Opinion
No. 12-05-00216-CV
Opinion delivered June 30, 2006.
Appeal from the County Court at Law Henderson County, Texas.
Panel consisted of WORTHEN, C.J., and GRIFFITH, J.
MEMORANDUM OPINION
Lyndel Massey appeals a postanswer default judgment rendered against him. The trial court awarded actual damages in favor of Appellee, Kevin L. Massey, and ordered that Lyndel take nothing. In two issues, Lyndel challenges the trial court's refusal to grant his motion for new trial and the damage amount awarded. We reverse and remand for a new trial.
Background
Lyndel Massey brought suit against Kevin L. Massey in small claims court for dishonoring a check in the amount of $3,750.00. Lyndel's pleadings stated that Kevin borrowed the money to close a real estate transaction and then postdated a check payable to Lyndel for reimbursement. However, Kevin stopped payment on the check and never repaid the amount owed to Lyndel. Kevin denied the allegations and filed a counterclaim against Lyndel for conversion of personal property. Judgment was rendered in favor of Lyndel in both causes. Kevin appealed to the county court at law where the causes were consolidated.
See TEX. GOV'T CODE ANN. § 28.052(b) (Vernon Supp. 2005).
Although both parties were originally represented by counsel, Lyndel agreed to allow his counsel to withdraw. At a hearing held on March 21, 2005, Kevin appeared and offered his opinion on the value of the farm equipment he claimed Lyndel converted. Lyndel did not appear at the hearing and, thus, failed to offer contradictory proof on the conversion counterclaim or proof on his original claim against Kevin for dishonoring the check. The trial court granted a default judgment against Lyndel. In the trial court's final judgment signed April 11, 2005, the court found that Lyndel's allegations against Kevin for dishonoring a check were not proven and ordered that Lyndel take nothing on his claim against Kevin. The trial judge also entered judgment against Lyndel for $16,250.00 in damages for conversion of a "Kabota" tractor, a four foot tiller, a four foot box blade, a nine inch auger, a "Chippewa" grinder, and a power washer. Lyndel remained unrepresented by counsel until after the default judgment was entered against him.
On May 10, 2005, after receiving notification from the court of the default judgment, Lyndel timely filed a motion for new trial. In his motion, Lyndel stated that he had not received notice of the trial date and requested a new trial. Kevin filed a response to Lyndel's motion for new trial, stating that his attorney notified Lyndel of the trial setting in a letter dated December 17, 2004. The court granted a hearing on the matter.
On June 24, the trial court conducted a hearing by telephone conference. In that hearing, Lyndel admitted that he received the December 17 letter from Kevin's attorney. The letter stated that trial had been set for March 21, 2005. However, Lyndel said that upon receiving that letter, he mistakenly thought that Kevin was requesting March 21 as the date for trial. He called the clerk of the court in an attempt to verify the trial date and time. He was told that no date had been set for trial, but that the court clerk would notify him when a date was established. Lyndel never received such a notification. His first notice was a copy of the default judgment.
Lyndel testified further that he was retired and he frequently traveled. In particular, at the time of trial, Lyndel said that he was traveling in "the big bend country." He had been traveling for most of January, February, March, and April of that year and denied receiving or refusing any other letters from Kevin's counsel. Lyndel testified that he would have arranged to be in town for court had he been aware of the trial date. He claimed that he did not consciously ignore the court's trial setting nor was he trying to be consciously indifferent to the setting. Lyndel said that his failure to appear in court was due to a mistake or misunderstanding. He also said he was not represented by trial counsel at the time of the trial. Concerning Kevin's counterclaim, Lyndel denied converting the farm equipment. He requested the court to set aside the default judgment and grant a new trial.
Kevin's attorney testified that he personally executed and supervised the mailing of the letter notifying Lyndel of the court's trial date. Counsel noted that he had filed with the court a copy of the return receipt showing that Lyndel received the December 17 letter on December 20. Kevin's attorney also filed copies of several other envelopes addressed to Lyndel, postmarked in February and March 2005, that were marked by the United States Postal Service as "unclaimed," "ref," or "refused." He contended that Lyndel had ignored mail from him. Kevin's attorney conceded, however, that Henderson County courts had proven to be confusing to him, particularly in light of the transfer of the case from small claims court to a county court at law. He said he "understand[s] how Mr. Massey might have encountered the same confusion."
The trial court denied Lyndel's motion for new trial. On July 8, 2005, Lyndel filed a motion for rehearing with the trial court. That motion was denied by operation of law. This appeal followed.
Motion for New Trial
In his second issue, Lyndel contends that the trial court erred in denying his motion for new trial. Kevin did not file an appellate brief.
