Childress v. Regalado

LORA RAE CHILDRESS, Appellant, v. DANNY RAY REGALADO, Appellee.

NUMBER 13-17-00704-CV

COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI - EDINBURG

August 23, 2018

On appeal from the 25th District Court of Gonzales County, Texas.

MEMORANDUM OPINION

Before Justices Contreras, Longoria, and Hinojosa

Memorandum Opinion by Justice Contreras

Appellant Lora Rae Childress appeals from a default divorce decree entered in favor of appellee Danny Ray Regalado. By one issue, Lora argues the trial court erred in denying her motion for new trial.¹ We reverse and remand.

I. BACKGROUND

Lora and Danny married in 1999 and had two children. On February 22, 2017, Danny filed a petition for divorce against Lora on the grounds that their marriage had become insupportable and that they had lived apart without cohabitation for at least three years. See TEX. FAM. CODE ANN. §§ 6.001, 6.006 (West, Westlaw through 2017 1st C.S.). The first attempt to serve Lora with notice of the suit was returned "unexecuted" because the address provided in Danny's original petition was incorrect, and Danny filed an amended petition in which he provided a different address for Lora. Lora, although duly and properly served with the amended petition, did not file an answer and did not appear at the final hearing on Danny's amended divorce petition.²

On September 22, 2017, the trial court signed a final decree of divorce in which it appointed Lora and Danny as joint managing conservators of their two minor children, adopted a standard possession order, awarded Lora $600 per month in child support, assigned Lora's residence as the primary residence of the children, awarded Danny a vehicle, and awarded the parties' personal effects to the party who had possession. As to the division of the marital estate, the divorce decree did not award any specific property to Lora and stated "no community property other than personal effects has been accumulated by the parties."³

Lora filed a motion for a new trial on October 20, 2017 stating she was never personally served with process and that she only learned about the court date after ithappened. The motion argued that a new trial should be granted because Danny did not introduce evidence to support an unequal division of the marital estate and because the award of child support was below the statutory guidelines. See TEX. FAM. CODE ANN. §§ 7.001, 154.125 (West, Westlaw through 2017 1st C.S.)

Lora attached an affidavit to her motion in which she stated that she was not served with notice of the lawsuit, but she acknowledged that there was a citation in the record which indicated otherwise. Lora explained that Danny and she had jointly approached an attorney in 2015 to prepare an agreed divorce decree and assist them with the divorce process. According to Lora, she signed a divorce decree and a waiver of service as a result, but when she asked Danny if he had filed the divorce papers in August of 2017, he responded that "he didn't have time to worry about the divorce because he was dealing with other child support issues with another woman." Lora explained that later, after the trial court granted the divorce, she learned that Danny had hired a different attorney and filed suit. Upon learning this, Lora searched a stack of papers at her mother's house and located a citation for the divorce suit. Lora stated in her affidavit that she spoke with her brother and believed he may have accepted the citation on her behalf.

In support of her motion for new trial, Lora argued in her affidavit that the divorce decree signed by the trial court awarded Danny with most of the marital estate, including the vehicle she drove, and that the "division is not fair, just, nor equitable." Lora elaborated that Danny made no allegations in support of an unequal division of the marital estate; that he was the primary wage earner during the marriage; that he did not share much, if any, of their financial information with her; and that she was unable to conductdiscovery to determine the size of the marital estate. Lora also argued that the child support had been calculated incorrectly because Danny's annual income was reported as $100,000 in his 2015 tax return. Finally, Lora stated that she was "willing and ready to reimburse [Danny] all reasonable expenses incurred in obtaining the default." Danny did not file a response to Lora's motion for new trial, and the motion was overruled by operation of law. See TEX. R. CIV. P. 329b(c). This appeal followed.

II. DISCUSSION

A. Standard of Review and Applicable Law

We review a trial court's decision to overrule a motion to set aside a default judgment and grant a new trial for abuse of discretion. Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922, 926 (Tex. 2009) (per curiam); see Anderson v. Anderson, 282 S.W.3d 150, 152-53 (Tex. App.—El Paso 2009, no pet.). When a default judgment is attacked by a motion for new trial, the critical question is: "Why did the defendant not appear?" Sutherland v. Spencer, 376 S.W.3d 752, 755 (Tex. 2012) (quoting Fid. & Guar. Ins. v. Drewery Constr. Co., 186 S.W.3d 571, 574 (Tex. 2006) (per curiam)); see Lynch v. Lynch, 540 S.W.3d 107, 121 (Tex. App.—Houston [1st Dist.] 2017, pet. filed). If the defendant did not appear because he or she never received the suit papers, then the court should generally set aside a default judgment. Sutherland, 376 S.W.3d at 755. But if the defendant received the suit papers and has some other reason for not appearing, then the default judgment will be set aside only if the defendant proves the three prongs of the Craddock test. Id. (citing Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex. 1939)).

