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In The

Court of Appeals

Sixth Appellate District of Texas at
Texarkana

______________________________

No. 06-07-00076-CV

______________________________

MICHAEL A. FRENCH AND WIFE,

MISTI MICHELLE
FRENCH, Appellants

V.

BRIAN JAMES GILL AND GIUSEPPE V. RICCIO

D/B/A TIGERS
TRUCKING COMPANY, Appellees

On Appeal from the 402nd Judicial District
Court

Wood County, Texas

Trial Court No. 2004-261

Before Morriss, C.J., Carter and Moseley, JJ.

Opinion by Justice Moseley

O P I N I O N

This appeal involves a
summary judgment granted against Michael A. and Misti Michelle French in a
suit brought by them against Brian James Gill and Guiseppe V. Riccio,
doing business as Tigers Trucking Company. The same suit and very
closely-related questions were previously appealed by the Frenches to this
Court; a summary judgment rendered against them was reversed and remanded
for further proceedings.
(1)

The controlling issue in both
of these appeals is the impact of limitations on the claim of the Frenches
against Gill and Riccio.

I. Factual and
Procedural Background

The claims of the Frenches
arose as the result of a motor-vehicle collision which occurred January
29, 2002. Initially, the Frenches filed suit in March 2003 in federal
court against several defendants (not including Gill or Riccio), all of
whom were citizens of states other than Texas. See 28 U.S.C.A. §
1332(a) (West 2006) (granting federal jurisdiction in cases where complete
diversity of citizenship exists).

On January 14, 2004, the
Frenches filed an amended pleading in the pending federal court action,
seeking permission to join Gill and Riccio (Texas residents); an order was
then entered on January 28, 2004, which permitted the filing of that
amendment to the pleadings. However, the federal court reconsidered that
order and withdrew its consent for the joinder of Gill and Riccio by order
entered on March 4, 2004. Suit was then filed by the Frenches against Gill
and Riccio in the district court of Wood County, Texas, on April 29,
2004.

II. The Rule on
Limitations

On January 29, 2004 (between
the date the Frenches had been granted leave to include Gill and Riccio in
the federal lawsuit and the date of the entry of the order which withdrew
that permission), the two-year anniversary of the collision occurred. The
two-year anniversary of the collision is significant; after then, this
kind of tort claim would be barred under Texas's two-year statute of
limitations. See Tex. Civ. Prac. & Rem. Code Ann. § 16.003(a)
(Vernon Supp. 2007).

A. Tolling Exception
to the Rule

Although recovery on most
tort actions would be barred after the expiration of two years, an
exception to that rule provides that a tolling of the statute of
limitations takes place if a party has filed a previous suit in a
different court and that action was dismissed because of lack of
jurisdiction, provided that the party refiled the suit in a court of
proper jurisdiction within sixty days after such dismissal. Tex. Civ.
Prac. & Rem. Code Ann. § 16.064 (Vernon 1997); Clary Corp. v.
Smith, 949 S.W.2d 452, 461 (Tex. App.--Fort Worth 1997, writ denied).
The cases also note that the statute is to be liberally construed to
effectuate its objective--relief from penalty of limitation bar to one who
has mistakenly brought his action in the wrong court. Tex. Civ. Prac.
& Rem. Code Ann. § 16.064; Clary Corp., 949 S.W.2d at
461. The Frenches maintain that because they had filed their
claim in federal court within two years of the collision, this tolling of
the statute of limitations occurred.

B. The Exception to
the Exception

However, Gill and Riccio
contest the application of that tolling statute by pointing out an
exception to that exception. The tolling provision of Section 16.064 of
the Texas Civil Practice and Remedies Code does not apply if the initial
filing was done with intentional disregard of proper jurisdiction.
Parker v. Cumming, 216 S.W.3d 905, 909-10 (Tex. App.--Eastland
2007, pet. denied). Under that exception, if the record establishes
intentional disregard and that jurisdiction did not lie in the tribunal in
which the proceeding was originally filed, the original lawsuit did not,
as a matter of law, serve to toll limitations. Therefore, Gill and Riccio
maintain, if those conditions exist, and under these facts, the Frenches
would be time-barred from maintaining their action in state court.
See Tex. R. Civ. P. 166a; see also Parker, 216 S.W.3d
908.

