record shows that Neal did not challenge the constitutionality of the trial court's summary judgment in the trial court, and she urges it for the first time on appeal. Accordingly, we hold that Neal did not preserve the issue for our review. See Root v. Brodhead, 854 S.W.2d 706, 710 (Tex. App.--Austin 1993, no writ) (holding that plaintiffs did not preserve for appellate review complaint that summary judgment against them was unconstitutional because they raised it for first time on appeal).

We overrule Neal's second issue.

Conclusion

We affirm the judgment of the trial court.
Terry Jennings
Justice
Panel consists of Chief Justice Radack and Justices Jennings and Bland.

1. See U.S. Const. amend VII; Tex. Const. art. I, § 15.
2. Garcia-Horrerios has moved to dismiss Neal's appeal, arguing that we lack jurisdiction to consider the appeal because "Neal did not file a motion with this Court seeking to extend the time for filing her notice of appeal." On November 13, 2007, the trial court signed its final judgment, and, on December 18, 2007, Neal filed her notice of appeal. Although Neal untimely filed her notice of appeal, she did file her notice of appeal within the fifteen-day period in which a party may file a motion to extend time to file a notice of appeal. Accordingly, we imply that Neal timely filed a motion for extension of time. See Verburgt v. Dorner, 959 S.W.2d 615, 617 (Tex. 1997).
This judicially created implication does not extend to the requirement that Neal has to provide a reasonable explanation for her failure to timely file her notice of appeal. Miller v. Greenpark Surgery Ctr. Assocs., Ltd., 974 S.W.2d 805, 807 (Tex. App.--Houston [14th Dist.] 1998, no pet.). Thus, on April 16, 2008, we ordered Neal to file a response to Garcia-Horrerios's motion to dismiss with a "reasonable explanation" for the late filing of her notice of appeal. See Tex. R. App. P. 10.5(b); Jones v. City of Houston, 976 S.W.2d 676, 677 (Tex. 1998). On April 28, 2008, Neal responded, and in her response, she detailed her trouble in calculating the notice of appeal's deadline due to "the trial court's multiple, and inconsistent[,] orders." Therefore, we hold that Neal's failure to timely file her notice of appeal was not deliberate or intentional, but was the result of inadvertence, mistake, or mischance in the calculation of the deadline. See Hone v. Hanafin, 104 S.W.3d 884, 886 (Tex. 2003). Accordingly, we deny Garcia-Horrerios's motion to dismiss.
Blitz Holding Corp. v. Grant Thornton, LLP (Tex.App. - Houston [1st Dist.] May 8, 2008)(Opinion on rehearing by Radack) (Justice Alcala recused)
AFFIRM TC JUDGMENT: Opinion by Chief Justice Radack
Before Chief Justice Radack, Justice Jennings01-04-00627-CV Blitz Holdings Corp., and GMC Corporation, Ltd v. Grant Thornton, LLP, Deloitte & Touche, LLP, Chamberlain, Hrdlicka, White, Williams & Martin, LLP and C. Thomas Scott
Appeal from the 280th District Court of Harris County
Trial Court Judge: Hon. Tony Lindsay

Rodea v. Chevron employment litigation - appellate opinion



KATIE RODEA
v.
CHEVRON PHILLIPS CHEMICAL COMPANY, LP

No. 01-06-00412-CV.
Court of Appeals of Texas, First District, Houston.
Opinion issued May 8, 2008.
Panel consists of Justices TAFT, KEYES, and ALCALA.
MEMORANDUM OPINION
ELSA ALCALA, Justice.

Appellant, Katie Rodea, appeals from an order granting summary judgment in favor of appellee, Chevron Phillips Chemical Company ("Chevron"), thereby denying her relief for her gender discrimination claim premised on unequal pay.[1] See Tex. Lab. Code Ann. § 21.051(1) (Vernon 2006). In her second issue, Rodea asserts the trial court erred by granting summary judgment in favor of Chevron because fact issues existed as to whether Rodea made a prima facie case that she was treated less favorably than similarly situated men. We conclude that Rodea presented some evidence to raise an issue of fact and that summary judgment was therefore improper. We do not reach Rodea's first issue in which she asserts an alternate ground to reverse the judgment. We reverse and remand to the trial court for further proceedings.

Background

Rodea began working for Philips Petroleum Company, Chevron's predecessor company, in 1996 as a clerk trainee. She transferred to Chevron's Pasadena facility in September 2001 and was promoted to non-exempt cost accounting clerk earning $33,680 a year. At the beginning of her employment at Chevron in Pasadena, Rodea was mainly responsible for clerical duties and certain basic accounting tasks performed under the supervision of Jim Martin. In 2001, Rodea began performing accounting duties for all" Work in Progress" ("WIP") and "Distribution in Progress" ("DIP") functions at the Pasadena complex.
Rodea was the sole female employee on a team of three employees performing various accounting work. While at Chevron's Pasadena plant, Rodea worked with two male employees, Jason Adams and Gary Buckland. Rodea, Buckland, and Adams all worked under Martin's supervision. When Buckland was hired, Martin assigned Rodea, Adams, and Buckland each to a specific product line for which each person was individually responsible. Prior to Buckland's arrival at the Pasadena complex, Rodea was responsible for the WIP and DIP functions for all four product lines. In April 2003, Michael Pelayo replaced Adams and took over his job responsibilities. Rodea trained Buckland and Pelayo in the WIP and DIP functions when they arrived at the Pasadena complex.

