Court of Appeals of Texas,

Eastland.

Gregory M. SALEME, Appellant

v.

Michael GONZALES and Donna Gonzales, Appellees.

No. 11–98–00245–CV.

|

Jan. 13, 2000.

Attorneys & Firms

Kevin M. Fuller, for Gregory M. Saleme.

Stephen W. Johnson, for Michael and Donna Gonzales.

Panel consists of: ARNOT, C.J., and WRIGHT, J., and McCALL, J.

OPINION

TERRY McCALL, Justice.

*1 Gregory M. Saleme appeals the trial court’s post-answer default judgment in favor of Michael and Donna Gonzales. We hold that the trial court abused its discretion in denying Saleme’s motion for new trial, and we reverse and remand.

Procedural History

The Gonzaleses sued Saleme for breach of an oral contract. The parties had agreed that Saleme would buy a business, the “Zone” bar, from the Gonzaleses. The petition alleged that Saleme paid $5,300 for 50 percent of the business and agreed to pay $9,000 for the remainder. The petition also alleged that Saleme failed to meet his obligations under the oral agreement and breached the contract. Saleme first filed an answer and later filed a counterclaim for a set off against any damages under the contract. Saleme alleged that he had paid certain debts owed by the Gonzaleses.

The trial court permitted Saleme’s attorney to withdraw from the case, and Saleme proceeded pro se. The case was set for a bench trial on January 21, 1998. The Gonzaleses’ attorney was scheduled to be in another court trying a felony case on that date, and he sought and received a continuance. On June 16, 1998, the case was reset for a bench trial on July 1, 1998. On June 26, 1998, Saleme sent the trial court the following letter (omitting the formal parts):

In regards to the above referenced I, Gregory M. Saleme, am respectfully requesting a later court date. Due to an unavoidable emergency appendectomy and exploratory surgery on June 20, 1998 and further complications following the procedure, I have been unable to properly prepare for the scheduled July 1st trial date. I pray that you would allow for an extension due to these circumstances so that I may be better able to present myself.

On July 1, 1998, the trial court called the case for trial. Saleme was not present. Michael Gonzales testified, and the trial court granted a post-answer default judgment. Subsequently, Saleme retained an attorney and filed a motion for new trial. He argued that the trial court should grant him a new trial because his absence was not the result of conscious indifference, but rather of a “mistake concerning the effect of [his] communication” with the trial court. He also asserted that the trial court’s refusal to grant a continuance prejudiced him by preventing him from presenting the “meritorious defenses” of lack of capacity and right to a set off. Saleme offered to pay $500 to the Gonzaleses to compensate them for the inconvenience of preparing for trial and responding to the motion for new trial. He also requested that the trial court reset the case for trial at the earliest possible date. Saleme attached a copy of “contract obligations” between him and the Gonzaleses to his motion for new trial. He also attached copies of a letter from his doctor, his letter to the trial court requesting a continuance, and checks purporting to support his claim for a set off. The motion for new trial was verified.

*2 The Gonzaleses filed a response to Saleme’s motion that included affidavits from Michael and his attorney. Neither affidavit controverted Saleme’s assertion that he did not understand the “effect” of his letter to the trial court. Michael’s affidavit contained facts to controvert Saleme’s claims of lack of capacity and set off. His attorney’s affidavit pointed out that he did not receive a copy of Saleme’s letter to the trial court until the day before trial and set forth facts to controvert the adequacy of $500 as compensation for the inconvenience of preparing for trial and responding to the motion for new trial.

The trial court denied the motion for new trial and sent the parties the following letter (omitting the formal parts):

The Court finds that Defendant totally failed to comply with the Statutory Requirements for filing an Application For Continuance.

Further, the Court believes that it is conscious indifference to make no effort to find out what the legal procedure is, and simply mailing a letter with no follow up and making the assumption that its [sic] a cure all.

The Motion for New Trial is Denied. A copy of the signed order is enclosed.

Saleme argues in his second point that the trial court erred in failing to grant his motion for new trial.

Standard of Review

The requirements set forth in Craddock v. Sunshine Bus Lines, 133 S.W.2d 124 (Tex.1939), governing the setting aside of no-answer default judgments, also apply to post-answer default judgments. Cliff v. Huggins, 724 S.W.2d 778, 779 (Tex.1987); Grissom v. Watson, 704 S.W.2d 325, 326 (Tex.1986). To obtain a new trial, a defendant must show that: (1) the default judgment was not a result of his conscious indifference, but was a result of mistake or accident; (2) the defendant has a meritorious defense against liability; and (3) a new trial will not prejudice the plaintiff and will avoid injustice to the defendant. Craddock v. Sunshine Bus Lines, supra at 126. If all three elements are shown, the trial court abuses its discretion by denying a motion for new trial. Director, State Employees Workers’ Compensation Division v. Evans, 889 S.W.2d 266, 270–71 (Tex.1994); Craddock v. Sunshine Bus Lines, supra.

Excuse for Failure to Appear

With regard to the first element of the Craddock test, any excuse for the failure to appear, however slight, that shows mistake, accident, or negligence, rather than conscious indifference, will suffice. The Craddock court noted that the “press of business resulting from [a] storm certainly constituted some excuse for the oversight.” Craddock v. Sunshine Bus Lines, supra at 126. (Emphasis added) When the Beaumont court held that the proper test was whether the failure to appear was due to the party’s fault or negligence, the Texas Supreme Court stated that the appropriate standard was conscious indifference and that the record in the case disclosed only fault or negligence and not intentional conduct in failing to appear. Ivy v. Carrell, 401 S .W.2d 336, 338 (Tex.Civ.App.-Beaumont), aff’d on other grounds, 407 S.W.2d 212, 214 (Tex.1966). Finally, the Texas Supreme Court has more recently held that the failure of an attorney to calendar a trial setting, when inadvertent, would suffice to establish a lack of conscious indifference and to satisfy the first element of Craddock. Director, State Employees Workers’ Compensation Division v. Evans, 889 S.W.2d at 269.¹ In short, inadvertence, mistake, and negligence, no matter how seemingly unforgivable, will satisfy the first element of Craddock.