III. What is the
Difference Between This Case and the First One?

In the first judgment and
appeal, appellees/defendants argued before the trial court and here that
collateral estoppel or the full faith and credit clause ended the action.
Gill and Riccio had convinced the trial court at the first summary
judgment hearing to find that rulings by the federal court (which included
a statement that "The additional Defendants that the Plaintiffs wish to
add are not indispensable and were clearly added solely for the purposes
of defeating diversity jurisdiction") conclusively proved that the savings
clause of Section 16.064 of the Texas Civil Practice and Remedies Code did
not toll limitations. We found to the contrary and reversed the summary
judgment granted Gill and Riccio.

In the present appeal, the
sole issue is one that we mentioned in our previous opinion in this case
but could not then address: Whether the Frenches' statements in their
federal pleading seeking to add Gill and Riccio preclude the Frenches from
seeking to apply the exception to the limitations statute in the state
lawsuit. In other words, when they filed their pleadings in federal court,
did they plead themselves right out of court?

Another motion for summary
judgment was filed by Gill and Riccio and this motion was granted. The
validity of that summary judgment is now before us.

IV. Standard of
Review

Summary judgment is proper
when the movant establishes that there is no genuine issue of material
fact and that he is entitled to judgment as a matter of law. Tex. R. Civ.
P. 166a(c); City of Houston v. Clear Creek Basin Auth., 589
S.W.2d 671 (Tex. 1979); Baubles & Beads v. Louis Vuitton,
S.A., 766 S.W.2d 377 (Tex. App.--Texarkana 1989, no writ). When
reviewing a summary judgment, we take as true all evidence favorable to
the nonmovant and indulge in every reasonable inference and resolve any
doubts in the nonmovant's favor. Limestone Prods. Distrib., Inc. v.
McNamara, 71 S.W.3d 308, 311 (Tex. 2002); Rhone-Poulenc, Inc. v.
Steel, 997 S.W.2d 217, 223 (Tex. 1999).

When the movant seeks summary
judgment based on the expiration of limitations, the movant must
conclusively prove the bar of limitations. Jennings v. Burgess,
917 S.W.2d 790, 793 (Tex. 1996). The question on appeal is not whether the
summary judgment proof raises a fact issue with reference to the essential
elements of the plaintiff's cause of action, but whether the summary
judgment proof establishes the movant is entitled to judgment as a matter
of law. Gonzalez v. Mission Am. Ins. Co., 795 S.W.2d 734, 736
(Tex. 1990). Because the movant bears the burden of proof, all conflicts
in the evidence are disregarded, evidence favorable to the nonmovant is
taken as true, and all doubts as to the genuine issues of material fact
are resolved in favor of the nonmovant. Nixon v. Mr. Prop. Mgmt.
Co., 690 S.W.2d 546 (Tex. 1985). If the nonmovant asserts that the
statute of limitations has been tolled, it becomes the movant's burden to
"conclusively negate the tolling provision's application" before summary
judgment may be awarded. Allen v. Intercapital Lodge Ltd. P'ship,
66 S.W.3d 351, 353 (Tex. App.--Houston [14th Dist.] 2001, pet.
denied).

A. Basis Upon Which
This Summary Judgment Rests

Gill and Riccio's motion for
summary judgment specifically states that they are entitled to summary
judgment based on limitations because the time had run on the Frenches'
lawsuit and that due to the statements contained in the Frenches'
pleadings in the federal suit, the statutory tolling provision did not
apply.

B. Summary Judgment
Evidence

Gill and Riccio attached a
number of documents as summary judgment evidence, but rely largely on the
federal pleading: "Plaintiffs' Second Amended Original
Complaint."

That document was filed by
the Frenches in federal court January 28, 2004. In relevant part, it reads
as follows:

6. There will no
longer be diversity of citizenship between the parties to this
[federal] civil action with the joinder of Defendants, Brian James Gill
and Giuseppe V. Riccio, d/b/a Tigers Trucking Co. The amount in
controversy, exclusive of interest and costs, exceeds SEVENTY-FIVE
THOUSAND AND NO/100 DOLLARS ($75,000.00). Jurisdiction will no longer
exist pursuant to 28 U.S.C. § 1392 and the Plaintiffs request that
this proceeding be transferred to the State District Court in Wood County,
Texas.