While at Chevron, Rodea attended college part-time until May 2004, when she received a bachelor of science degree from the University of Houston—Clear Lake. Chevron paid for approximately 80 percent of her education.

In March 2004, Rodea filed a claim with the Equal Employment Opportunity Commission, complaining of gender discrimination due to her level of pay compared to the male employees, in addition to other complainants. Rodea resigned from Chevron in June 2004, about one month after receiving her degree. She filed this action in December 2005. Rodea's cause of action for "Gender Discrimination" was on the ground that "Rodea did not receive equal pay for equal work in violation of Tex. Labor Code § 21.051."[2]
Chevron filed a motion for summary judgment that attacked Rodea's ability to make a prima facie case of discrimination. Chevron's sole challenge in the motion for summary judgment was that Rodea could not raise an issue of fact concerning her prima facie burden on the element that requires proof that "comparison employees held jobs that required equal skill, effort, and responsibility at the time." By referring to the reasons delineated in the affidavit by Martin, Chevron asserted Rodea's job did not require the equal skill, effort, and responsibility as the other employees. First, according to Martin's affidavit, the other employees had "assignments to larger and more complex product lines." Buckland was assigned the Polyethylene product line, which was the largest product line. Adams, and later Pelayo, was assigned the Polypropylene product line. Polypropylene was the second-largest and also the most complex due to Chevron's participation in a joint venture partnership associated with this product line. Rodea was assigned K-Resin and Neohexene product lines, which were the smallest and least complicated from a cost accounting perspective. Chevron also referenced a chart prepared by Martin, based on his personal knowledge, that listed the jobs and responsibilities assigned to each of the employees. The chart created by Martin lists roughly 75 tasks regularly completed by Rodea and the male employees. While Buckland, Pelayo, and Rodea share responsibility for some of the tasks, the chart shows that either Buckland or Pelayo were solely responsible for some of the tasks listed and that Rodea was solely responsible for other tasks. Second, the male employees "were directly involved in the budget preparation for the product lines," whereas Rodea only provided data for the budget preparation and was not ultimately responsible for the completed task. Unlike Rodea, Buckland was responsible for the completion of the monthly budgets for each of the product lines and assisted in the preparation of the annual budget report for management presentation. Third, the male employees had a level of experience and understanding of plant accounting that Rodea did not have during her employment, which led to differences in their work produced. Pelayo, Adams, and Buckland were responsible for "settling" all work orders and projects that did not clear in the normal course of events. In comparison, Rodea, who assisted in providing data, was not ultimately responsible for the task. Fourth, the other employees had "more education, experience and responsibilities" than Rodea. Attached to Martin's affidavit were the job applications and resumes of Rodea, Buckland, Pelayo, and Adams. The applications show that Buckland did not have a college degree, but that he had taken college level classes and had worked in oil and gas accounting for seven years before starting with Chevron in 1985, which gave him a total of over twenty years of accounting experience at the time he was transferred to the Pasadena facility. The applications of Adams and Pelayo show that they each had college degrees in accounting. Rodea's application showed that she had only administrative experience prior to working at Chevron. Rodea also did not obtain her college degree until shortly before she quit.

Chevron also produced the deposition of Rodea to show that she testified she did not know the employment or education history of Buckland, Pelayo, or Adams. She also testified that she was not certain as to the exact job duties or pay rates of the male employees.

Rodea responded with the remaining portions of her testimony, which relayed she was paid less than her two male co-workers who, since 2001, performed the same work as she did. The trial court rendered summary judgment in favor of Chevron, without stating the grounds for the ruling.

Summary Judgment

In Rodea's second issue, she asserts that the trial court erred by granting the motion for summary judgment filed by Chevron because she raised an issue of material fact on the challenge to her prima facie case by producing some evidence that she was similarly situated to the male employees who were paid more than she was paid.

A. Standard of Review

[omitted]

B. The Labor Code

Rodea brought her discrimination claim under section 21.051 of the Texas Labor Code. Under section 21.051, an employer commits an unlawful employment practice if, because of sex, the employer "fails or refuses to hire an individual, discharges an individual, or discriminates in any other manner against an individual in connection with compensation or the terms, conditions, or privileges of employment." Tex. Lab. Code Ann. § 21.051(1). The Texas Legislature modeled chapter 21 of the Texas Labor Code after federal law for the express purpose of carrying out the policies of Title VII of the Civil Rights Act of 1964 and its subsequent amendments. Id. §21.001(1); Wal-Mart Stores, Inc. v. Canchola, 121 S.W.3d 735, 739 (Tex. 2003). Consequently, when reviewing a claim brought under chapter 21, we may look not only to cases involving the state statute, but also to cases interpreting the analogous federal provisions of Title VII. See Caballero v. Cent. Power & Light Co., 858 S.W.2d 359, 361 (Tex. 1993).
In discrimination cases that have not been fully tried on the merits, we apply the burden-shifting analysis established by the United States Supreme Court. Wal-Mart Stores, Inc., 121 S.W.3d at 739; see also Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 142-43, 120 S. Ct. 2097, 2106 (2000); M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 24 (Tex. 2000). Under the burden-shifting analysis, the plaintiff has the initial burden to come forward with a prima facie case of discrimination.[3] Reeves, 530 U.S. at 142, 120 S. Ct. at 2106; Quantum Chem. Corp. v. Toennies, 47 S.W.3d 473, 477 (Tex. 2001). Other than the prima facie burden, Chevron does not challenge any of the remaining burdens and we therefore do not address any of the burdens beyond the prima facie case.