Standard of Review and Applicable Law
A trial court's decision to deny a motion for new trial is reviewed for abuse of discretion. See Dir., State Employees Workers' Comp. Div. v. Evans , 889 S.W.2d 266, 268 (Tex. 1994). Lyndel's motion for new trial asserts that the trial court improperly granted a default judgment. A default judgment should be set aside and a new trial ordered under the following circumstances:
1. The failure of the defendant to answer before judgment was not intentional or the result of conscious indifference on his part, but was due to a mistake or an accident;
2. The motion for a new trial sets up a meritorious defense; and
3. The motion is filed at a time when the granting thereof will cause no delay or otherwise work an injury to the plaintiff.
Craddock v. Sunshine Bus Lines, Inc. , 134 Tex. 388, 133 S.W.2d 124, 126 (1939); see also Cliff v. Huggins , 724 S.W.2d 778, 779 (Tex. 1987) (the prerequisites for granting a motion to set aside a trial court's default judgment also apply to a postanswer default judgment). The historical trend in default judgment cases is to liberally grant new trials. Miller v. Miller , 903 S.W.2d 45, 47 (Tex.App.-Tyler 1995, no writ). This is because the law prefers that cases be disposed on their merits wherever possible, rather than by default. See Reed v. City of Dallas , 774 S.W.2d 384, 386 (Tex.App.-Dallas 1989, writ denied). As such, where the elements of the Craddock test are satisfied, a trial court abuses its discretion by not granting a new trial. Bank One, Texas, N.A. v. Moody , 830 S.W.2d 81, 85 (Tex. 1992).
Application of Law to Facts
Conscious Indifference
"In determining whether the failure to appear was due to intentional disregard or conscious indifference[,] we must look to the knowledge and acts of the defendant." Strackbein v. Prewitt , 671 S.W.2d 37, 39 (Tex. 1984). Conscious indifference requires more than negligence; some excuse, but not necessarily a good excuse, is enough to show a lack of intentional conduct or conscious indifference. Perry v. Stanley , 83 S.W.3d 819, 827 (Tex.App.-Texarkana 2002, no pet.).
In this case, Lyndel testified that his failure to appear at trial was based on a mistake or accident. He said he believed the December 17 letter from Kevin's attorney was informing him of the date that Kevin had requested for trial — not a date that had actually been set. In response to the letter, Lyndel called the clerk of the court to verify the date. He was told that the court had not set a date yet. The clerk also told Lyndel that he would be informed by the court when a date had been set. Kevin's response to Lyndel's motion for new trial stated that Lyndel received the December 17 letter notifying him of the trial date and that he did not claim several other letters. Lyndel denied refusing any mail from Kevin's attorney and explained that he was traveling during that time. We conclude that Lyndel's testimony concerning his confusion about the December 17 letter and his ensuing telephone conversation with the court clerk is sufficient to support his contention that his failure to appear was the result of a mistake or accident.
Meritorious Defense
Lyndel contends that his motion for new trial set up a meritorious defense. He asserted that he can prove Kevin owed him $3,750.00 and that Kevin stopped payment on a check in that amount and has yet to repay the money owed. Lyndel denied having possession of the farm equipment, asserted that he never had possession, and thus, had not failed to return the equipment to Kevin. Lyndel challenged the fair market value of the equipment as given by Kevin. Further, Lyndel alleged that another party (unnamed) might have an ownership interest in the farm equipment. A party is not required to prove the truth of a meritorious defense before the party is entitled to a new trial. See Miller , 903 S.W.2d at 48. However, a meritorious defense is one that, if proven, would cause a different result on retrial of the case. Id. We conclude that Lyndel set up a meritorious defense in his motion for new trial.
Delay or Injury
Finally, in his motion for new trial, Lyndel stated that he was ready to proceed to trial on the merits. He also offered to pay Kevin's expenses in obtaining the default judgment. Once Lyndel alleged that granting his motion would not cause delay or injury, the burden shifted to Kevin to prove such prejudice. See Evans , 889 S.W.2d at 270. Kevin's response to Lyndel's motion for new trial is silent as to any undue delay or prejudice he might suffer as a result of a new trial. Consequently, Kevin did not meet his burden of showing injury in response to Lyndel's motion for new trial.
Lyndel satisfied the Craddock requirements; thus, we conclude that the trial court abused its discretion by denying Lyndel's motion for new trial. Accordingly, Lyndel's second issue is sustained.
DISPOSITION
Because we have sustained Lyndel's second issue and it is dispositive in this case, we need not address his first issue. See TEX. R. APP. P. 47.1. We reverse the judgment of the trial court and remand for a new trial.