Another piece of Gill and
Riccio's summary judgment evidence is the federal district court's "Order
Striking Plaintiffs' Second Amended Complaint." In relevant part, that
document includes the following language:

On January 14, 2004, the
Plaintiffs filed a motion for leave to file their second amended
complaint. The Court inadvertently granted said motion before the
Defendants in the case had adequate time to file their response. The
Court's Order (Docket No. 24) allowed the Plaintiffs leave to add
Brian James Gill and Giuseppe V. Riccio d/b/a Tigers Trucking Co. as
Defendants in this matter.

On January 30, 2004, the
Defendants filed the instant motion to strike the Plaintiffs' second
amended complaint, noting that they [Defendants] were not afforded an
opportunity to respond. Because the Court ruled on the Plaintiffs' motion
before the expiration of the Defendants' deadline to respond, the Court
will reconsider the Defendants' motion to strike as if it were their
original response to the Plaintiff's motion for leave to amend.

After reconsidering the
Plaintiffs' motion for leave to amend and the Defendants['] motion to
strike, it is clear to the Court that the former should be denied. The
additional Defendants that the Plaintiffs wish to add are not
indispensable and were clearly added solely for the purposes of defeating
diversity jurisdiction. Further, there has already been extensive
discovery in this case: the Plaintiffs and Defendant Omang have served and
responded to interrogatories and requests for production; Defendant Omang
has served depositions on written questions to 17 of the Plaintiffs'
healthcare providers, all of which have been answered; Defendant Omang has
served a deposition on written questions to the Plaintiffs' former
employer and has filed discovery pleadings regarding same with the Court;
the Plaintiffs and Omang have made not only their Initial Disclosures, but
also their Expert Disclosures, including production of all expert reports
and other materials.

As an equitable matter, the
Plaintiffs chose to seek damages from Omang and Mr. Henderson. They also
chose to pursue their claims in this Federal Court. To justify their
10-month-long delay in adding these nondiverse, dispensable parties to
their lawsuit, the Plaintiffs claim they just now discovered that they
need to join Mr. Gill and his employer, Giuseppe V. Riccio d/b/a
Tigers Trucking Co. However, the Plaintiffs and their counsel have known
of Mr. Gill, and all other witnesses to the accident, since January 30,
2002. In the subsequent two-year period, the Plaintiffs and their counsel
made no effort to contact Mr. Gill or his employer, much less join them in
this case. Meanwhile, Defendant Omang has expended a significant amount of
time and resources in discovery for this case and in preparing its defense
to this case.

Finally, the Plaintiffs have
not shown that they will be prejudiced or how they will be denied an
adequate judgment or an adequate remedy of their claims if Mr. Gill
and his employer are not joined as Defendants. Accordingly, the Court will
now vacate its previous order granting the Plaintiffs leave to
amend.

C.
The Frenches' Response to the Motion for Summary
Judgment

As its primary summary
judgment evidence, counsel for the Frenches filed his own affidavit in
which he stated in relevant part as follows:

12. "As I stated during the
oral argument on the MSJ prior to the appeal in this case, I did not add
Gill and Riccio to defeat jurisdiction. In fact, I had only recently
learned of their involvement and needed to file suit against them to toll
the statute of limitations and preserve Plaintiffs' rights."

13. "Further, the case
against Gill and Riccio was based on the same nucleus of operative facts
as the one against Henderson and Omang and I sought to avoid piecemeal
litigation of this matter. Filing it in federal court, whether it defeated
jurisdiction or not, was to keep the case as one."

14. "Moreover, I did not add
Gill and Riccio to defeat federal jurisdiction. I chose to file this case
initially in federal court as there was diversity of the initial parties.
I would not seek to intentionally disregard the proper jurisdiction in a
case I filed in federal court."

15. "Initially, I thought
that if jurisdiction was defeated, that the entire case would be
transferred to Wood County. I was relying upon the Freeport-McMoRan,
Inc. v. KN Energy case and thought that the federal court might have
been able to retain jurisdiction had it wanted to, but that the decision
would be up to the federal court. In the event the federal trial court
decided it did not want to retain jurisdiction, I requested a transfer to
state court."