In order to make a prima facie case, the plaintiff must show that the plaintiff (1) is a member of a class protected by the Act; (2) suffered an adverse employment decision; (3) was qualified for the position held; and (4) was treated less favorably than similarly situated members of the opposing class.See Reeves, 530 U.S. at 142, 120 S. Ct. at 2106; see also Farrington v. Sysco Food Servs., Inc., 865 S.W.2d 247, 251 (Tex. App.-Houston [1st Dist.] 1993, writ denied). Chevron makes no challenge to the first three elements of Rodea's prima facie case. The challenge by Chevron is only to the fourth element, whether Rodea was similarly situated to the male employees. Concerning the fourth element, the Texas Supreme Court has said that employees are similarly situated if their circumstances are comparable in all material respects, including similar standards, supervisors, and conduct. Ysleta Indep. Sch. Dist. v. Monarrez, 177 S.W.3d 915, 917 (Tex. 2005).

C. Analysis

Rodea makes a prima facie showing of discrimination by producing some evidence that her circumstances were comparable in all material respects to the male employees, including similar standards, supervisors, and conduct. See Ysleta, 177 S.W.3d at 917. Taking the nonmovant Rodea's evidence as true, as required for summary judgments, it raises a fact issue concerning whether her position was similar in all material respects to the men's positions, but the men were paid more.

Rodea disputes the claim by Chevron that male employees had assignments to larger and more complex product lines. Although Chevron claimed Rodea's product lines were the least complicated from a cost-accounting perspective, she testified that the two lines she covered were smaller in terms of volume produced for the plant, but all four of the product lines were "set up the same" so the cost structures would not make the lines more complex, and the only difference was the raw materials used. Furthermore, although Rodea was assigned to the smaller lines, she had twice the number of lines as each of the men. Taking all evidence in the light most favorable to Rodea and making all reasonable inferences in her favor, the summary judgment evidence shows Rodea's work on the product lines was similar in all material respects to the work by the men.
Rodea disputes the assertion that male employees were directly involved in the budget preparation for the product lines, but she only provided data without ultimate responsibility for the completed task. Rodea testified that Buckland was "not coming up with the numbers" because "[a]ccounting has never made the decision on what the budget numbers actually are" since that decision "comes from engineering, operations." She stated that she provided the numbers to Buckland, which he then compiled and gave to Martin. Taking all evidence in the light most favorable to Rodea and making all reasonable inferences in her favor, Rodea produced some evidence to show that the male employee's role in the preparation of the budget was not a material difference in the work they performed as compared to the work she performed.

Rodea responds to the assertion by Chevron that she did not have an understanding of plant accounting equal to that of her male counterparts. In her deposition, Rodea stated that before the arrival of two of the male employees, she was responsible for "settling" all work orders that did not clear in the normal course, which shows that she had a level of experience and understanding of plant accounting similar to the male employees. Furthermore, she stated that she trained Buckland and Pelayo in the WIP and DIP functions, which also suggests that she had a similar understanding of plant accounting. Taking all evidence in the light most favorable to Rodea and making all reasonable inferences in her favor, Rodea raised a fact issue as to whether her understanding of plant accounting was equal to that of her male counterparts.

Rodea responds to the assertion by Chevron that the male employees had "more education, experience and responsibilities" than she. Rodea contends the education and experience difference are not pertinent in this situation because she had materially the same job responsibilities as the men. Taking all evidence in the light most favorable to Rodea and making all reasonable inferences in her favor, Rodea produced some evidence to show that despite the differences in education and experience, her responsibilities were comparable in all material respects to the male employees, including similar standards, supervisors, and conduct. See Ysleta, 177 S.W.3d at 917.

Chevron attempts to impeach Rodea's testimony by pointing out that she admitted that she was not sure of all of the male employees' job responsibilities or their exact pay. Chevron also points to the difference in the titles of Rodea and the male employees. However, under the standard for summary judgments, we must indulge every reasonable inference in favor of the nonmovant, take all evidence favorable to the nonmovant as true, and resolve any doubts in favor of the nonmovant. See Valence, 164 S.W.3d at 661. Applying this standard requires us to disregard evidence of Rodea's unawareness of the exact pay or exact duties of the male employees and the difference in the job titles. Id. Rodea is not required to conclusively prove that she was similarly situated to the male employees; rather Chevron must conclusively prove that Rodea cannot establish her prima facie case as a matter of law. See Little, 148 S.W.3d at 381. Rodea's burden is to raise an issue of fact on the matter of whether her circumstances were comparable in all material respects to the male employees. See Ysleta, 177 S.W.3d at 917.

