Progressive County Mutual Insurance Company v. Donald E. Schooley--Appeal from County Court at Law No 2 of McLennan County

IN THE

TENTH COURT OF APPEALS

No. 10-01-010-CV

PROGRESSIVE COUNTY

MUTUAL INSURANCE COMPANY,

Appellant

v.

DONALD E. SCHOOLEY,

Appellee

From the County Court at Law No. 2

McLennan County, Texas

Trial Court # 20000314CV2

O P I N I O N

Donald Schooley was involved in a vehicle accident with an insured of Progressive County Mutual Ins. Co. in McLennan County, Texas. Progressive filed a lawsuit against Schooley to recover property damages it paid on behalf of its insured. Schooley answered and filed a counter-claim for his own property damage as a result of the accident. Notices were sent setting a date for trial. Progressive failed to appear. The trial court granted a post-answer default judgment in favor of Schooley on his claims and dismissed Progressive s claims. Progressive timely filed a motion for new trial. The motion was denied. Progressive brought this appeal contending the trial court abused its discretion in denying its motion for new trial. We agree.

Motion for New Trial Default Judgment

In its only issue, Progressive claims the trial court erred in denying its motion for new trial because it met the three requirements for a new trial after a default as established by the Texas Supreme Court. See Craddock v. Sunshine Bus Lines, Ind., 133 S.W.2d 124 (Tex. 1939).

Applicable Law

A motion for new trial is addressed to the trial court s discretion, and the court s ruling will not be disturbed on appeal in the absence an abuse of discretion. Cliff v. Huggins, 724 S.W.2d 778 (Tex. 1987); Strackbein v. Prewit, 671 S.W.2d 37, 38 (Tex. 1984). The prerequisites for granting a motion to set aside a trial court s default judgment equally apply to a no-answer and a post-answer default judgment. Cliff, 724 S.W.2d at 779; Grissom v. Watson, 704 S.W.2d 325 (Tex. 1986). In Craddock, the Supreme Court set forth the guiding rule or principle which trial courts should follow in determining whether to grant a motion for new trial:

A default judgment should be set aside and a new trial ordered in any case in which 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; provided the motion for a new trial sets up a meritorious defense and is filed at a time when the granting thereof will occasion no delay or otherwise work an injury to the plaintiff.

Cliff, 724 S.W.2d at 779; Craddock, 133 S.W.2d at 126. A trial court abuses its discretion by not granting a new trial when all three elements of the Craddock test are met. Director, State Emp. Wkrs Comp. v. Evans, 889 S.W.2d 266, 268 (Tex. 1994).

Intentional Disregard or Conscious Indifference

In determining whether there was intentional disregard or conscious indifference, we look to the knowledge and acts of the movant. Strackbein, 671 S.W.2d at 39. We review all the evidence in the record. Director, 889 S.W.2d at 269.

Progressive alleged that it was in the process of receiving its files back from a firm which had previously handled its lawsuits because the firm was too busy. The notice of the trial setting was forwarded to Progressive, but it was not detected until after the trial date. Progressive claimed that its failure to appear was a mistake or accident. Schooley contends that because Progressive s counsel had not withdrawn from the case and Progressive had not secured new counsel, they acted with conscious indifference. We disagree. This situation is more akin to the situations where a trial setting was received but misplaced or not noted on the calendar. In those situations, the movant has not been held to have acted with intentional disregard or conscious indifference. See Director, 889 S.W.2d at 269; Strackbein, 671 S.W.2d at 39; Craddock, 133 S.W.2d at 125. Progressive has met the first Craddock element.

Meritorious Defense

The motion for new trial should be granted if it sets up a meritorious defense. Ivy v. Carrell, 407 S.W.2d 212, 214 (Tex. 1966). It is of no regard whether the alleged facts which set up the defense are controverted. Director, 889 S.W.2d at 270.

Progressive alleged that its insured was not the sole proximate cause of the accident. It claimed it would show that Schooley failed to yield the right-of-way and exercised faulty evasive action. Progressive also claimed it would show that its insured negotiated a lane change in time to stop before entering Schooley s lane. Schooley contends his favorable eyewitness is more credible than the police report relied on by Progressive. That is of no consequence in setting up a meritorious defense for the Craddock test. Progressive set up a meritorious defense and, therefore, met the second element of Craddock.

Injury or Delay

The courts have also looked more favorably on movants who are ready, willing, and able to go to trial almost immediately. Id. Once the movant alleges that the granting of a new trial would not injure the non-movant, the burden of going forward with proof of injury shifts to the non-movant. Director, 889 S.W.2d at 270.

Progressive alleged the granting of a new trial would not injure or delay Schooley. It offered to reimburse Schooley for all reasonable expenses incurred in obtaining the default judgment. Progressive also claimed that it was ready to proceed with the trial. Schooley claimed he would suffer financial hardship if the new trial was granted because he was a truck-driver and lived out of state. He also claimed that his eyewitness might not appear for a new trial. The witness lived beyond the subpoena power of the court. Financial hardship and only the possibility of a witness not appearing are not the sorts of injuries needed to rebut the movant s showing of non-injury and no delay. // See Director, 889 S.W.2d at 270. Progressive met the third element of Craddock.

Conclusion

Because Progressive met the three elements of Craddock requiring a new trial in a default judgment case, the trial court abused its discretion in denying Progressive s motion for new trial. Thus, the judgment is reversed and the cause is remanded for proceedings consistent with this opinion.

TOM GRAY

Justice

Before Chief Justice Davis,

Justice Vance, and

Justice Gray

Reversed and remanded

Opinion delivered and filed December 5, 2001

Do not publish

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