16. "Indeed, in Plaintiffs'
Rejoinder to Defendants' Reply to Plaintiffs' Response to Defendants'
Motion for Summary Judgment, Plaintiffs argued that diversity was not
defeated as it was determined at the time of filing a lawsuit, based on
the same interpretation of Freeport-McMoran, Inc. v. K N Energy,
Inc., 498 U.S. 426, 111 S.Ct. 858, 860 (1991). My interpretation was
not an unreasonable one. Even the treatise O'Connor's Federal Rules *
Civil Trials (2003) states, relying upon Freeport-McMoran
that 'Diversity is determined as of the date the action is commenced.' See
page 83, a copy of which is attached hereto as Exhibit
A-5.["]

17. "I did not, in any event,
purposely ignore jurisdiction by filing in federal court. That is where
the case was pending originally and since the second set of Defendants to
be added were involved in the same accident, it only made sense to add
them to the lawsuit existing at the time, whether that meant the case
would remain in federal court or be transferred to state
court."

18. "I requested a transfer
to state court in the event the federal court determined that jurisdiction
was no longer appropriate in federal court. This was to conserve judicial
resources and keep the case, which had already been on file for 10 months
and for which most of the discovery was completed."

19. Defendants make the
following statement in their Motion for Summary Judgment at page 2 which
is patently false and without basis in fact: 'Clearly, Plaintiffs added
Mr. Gill and Mr. Riccio to destroy diversity jurisdiction.' Defendants do
not cite to any evidence to support this statement. Further, as explained
above, this is illogical since Plaintiffs were the ones who chose to file
in the federal court to begin with. It does not make sense that some 10
months later, well into the lawsuit, that Plaintiffs would then seek to
destroy the jurisdiction they chose."

. . . .

21. "Judge Steger's comment,
which was dicta, that Plaintiff's addition of Mr. Gill and Mr.
Riccio was 'for the purposes of defeating diversity jurisdiction,' was not
based on any findings of fact. No testimony was taken and there was no
basis upon which to make this comment. As demonstrated above, this is
illogical."

D. The Frenches'
Argument

The Frenches argue that the
language that they chose to use in their motions to the federal court did
not conclusively show that they intentionally disregarded proper
jurisdiction when they filed the first lawsuit. As previously discussed,
under that exception to the application of the tolling statute, if the
record affirmatively establishes that jurisdiction did not lie in the
tribunal in which the proceeding was originally filed, the original
lawsuit did not, as a matter of law, serve to toll limitations. Therefore,
the Frenches were time-barred from recovering from Gill and Riccio in
state court.

There are three separate
aspects to the Frenches' argument:

1) The pleadings in the
federal case cannot be classified as "judicial admissions"; thus, the
pleadings are not conclusive proof that the Frenches were aware of the
impact of what they were doing. As a result, summary judgment was
therefore improper.

2) There is "reliable
authority" to support the Frenches' counsel's belief that diversity would
not be destroyed by adding the two nondiverse parties.

3) The Frenches provided
summary judgment evidence in which their counsel stated that they did not
intentionally file the case in the wrong court in an effort to destroy
jurisdiction.

1. Was There a
Judicial Admission?

Initially, we will look at
whether the document itself constitutes a judicial admission. The general
language involving judicial admissions states that:

Assertions of fact, not plead
in the alternative, in the live pleadings of a party are regarded as
formal judicial admissions. A judicial admission that is clear and
unequivocal has conclusive effect and bars the admitting party from later
disputing the admitted fact.

Holy Cross Church of God
in Christ v. Wolf, 44 S.W.3d 562, 568 (Tex. 2001) (citations
omitted).

In a more typical scenario,
courts acknowledge that although pleadings generally do not constitute
summary judgment proof, if a plaintiff's pleadings contain judicial
admissions negating a cause of action, summary judgment may properly be
granted on the basis of the pleadings. Commercial Structures &
Interiors, Inc. v. Liberty Educ. Ministries, Inc., 192 S.W.3d 827,
835 (Tex. App.--Fort Worth 2006, no pet.); see Brooks v. Ctr. for
Healthcare Servs., 981 S.W.2d 279, 283 (Tex. App.--San Antonio 1998,
no pet.).