*3 It should be noted that, when the plaintiff files an affidavit or presents evidence to controvert the lack of conscious indifference, the trial court is free to weigh the evidence and make a factual determination. Otherwise, the trial court must accept the defendant’s factual assertions as true. See Director, State Employees Workers’ Compensation Division v. Evans, 889 S.W.2d at n. 2. As noted above, however, the Gonzaleses’ response to the motion for new trial did not controvert Saleme’s assertions of a lack of conscious indifference. Saleme’s motion shows that he misunderstood the procedure for obtaining a continuance. The courts have previously forgiven greater missteps made by attorneys. Except for the fact that Saleme was a pro se litigant, the facts in this case are little different from those in Smith v. Babcock & Wilcox Construction Company, Inc., 913 S.W.2d 467, 468 (Tex.1995), where the Supreme Court held that an attorney’s belief, “based upon his credible explanation, that the court would grant a continuance” if he were absent from trial, satisfied the first element of Craddock . Although the Gonzaleses argues that Saleme’s letter to the trial court shows that he knew he should be ready for trial on July 1, 1998, Saleme’s mistaken belief about the effect of his letter is dispositive here. Saleme satisfied the first element of Craddock.

Meritorious Defense

The second element of Craddock, setting up a meritorious defense, is not as difficult to establish as the first. Chief Justice Calvert wrote:

We note again the specific language of Craddock that a new trial should be granted to a defaulting defendant if his motion “sets up a meritorious defense.” This does not mean that the motion should be granted if it merely alleges that the defendant “has a meritorious defense.” The motion must allege facts which in law would constitute a defense to the cause of action asserted by the plaintiff, and must be supported by affidavits or other evidence proving prima facie that the defendant has such meritorious defense. (Emphasis in original)

Ivy v. Carrell, 407 S.W.2d at 214. The trial court may only look to the proof offered by the defendant to set up a defense; the trial court may not consider any controverting proof offered by the plaintiff. Director, State Employees Workers’ Compensation Division v. Evans, 889 S.W.2d at 270; Estate of Pollack v. McMurrey, 858 S.W.2d 388, 392 (Tex.1993).

Saleme’s verified motion for new trial states that he entered a written contract with the Gonzaleses for the purchase of the bar. The motion also states that Saleme cannot be held personally liable on the contract because it was made between the Gonzaleses and Saleme’s corporation. The Gonzaleses did controvert the facts supporting both these defenses; but, as noted above, the trial court may only consider the facts set forth in Saleme’s motion. Even if he were found to be personally liable on the contract, Saleme has asserted that the agreement was governed by a written instrument. The Gonzaleses sued Saleme for breach of an oral agreement. Furthermore, Saleme alleged facts in his verified motion that would establish his right to a set off if true. The Gonzaleses’ response does not controvert Saleme’s right to a set off, it merely disputes the amount of set off to which he is entitled. Saleme has “set up” three possible meritorious defenses under the second element of Craddock.²

Injury to Plaintiff/ Injustice to Defendant

*4 The third element of Craddock requires the defendant to allege that the granting of a new trial will not injure the plaintiff’s presentation of his case, such as causing the loss of a witness or valuable evidence. Director, State Employees Workers’ Compensation Division v. Evans, 889 S.W.2d at 270. The third element involves an equitable principle, the goal of which is not to “unduly delay or injure the plaintiff by granting the motion.” Director, State Employees Workers’ Compensation Division v. Evans, 889 S.W.2d at 270. Once the defendant alleges that no injury will result to the plaintiff, the burden shifts to the plaintiff to show otherwise. Director, State Employees Workers’ Compensation Division v. Evans, 889 S.W.2d at 270.

In the present case, Saleme offered in his motion for new trial to pay $500 to the Gonzaleses as compensation for the inconvenience of preparing for trial on July 1, 1998, and responding to the motion for new trial. Saleme also requested that the trial court set the new trial as soon as possible after the hearing on the motion for new trial. Michael’s affidavit did not set forth any facts to establish that a new trial would “unduly delay or injure” his case. The Gonzaleses’ attorney’s affidavit only disputed the adequacy of the offer of $500 to compensate him for time spent preparing for trial. See Director, State Employees Workers’ Compensation Division v. Evans, 889 supra n. 3. Nothing in the record suggests that a new trial put promptly on the docket would have worked an injury to the plaintiffs. Given the fact that Saleme is entitled to some amount of set off, the failure to receive a new trial would work an injustice against him. Saleme met the requirements of the third element of Craddock.

This Court’s Ruling

Because Saleme met all three elements of Craddock, the trial court abused its discretion in denying the motion for new trial. We sustain Saleme’s second point of error. We need not consider his remaining points. TEX.R.APP.P. 47.1. The judgment of the trial court is reversed, and the cause is remanded for further proceedings consistent with this opinion.

	Footnotes
1		For a better description of the negligence of the attorney involved, see the opinion of the court of appeals in Director, State Employees Workers’ Compensation Division v. Evans, 835 S.W.2d 230 (Tex.App.-Waco 1992), rev’d and remanded, 889 S.W.2d 266 (1994).
2		We note that the Gonzaleses did not brief any arguments to this court concerning whether Saleme had set up any meritorious defenses.