Rodea's evidence is sufficient to raise an issue of fact. The evidence shows that she and the men reported to the same supervisor, that they were each assigned a product line, for which each employee was responsible for "the WIP and DIP, the reactor production and the production numbers, the usage efficiency, variance analysis, manufacturing cost statement, meeting with operations, reviewing costs, maintenance reports, journal entries, updating of allocations, over and underabsorption," and that each performed special projects for Martin. Rodea testified that Buckland and Pelayo each told her that their responsibilities were very similar to hers. Additionally, Rodea stated she saw the male employees primarily performing tasks similar to hers. Furthermore, Rodea and the other employees were subject to the same standards in the form of accounting protocols that provide the same expectations of all employees, and Rodea's performance evaluations showed that she was a recognized achiever. We conclude Rodea produced some evidence to make a prima facie case that her circumstances were comparable in all material respects to the male employees, including similar standards, supervisors, and conduct. See Ysleta, 177 S.W.3d at 917.

Chevron's motion for summary judgment plainly stated that it was challenging Rodea's ability to meet her prima facie burden to show that she was similarly situated to the male employees. Because Chevron's motion for summary judgment only challenged whether Rodea made a prima facie case, we do not address the remaining analysis under the shifting burdens of proof that become applicable after a plaintiff makes a prima facie case.See Burdine, 450 U.S. at 254, 101 S. Ct. at 1094; Quantum, 47 S.W.3d at 477. We sustain Rodea's second issue.[4]

Conclusion

We reverse the judgment of the trial court and remand for further proceedings.

[1] The trial court also granted summary judgment as to Rodea's sexual harassment and retaliation claims, but Rodea does not appeal those decisions.
[2] See Tex. Lab.Code Ann. § 21.051(1) (Vernon 2006).
[3] When a plaintiff has established a prima facie case, it creates a rebuttable presumption that the employer unlawfully discriminated against the employee. Tex. Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248, 254, 101 S. Ct. 1089, 1094 (1981); Quantum, 47 S.W.3d at 477. If the plaintiff is successful in demonstrating a prima facie case, the burden shifts to the employer to articulate some legitimate, nondiscriminatory reason for its rejection of the plaintiff. Reeves, 530 U.S. at 142, 120 S. Ct. at 2106; Quantum, 47 S.W.3d at 477. If the employer succeeds in carrying its burden of production, the presumption of discrimination is eliminated, and the burden shifts back to the plaintiff to present evidence that the stated reason was merely a pretext for discrimination. Reeves, 530 U.S. at 142-43, 120 S. Ct. at 2106; Quantum, 47 S.W.3d at 477. Even though the burden of production shifts, the burden of persuasion remains continuously with the plaintiff. Reeves, 530 U.S. at 143, 120 S. Ct. at 2106; Farrington v. Sysco Food Servs., Inc., 865 S.W.2d 247, 251 (Tex. App.-Houston [1st Dist.] 1993, writ denied).
[4] In her remaining issue, which we do not reach, Rodea contends alternatively that the trial court applied an inapplicable legal standard because in Chevron's motion for summary judgment it referred to Rodea's claim as the "Equal Pay Claim." See 29 U.S.C. § 206 (2006). Because the trial court did not state the standard under which it decided the motion, we have assumed the trial court applied the law as recited by Rodea in her response to Chevron's motion for summary judgment, which said her petition asserted a violation of the Texas Labor Code in that her employer discriminated in connection with compensation because of the employee's gender, and that employees are similarly situated if the circumstances are comparable in all material respects, including similar standards, supervisors, and conduct. We also note that although Chevron referred to the claim under the Equal Pay statute, its challenge was that the plaintiff must establish a prima facie case of discrimination by showing that the comparison employees held jobs that required equal skill, effort, and responsibility at the time. Chevron said that jobs are not substantially equal when one of the jobs has additional duties that require extra skill, effort, or responsibility. We have assumed that the element challenged by Chevron concerning the prima facie burden to conduct a comparison of employees for equal skill, effort, and responsibility was sufficient to constitute a challenge to the element concerning the prima facie burden to show that employees are similarly situated in that their circumstances are comparable in all material respects, including similar standards, supervisors, and conduct.

Rodea v. Chevron (Tex.App.- Houston [1st Dist.] May 8, 2008)(Alcala) (sex discrimination suit, employment law)
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01-06-00412-CV Katie Rodea v. Chevron Phillips Chemical Company, LP
Appeal from 55th District Court of Harris County
Trial Court Judge: The Honorable Jeffrey V. Brown
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Trial Court Judge: The Honorable John T. Wooldridge
Salaymeh v. Plaza Centro, LLC (Tex.App.- Houston [1st Dist.] May 8, 2008)(Hanks) (enforcement, judicial sale to satisfy judgment)
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Appeal from County Civil Court at Law No 2 of Harris County
Trial Court Judge: Hon. Gary Michael Block

Petition for mandamus denied in two-sentence "opinion"

In re Atlantic Specialty Ins. Co. (Tex.App.- Houston [1st Dist.] May 8, 2008)(per curiam) (summary mandamus denial) DENY PETITION FOR WRIT OF MANDAMUS: Per Curiam
Before Justices Nuchia, Hanks and Higley
01-08-00289-CV In re: Atlantic Specialty Insurance Company
Appeal from 157th District Court of Harris County
Trial Court Judge: Hon. Randall W. Wilson

Original Proceeding On Petition For Writ Of Mandamus

MEMORANDUM OPINION

By petition for writ of mandamus, relator, Atlantic Specialty Insurance Company, seeks relief to compel the trial court to vacate its March 28, 2008 order.