All of those situations,
however, explain the use of pleadings by a party in the suit in which they
were filed. This situation is, however, different. The pleading is not
from this case. It is not being used to prove or disprove the cause of
action based on the Frenches' allegations or statements of fact about the
cause of action. It is used by the Frenches to prove that there was a
prior case in which the new defendants had been sued; thus, when those
defendants were dropped, the tolling provision allowed the Frenches to
bring suit in state court. It is then used by Gill and Riccio as proof
that the Frenches knew that their addition of Gill and Riccio as new
defendants would destroy diversity and nevertheless added them in;
therefore, the exception to the tolling provision applies, and the
Frenches' state lawsuit is untimely brought.

As Gill and Riccio point out,
a number of facts were pled by the Frenches in the federal complaint,
including the names and citizenship of the defendants. Based on those
factual statements, the Frenches then stated that no diversity of
citizenship would continue to exist between the parties and asked the
federal court to transfer the proceeding to state district court.

The statement that diversity
would be destroyed is not a factual statement. Rather, it is a legal
statement or conclusion based on stated facts. As such, it does not fit
within the definition of a judicial admission.

The Frenches' counsel goes
further to maintain that the statement in federal court pleadings could
not possibly be a judicial admission because it is not a live pleading (in
this lawsuit). That aspect of his argument is not persuasive. The facts
stated in the pleading are not contested and were not part of alternative
pleadings. The fact that the federal lawsuit is no longer being pursued is
not a reason to conclude that the facts stated have no further usefulness
to prove the Frenches' intent and knowledge when causing them to be
filed.

In applying this particular
statute, as pointed out by Gill and Riccio, one primary way to prove
intentional disregard is by looking at the face of the pleadings filed in
the first lawsuit. See Gordon v. Staudt, No. 03-02-00768-CV, 2004
Tex. App. LEXIS 1685, at *9 (Tex. App.--Austin Feb. 20, 2004, pet.
denied); Parker, 216 S.W.3d at 910; Williamson v. John Deere
Co., 708 S.W.2d 38, 39-40 (Tex. App.--Tyler 1986, no writ) (all using
the pleadings from the prior lawsuits to determine limitations--and the
application of the exceptions--under this section).

Accordingly, although it does
appear that the pleading did make certain formal judicial admissions of
fact, the part upon which Gill and Riccio rely is not an admission of
fact; it is, rather, a statement of the application of the law to those
facts.

It is very clear, however,
that the pleading is a statement by the Frenches' counsel reflecting his
understanding that his action in including Gill and Riccio as defendants
would destroy diversity; the case thereafter lacking diversity of parties,
the jurisdiction of the federal court to hear the suit would be
destroyed.
(2)

Although the statement is not
a "fact" as to actual jurisdictional authority, it may well be a "fact" as
to whether the Frenches filed their action against Gill and Riccio in
federal court with intentional disregard of its jurisdiction to hear the
case.

E. Determining
Intent

Even though the pleading
filed by the Frenches in federal court is not a judicial admission, it
nonetheless provides summary judgment evidence of much more than simply
the date of its filing. The question before us is whether the Frenches'
counsel's unequivocal and clear statement that adding the new players
would defeat jurisdiction conclusively shows that he made the filing with
intentional disregard of the proper jurisdiction.

On its face, it does. The
filing of the petition which included nondiverse parties clearly sets out
the facts defeating diversity and then correctly states the legal impact
of those facts. It then goes on to, based on the termination of the
court's jurisdiction, request the federal court to transfer the proceeding
to state court.

The Frenches argue that
because they have provided summary judgment evidence by their counsel's
affidavit, they have sufficiently explained the motive for filing in
federal court to enable them to avoid summary judgment. Looking at
counsel's affidavit critically, it states that he did not intend to add
the additional parties in an effort to defeat jurisdiction; rather, that
he did so to toll limitations and that he had thought that if jurisdiction
was defeated, the federal court could nonetheless either transfer the case
to state court or retain jurisdiction. He states repeatedly in multiple
paragraphs that he did not ignore jurisdiction.