In Craddock v. Sunshine Bus Lines, Inc., the Texas Supreme Court established the standard for setting aside a default judgment. 133 S.W.2d at 126. Under the Craddock test, post-answer as well as no-answer default judgments should be vacated and a new trial granted when the defaulting party establishes that: (1) the failure to answer or to appear was not intentional, or the result of conscious indifference, but was due to mistake or an accident; (2) the motion for a new trial sets up a meritorious defense; and (3) granting a new trial will not cause delay or work other injury to the prevailing party. In re R.R., 209 S.W.3d 112, 115 (Tex. 2006) (per curiam); Craddock, 133 S.W.2d at 126. When a defaulting party satisfies all three prongs, a trial court abuses its discretion if it fails to grant a new trial. Dolgencorp, 288 S.W.3d at 926; Old Republic Ins. v. Scott, 873 S.W.2d 381, 382 (Tex. 1994) (per curiam).

B. Analysis

1. Consciously Indifferent or Intentional Conduct

Under the first prong of the Craddock test, the trial court was required to determine whether Lora's failure to answer before judgment was rendered was either intentional or the result of conscious indifference on her part. See Craddock, 133 S.W.2d at 126. In making this determination, a court must look to the knowledge and acts of the defendant. Dir. State Emp. Workers' Comp. Div. v. Evans, 889 S.W.2d 266, 269 (Tex. 1994); Martinez v. Martinez, 157 S.W.3d 467, 470 (Tex. App.—Houston [14th Dist.] 2004, no pet.). If a defendant's factual assertions are not controverted by the plaintiff, the defendant satisfies her burden if she has set forth facts which, if true, negate a finding of intentional or consciously indifferent conduct. In re R.R., 209 S.W.3d at 115; Evans, 889 S.W.2d at 269. Consciously indifferent conduct occurs when "the defendant knew it wassued but did not care." Sutherland, 376 S.W.3d at 755 (quoting Drewery, 186 S.W.3d at 576); Lynch, 540 S.W.3d at 122. Generally, "some excuse, although not necessarily a good one, will suffice to show that a defendant's failure to file an answer was not because the defendant did not care." Sutherland, 376 S.W.3d at 755 (quoting In re R.R., 209 S.W.3d at 115); see also O'Connell v. O'Connell, 843 S.W.2d 212, 217 (Tex. App.—Texarkana 1992, no writ) ("The first prong of the Craddock test should be applied liberally to favor the movant."). Further, "conscious indifference means more than mere negligence." Smith v. Babcock & Wilcox Constr. Co., 913 S.W.2d 467, 468 (Tex. 1995) (per curiam) (citing Ivy v. Carrell, 407 S.W.2d 212, 213 (Tex. 1966)). "A failure to appear is not intentional or due to conscious indifference within the meaning of the rule merely because it is deliberate; it must also be without adequate justification." Smith, 913 S.W.2d at 468 (citing Bank One, Tex. N.A. v. Moody, 830 S.W.2d 81, 84 (Tex. 1992)). "Proof of such justification—accident, mistake, or other reasonable explanation—negates the intent or conscious indifference for which reinstatement can be denied." Id.

Here, Lora's assertions are uncontroverted by Danny. She states that she was not personally served, but that she believes her brother received the citation. Lora also states that she was not aware that Danny had filed suit until after the trial court rendered its judgment. Likewise, she was not aware of the citation's presence at her mother's house until after the divorce decree was signed by the trial court. According to Lora's affidavit, she asked Danny whether he had filed for divorce in August of 2017—one month before the trial court signed the divorce decree—and he responded by telling her that "he didn't have time to worry about the divorce because he was dealing with other child support issues with another woman." Thus, based on these uncontroverted facts, Lora did nothave knowledge that she had been sued. Accordingly, Lora's excuse, if true, negated any intentional or indifferent conduct on her part. See Milestone Operating, Inc. v. ExxonMobil Corp., 388 S.W.3d 307, 310 (Tex. 2012) (per curiam) (concluding that failure to answer was neither intentional nor consciously indifferent because of appellant's uncontroverted claim that he did not remember whether he was served or whether he had turned over suit papers to legal counsel...