We deny the petition for writ of mandamus.

Per Curiam

The underlying case is Anheuser-Busch, Inc. v. Smart Machines Technologies,Inc., Atlantic Specialty Insurance Company, Farmers Marine Copper Works,Inc. and Steadfast Insurance Company, Cause No. 2007-28051 in the 157th Judicial District Court of Harris County, Texas, the Hon. Randy Wilson presiding.

Modification of Child Support | Voluntary Underemployment

Finding of intentional underemployment affirmed on appeal. Retroactive reduction of monthly child support denied.

McLane v. McLane No. 01-06-00634 (Tex. App.- Houston [1st Dist.] May 1, 2008) (Opinion on motion for rehearing by Hanks) (motion to decrease child support, intentional underemployment, retroactive modification)
Opinion by Justice George C. Hanks, Jr.
Panel members: Justices Taft, Hanks and Higley
Michael McLane v. Sandra Helene McLane
Appeal from 309th Family District Court of Harris County
Trial Court Judge: Hon. Frank B. Rynd
Disposition: Affirm trial court's judgment reducing monthly child support to a lesser degree than sought; denying retroactive application of change

OPINION ON REHEARING

Michael McLane filed a motion for en banc rehearing. We withdraw our opinion and judgment of December 20, 2007 and issue the following in their stead. We dismiss the motion for en banc rehearing as moot.

Michael McLane appeals the trial court’s decision modifying his child support payments. In two issues, Michael complains of the trial court’s finding that he was intentionally underemployed and its refusal to retroactively award a decrease of child support. We affirm.

Background

In July 2003, after 10 years of marriage, Michael and Sandra McLane divorced. As agreed upon, Sandra was awarded primary custody of SMM, their adopted son who was born on September 11, 1996. Michael, who is a licensed attorney, agreed to pay $800 each month in child support. Less than four months later, Michael filed a variety of motions that, among other things, sought a reduction in his child support payments.

Two years later, there was a one-day bench trial on Michael’s claims for a reduction in child support, and, on December 10, 2005, the associate judge issued the following report:

Modification granted. [Child support] reduced to $628.55/mo [beginning] December 15, 2005. [Michael] is underemployed. [Michael’s] request for retroactive reduction is denied. [Michael] has an earning capacity of at least $48,000/yr as a wage earner.

Michael appealed the intentional-underemployment ruling to the referring court, and, on May 5, 2006, the presiding judge affirmed the associate judge’s report. The trial court filed the following Findings of Fact and Conclusions of Law:

FINDINGS OF FACT

The court finds that Michael McLane is intentionally underemployed and has an earning capacity of at least $48,000.00 a year. The application of the guidelines to gross resources of $48,000.00 a year provides a child support award of $628.55 per month.

Michael McLane graduated from South Texas College of Law in 1995, was licensed to practice law in Texas in 1996, is licensed to practice in the US District Court, Southern District of Texas, has practiced law over nine years and has been licensed, has received training or has worked as a realtor, insurance salesman, financial planner and social worker.

CONCLUSION OF LAW

Guideline support is presumed to be reasonable and in the best interest of the child.

A court may apply the support guidelines to the earning potential of the obligor.
The trial court filed additional findings as follows:

FINDINGS REQUIRED BY SECTION 154.130 OF TEXAS FAMILY CODE

The application of the guidelines to the earning potential of the obligor is not unjust or inappropriate.

The monthly net resources of the obligor’s earning potential per month are $3,142.75.

The monthly net resources of the obligee per month are minimal.

The percentage applied to the obligor’s potential net resources for child support by the actual order rendered by the court is 20%.

The amount of child support if the percentage guidelines are applied to the obligor’s net resources is $628.55.

Michael appeals the trial court’s decision.

Intentional Underemployment

Michael argues that the trial court erred in finding that he was intentionally underemployed because (1) there was no evidence of acts to avoid the responsibility to pay child support, (2) his income after the divorce has not decreased, and (3) there were no findings of fact or conclusions of law made by the trial court that support the conclusion that he is intentionally underemployed. We disagree.

Standard of Review

The trial court is accorded broad discretion in setting and modifying child support payments and, absent a clear abuse of discretion, the trial court’s order will not be disturbed on appeal. Tex. Fam. Code Ann. § 156.402(b) (Vernon 1996); Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990); McGuire v. McGuire, 4 S.W.3d 382, 387 (Tex. App.—Houston [1st Dist.] 1999, no pet.). The trial court’s primary consideration in determining the merits of a request for the modification of child support payments is the best interest of the child. Lenz v. Lenz, 79 S.W.3d 10, 14 (Tex. 2002).

A trial court abuses its discretion when it acts in an arbitrary and unreasonable manner or when it acts without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985). Under the abuse of discretion standard, we review the evidence in the light most favorable to the order and indulge every presumption in favor of the trial court’s order. See Walker v. Packer, 827 S.W.2d 833, 839–40 (Tex. 1992); Holley v. Holley, 864 S.W.2d 703, 706 (Tex. App.—Houston [1st Dist.] 1993, writ denied). If some probative and substantive evidence supports the order, there is no abuse of discretion. Whitworth v. Whitworth, 222 S.W.3d 616, 623 (Tex. App.—Houston [1st Dist.] 2007, no pet.).