The Frenches' counsel's
affidavit does not directly address the dispositive issue. It answers
another and different question: whether he had the intention to defeat
jurisdiction. Counsel's affidavit states that he did not intend to defeat
jurisdiction.

The question here is not
whether he intended to defeat jurisdiction but whether he filed in
conscious disregard of proper jurisdiction. Those are different
propositions. Although these arguments bear some real similarity, they do
not intersect.

The Frenches' counsel's
affidavit also stated that he had believed that the federal court might
have been able to retain jurisdiction over the entirety had it chosen to
do so. That was a mistake in an understanding of the law, not a mistake of
fact. As pointed out by the Eastland court in Parker, the issue
focused on the question of whether the record showed that claimant had
made "a good faith mistake" by initially filing in a (federal) court
without jurisdiction over the claim.
(3) The court
found that the claimant had not acted in good faith (recognizing that the
party's factual complaint, if taken as true, affirmatively established
that the other tribunal had no jurisdiction) and that it was not necessary
for the defendants to prove that Parker "consciously appreciated this
because her knowledge of the law is imputed." Parker, 216
S.W.3d at 910. The court concluded that absent some
evidence of accident or mistake of fact, the filing of a suit with a
pleading which, on its face, establishes the court's lack of jurisdiction
does not invoke the tolling provision.

In its analysis, the
Parker court recognized that Parker's construction of the section
that he claimed provided jurisdiction was incorrect, and that whether
Parker was conscious of this was immaterial, due to the fact that all
persons are presumed to know the law and are charged with knowledge of
statutory provisions.
(4) Id. at 911; Virtual Healthcare Servs., Ltd. v.
Laborde, 193 S.W.3d 636, 644 (Tex. App.--Eastland 2006, no pet.). All
are presumed to know the law. Redmon v. Griffith, 202 S.W.3d 225,
238 (Tex. App.--Tyler 2006, pet. denied).
(5)

In this case, the Frenches'
counsel argues that he misunderstood the import of the law, and that a
question of fact exists as to whether he simply made a mistake or intended
to defeat the jurisdiction of the federal court. We conclude that this is
a distinction without a difference. He is charged with knowledge of the
law, and there is no suggestion that there were any mistaken
understandings of fact (such as the residence of the parties or the situs
in which an event occurred) that could support any suggestion of mistaken
application of that law. The only evidence on point thus shows that his
filing was made in intentional disregard of the jurisdiction of the
federal court. Because there was intentional disregard of the
jurisdiction, the tolling does not occur and limitations barred the
prosecution of the lawsuit.

We affirm the judgment of
the trial court.

Bailey C. Moseley

Justice

Date Submitted: April 2,
2008

Date Decided: April 16, 2008

1. French v. Gill, 206 S.W.3d 737 (Tex.
App.--Texarkana 2006, no pet.).

2. Gill and Riccio point out that the
Frenches never argued to the trial court that the pleading could not be
considered as summary judgment proof and also points to our opinion in the
earlier appeal, in which we also pointed out that the Frenches had offered
the documents for the summary judgment proceedings, and declining to
"reward the Frenches for complaining the trial court erred by considering
the very evidence they originally offered and certified as authentic."
French, 206 S.W.3d at 741.

3. Parker, 216 S.W.3d at 910.

4. N. Laramie Land Co. v.
Hoffman, 268 U.S. 276, 283 (1925); Greater Houston Transp. Co. v.
Phillips, 801 S.W.2d 523, 525 n.3 (Tex. 1990).

5. It is a maxim that all persons are
presumed to know the law. Greater Houston Transp. Co., 801 S.W.2d
at 528 n.3 (citing E.H. Stafford Mfg. Co. v. Wichita Sch. Supply
Co., 118 Tex. 650, 23 S.W.2d 695, 697 (1930)). A parallel
maxim is that ignorance of the law is no excuse. Cherokee Water Co. v.
Forderhause, 727 S.W.2d 605, 615 (Tex. App.--Texarkana 1987),
rev'd on other grounds, 741 S.W.2d 377 (Tex. 1987); Goss v.
Bobby D. Assocs., 94 S.W.3d 65, 69 (Tex. App.--Tyler 2002, no
pet.).