The Law

Chapter 154 of the Texas Family Code establishes a multiple-step process for determining the amount of child support. The trial court must first determine the parties’ gross income, net income, and monthly net resources. And, each party is required to furnish information sufficient to identify the party’s net resources and ability to pay support, such as production of copies of income tax returns, financial statements, and pay stubs. After determining the amount of net resources, the trial court must decide whether to apply the child support guidelines or whether application of the guidelines would be unjust or inappropriate. See Tex. Fam. Code Ann. §§ 154.001–.309 (Vernon 2002 & Supp. 2007). Importantly, a parent’s child support obligation is not limited to that parent’s ability to pay from current earnings; rather it extends to his or her financial ability to pay from any and all available sources. See In the Interest of Striegler, 915 S.W.2d 629, 638 (Tex. App.—Amarillo 1996, writ denied).

Further, a trial court may order a parent to pay child support beyond the amount the parent’s income would ordinarily indicate under the guidelines if the parent could potentially earn more money but has intentionally chosen not to. See Tex. Fam. Code Ann. § 154.066 (Vernon 2002) (intentional underemployment or unemployment). If the actual income of the obligor is significantly less than what the obligor could earn because of intentional unemployment or underemployment, the court may apply the support guidelines to the earning potential of the obligor. Tex. Fam. Code Ann. § 154.066. “A parent who is qualified to obtain gainful employment cannot evade his support obligation by voluntarily remaining unemployed or underemployed.” Tenery v. Tenery, 955 S.W.2d 337, 340 (Tex. App.—San Antonio 1997, no pet.).

In order to find a parent intentionally underemployed, the evidence must show that the parent reduced his income for the purpose of decreasing his child support payments. In re P.J.H., 25 S.W.3d 402, 405–06 (Tex. App.—Fort Worth 2000, no pet.). The requisite intent may be inferred from such circumstances as the parent’s education, economic adversities, business reversals, business background, and earning potential. In re Davis, 30 S.W.3d 609, 617 (Tex. App.—Texarkana 2000, no pet.); In re P.J.H., 25 S.W.3d at 406. At the same time, the court must keep in mind a parent’s right to pursue his or her own happiness. Zorilla v. Wahid, 83 S.W.3d 247, 253 (Tex. App.—Corpus Christi 2002, no pet.); DuBois v. DuBois, 956 S.W.2d 607, 610 (Tex. App.—Tyler 1997, no pet.). Once the obligor has offered proof of his current wages, the obligee bears the burden of demonstrating that the obligor is intentionally underemployed. Zorilla, 83 S.W.3d at 253; DuBois, 956 S.W.2d at 610. Intentional underemployment has been construed to mean a “voluntary choice by the obligor.” In re D.S., 76 S.W.3d 512, 520 (Tex. App.—Houston [14th Dist.] 2002, no pet.); Baucom v. Crews, 819 S.W.2d 628, 633 (Tex. App.—Waco 1991, no writ.) (affirming modification where trial court found that obligor voluntarily became underemployed).

Analysis

Both Michael and Sandra testified at the original hearing before the associate judge and during the appeal to the trial court. They each represented themselves pro se, and the trial court had access to the record of the first proceeding. Although the trial court granted Michael’s motion and reduced his child support to $628.55 per month, Michael had sought a greater reduction, from the $800/month support he had originally agreed to down to $303.77/month. He argued that, based on his actual income, the guidelines provide that his monthly support should have been $297.83 for 2003, $342.33 for 2004, and $271.15 for 2005, which yield an average of $303.77.

Michael testified that, at the time of the divorce in 2003, he had agreed to the $800 per month payments based on his “historical payment of excess income” to his wife for the previous 10 years. Despite that agreement, however, Michael testified that, in reality, he was nearly bankrupt and was in the process of preparing a bankruptcy petition at that time. He testified that a friend had convinced him not to go through with filing the petition. Michael also testified that, although he initially moved to modify the payments in 2003, more than two years before the original proceeding on his motion, he did not have adequate funds to analyze his finances and go forward with the motion until 2005. Michael testified that he did not know the exact amount of his income at the time of his divorce proceedings and only recently became aware of his actual financial status, after he hired an accountant to review his records.

Michael presented the court with a document entitled “Trend Analysis of Self-Employment Income,” which he represents states his annual net income from 1995 to 2005. Michael testified that this typewritten document, which contains one entry in handwriting, reflects that his net income was trending upward from a $4,907 loss in 2002 (at the time he began paying $750 to $800 per month in child support) to an estimated $19,921.87 of positive earnings in 2004, not downward after his divorce.

Michael testified that the net income amounts in the analysis are supported by his federal income tax and social security statements.

However, Michael only offered into evidence his tax statements for the years 2002, 2003, and 2004, the time period shortly before and after the divorce. These statements are dated December 4, 2005, the day before the original hearing, and Michael testified that he had completed them just the night before.

Although he reports as personal income amounts less than what was found by the trial court, these statements also reflect that, as the sole proprietor of his law firm, Michael reported a gross income between $50,000 and $60,000 per year. Michael did not provide any verifiable supporting documentation regarding the business expenses and deductions he claims reduced his yearly net resources to an amount below the amount found by the trial court.

At the appeal to the trial court that was held over two months later, there was no testimony from Michael that the income tax statements for 2002, 2003, and 2004, which also state that he owes more than $12,000 and $14,000 in back taxes and penalties, had been filed with the Internal Revenue Service (“IRS”) as of the time of trial or about what arrangements, if any, he had made with the IRS for the payment of those taxes and penalties.

Michael testified that he has been self-employed for more than nine years, and he has chosen to “remain self-employed rather than be controlled by someone else’s morals.” He has been unable to grow his business because he (1) has had to spend a lot of time defending “false claims of child abuse,” (2) has had to forgo cases in remote counties due to the cost of gas, and (3) prefers to be available to attend SMM’s school events. He testified that he has gotten only two jobs in the last few years—one as a “game representative helping people” at Astroworld on the weekends, but that job ended when Astroworld closed in September 2005, and the other with a law firm, where he was making $25/hour. One month after he started with the law firm, “in the chaos following Hurricane Rita he was terminated against his will and he continued working for himself since then.” Michael testified that he did not have the income necessary to pay the existing child support and paying his support obligations has required him to forgo paying some of his creditors, and he could no longer tithe to his church. He had even applied for food stamps. Although Michael testified that he has chosen to remain self-employed for personal reasons, he also testified that he has applied for 14 legal jobs since the time of divorce and had only obtained the one job with a law firm paying $25 per hour.

Michael presented evidence from his clients, Tanya Stafford and Linda Kelly in an attempt to establish that Sandra was hindering his efforts to develop his practice. Stafford and Kelly both testified that they had received angry telephone calls from Sandra. During the telephone call, Stafford identified herself as one of Michael’s clients, and Sandra explained that she was calling numbers from a telephone bill that had been sent to her. Sandra did not call back. Kelly, however, testified that she had known Michael for years and had socialized with Michael and Sandra when they were a couple. She said that she had received a call from Sandra during which Sandra “bad mouthed” Michael and remarked that he was an incompetent lawyer. Sandra testified that she did not know that Kelly was Michael’s client. Kelly acknowledged, at trial, that she did not tell Sandra that she was Michael’s client. Sandra explained that she was calling Kelly as a friend to let her know not to send a joint Christmas card to the McLanes, and, after this conversation, Sandra did not call her again.

Ralph Rieger, Michael’s accountant, testified that he reviewed financial documents that Michael had provided to him and that he prepared the trend analysis based on those documents. He testified that, based on this analysis, Michael’s current income was “right in line” with his average income.

Sandra testified that it would not be in SMM’s best interest for her to hurt Michael’s practice. She noted that, in November 2002 prior to the divorce becoming final, Michael agreed to pay $750/month in child support, and then in June 2003, he agreed to pay $800/month.

In this case, despite Michael’s argument to the contrary, there was probative evidence to support the trial court’s conclusion that he was intentionally underemployed. First, there was undisputed evidence that Michael’s education and expertise enable him to obtain more lucrative employment if he wanted to do so. The evidence supports the court’s factual findings in its order that Michael graduated from South Texas College of Law in 1995, was licensed to practice law in Texas in 1996, is licensed to practice in the US District Court, Southern District of Texas, has practiced law over nine years and has been licensed, has received training or has worked as a realtor, insurance salesman, financial planner and social worker.

The court also heard evidence that Michael’s practice areas include family law, bankruptcy, and criminal defense, and that the year Michael graduated from law school, more than 10 years ago, he received an income of approximately $44,000 a year.

There is also evidence from Sandra that supports the conclusion that Michael became underemployed after his divorce with the intent of reducing his child support obligations. Contradicting his testimony, Sandra testified that Michael has taken lower paying jobs to reduce the amount of child support payments because he considers these payments as additional personal income to Sandra that he does not want to pay. At trial, Sandra testified as follows:
Your Honor, I believe that Mr. McLane is purposefully underemployed and that he chooses to be so because he does not want to give me money to help me financially take care of our son. He does not see this as child support. He sees it as personal income to me. As a matter of fact, he said that to me last Monday, on November 18th. His exact words to me were, “What I am giving you is second income to you.” But, Your Honor, it is not income to me. That would be alimony. This is child support to help support our son.

Given the caustic nature of the McLanes’ divorce proceedings and the trial court’s firsthand knowledge of the history of this case, we cannot conclude that it was unreasonable for the trial court to credit Sandra’s testimony as true. The record reflects that, during and after the divorce proceedings, Michael has blamed Sandra for coaching SMM to continually make out-cry allegations of abuse against him to Children’s Protective Services (“CPS”). Michael believes that Sandra has been trying to ruin his legal reputation with his clients. The record also reflects that the McLanes are so bitter toward one another that, as recently as October of 2007, they were still unwilling to put aside their differences even when confronted with the obvious fact that they were harming SMM.

An example of the acrimonious nature of this relationship is revealed in the transcript from the October 26, 2007 hearing conducted by the trial court to give the CPS investigator an opportunity to update the court on the status of SMM’s mental and physical health. During the hearing, the trial court made the following observations about Michael’s and Sandra’s continuing animosity toward each other:

Well, the Court has told [Michael and Sandra] on numerous occasions. If I could undo an adoption, that adoption would be undone so quickly. I’ve actually done research to see what authority I have to undo an adoption. Unfortunately, I have none. I think it’s tragic that this child was adopted.
. . .
Then I’m going to remind you once again the tragedy of this child and what you-all are doing. I begged you, begged you to try to do the right thing for this child, to put your own selfish needs, you know, put them aside and try real hard to work for this child. I’ve actually—I beg you again and again, I think it’s a tragedy that you-all adopted this child, tragic for his life, but I can’t undo that. And you have, I think, a legal obligation, a moral obligation, you’re going to have to answer to a Judge far more significant than me at the end of your life on how you treated this child entrusted in your care. And that Judge has far more powers than I have.

At the hearing, a caseworker from CPS, Emerald Ealy, testified that, in the past year, CPS has conducted between 15 - 20 investigations relating to SMM. She testified that she has seen no evidence of physical abuse, but SMM says that his father is abusing him, and she does not believe that SMM is making false allegations. Ealy testified that SMM is emotionally traumatized with so much “back and forth” between his parents, and she recommended that he be removed from their homes until the conflict between the parents is resolved. At the conclusion of the hearing, the trial court, sua sponte, awarded CPS temporary managing conservatorship of SMM.

Nevertheless, Michael argues that it was an abuse of discretion for the trial court not to believe his testimony and evidence regarding his financial status, specifically his evidence that his income has not decreased since the divorce and regarding his motive for taking lesser paying jobs. He argues that the court erred in making its decision regarding his underemployment and failing to take into consideration his right to pursue happiness in his career and spend more time with his child. We disagree.

In this case, almost all of the evidence of Michael’s finances before and after the divorce and his intent regarding the decision not to seek higher paying jobs is based on the credibility of (1) Michael’s testimony or (2) documents he has created for purposes of this litigation. Where, as here, the trial court’s decision regarding the appropriate amount of child support is based, in part, on the credibility of the witnesses, a matter within the trial court’s purview, we will not disturb that decision on appeal. See Whitworth, 222 S.W.3d at 623. The trial court is the sole decider of the candor, demeanor and credibility of the witnesses in this case and it was free to believe or disbelieve Michael’s testimony. See Tucker v. Tucker, 908 S.W.2d 530, 534 (Tex. App.—San Antonio 1995, writ denied). Contrary to Michael’s assertions, the trial court was not required to accept the evidence he presented of his income and net resources as true, especially if it was unsupported by objective evidence that he did not create himself. Friermood v. Friermood, 25 S.W.3d 758,760 (Tex. App.—Houston [14th Dist.] 2000, no pet.); Glassman & Glassman v. Somoza, 694 S.W.2d 174, 176 (Tex. App.—Houston [14th Dist.] 1985, no writ) (trial court, as fact finder, may decline to accept as true the testimony of an interested witness even if uncontradicted). Furthermore, the trial court could have inferred Michael’s intent to be underemployed from his education, business background, and earning potential. See In re Davis, 30 S.W.3d at 617; In re P.J.H., 25 S.W.3d at 406.

Because the trial court had knowledge of the case from the time of the divorce until the modification hearing, it was in a better position than this Court to consider the evidence of Michael’s credibility regarding his motives and the documents he has presented to the court. See McGuire v. McGuire, 4 S.W.3d 382, 387 (Tex. App.—Houston [1st Dist.] 1999, no pet.); Shoemate v. Winkley, 505 S.W.2d 357, 358–59 (Tex. Civ. App.—El Paso 1974, no writ). Thus, given the record in this case, we hold that the trial court did not abuse its discretion in finding that Michael was intentionally underemployed and that his potential yearly income was $48,000. We hold that the record before us does not disclose a clear abuse of discretion, and we overrule this issue.
Retroactive Award

Finally, Michael asserts that the trial court erred in denying his request that the decrease in child support apply retroactively. We disagree.

Standard of Review

While section 156.401 empowers the trial court to modify support orders retroactively, the application of the provision is not mandatory, but, rather, is left to the broad discretion of the trial court. Nordstrom v. Nordstrom, 965 S.W.2d 575, 582 (Tex. App.—Houston [1st Dist.] 1997, writ denied). It is imperative that the trial court have broad discretion to decide whether all of the facts and circumstances necessitate and justify a retroactive award of support. Id. Accordingly, we apply here the same abuse of discretion standard that we previously applied to the court’s finding of intentional underemployment. See id.

As noted above, the trial court had before it one day of testimony from numerous witnesses and several exhibits detailing the circumstances of the parties. A review of the record reveals that the court was presented with evidence that would support its decision to not apply the order retroactively. The record reflects that, despite his explanations as to the reason, the fact still remains that Michael originally agreed to child support payments in the amount of $800 per month, and he did not pursue the motion to modify the support order until more than two years after the motion had been filed. Furthermore, the trial court heard evidence that this reduction might cause hardship to SMM. Sandra testified that she is the primary caretaker of SMM, has negligible net resources, and cannot afford to repay several years of child support that Michael allegedly overpaid. To justify such an award, the evidence must directly support a retroactive modification. Id. Here, we hold that it does not, and therefore, the trial court did not abuse its discretion in denying the modification request. We overrule this issue.

Conclusion

We affirm the trial court’s modification order.

George C. Hanks, Jr.
Justice

Panel consists of Justices Taft, Hanks, and Higley.