Angelo v. Champion Restaurant Equipment Co. , 1985 Tex. App. LEXIS 7352 ( 1985 )

DUGGAN, Justice,

dissenting.

On original submission, this court found that appellant had met the first two requirements of Craddock v. Sunshine Bus Lines, 134 Tex. 388, 393, 133 S.W.2d 124, 126 (1939), in that the appellant’s failure to answer was not due to conscious indifference, but was due to a mistake or an accident, and further, that appellant had set up a meritorious defense. However, we refused to order a new trial because the appellant had not met Craddock’s third requirement, i.e., that the motion for new trial be filed at a time then the granting thereof will occasion no delay or otherwise work an injury to the plaintiff. The appellant could have met this requirement in his motion for new trial by offering to pay the appellee’s reasonable expenses of obtaining the default judgment and by stating that the appellant was ready, willing, and able to go immediately to trial. Stone Resources, Inc. v. Barnett, 661 S.W.2d 148, 152 (Tex.App.—Houston [1st Dist.] 1983, no writ). The appellant failed to do this.

An offer to pay the appellee’s costs, made in the appellant’s brief to the court of appeals, has been held sufficient to meet the requirement of offering to pay the ap-pellee’s expenses. Dallas Heading Co. v. Pardee, 561 S.W.2d 16 (Tex.Civ.App.—Dallas 1977, writ ref. n.r.e.). The appellant did not make such an offer in his brief, but did do so in oral argument to this court. Without deciding whether such an offer should be held sufficient as a general rule, I believe it should be under the circumstances of this case.

Appellant says that his failure to file an answer before judgment was due to his mistake in believing that his payments to appellee’s attorney had taken care of the matter. Appellant presented prima facie proof that he paid the amount owed, $34,-390.87, less a final invoice for $212 and added service charges. Appellee correctly states that appellant has not presented proof of an agreement with appellee’s attorney. However, appellant’s notification to appellee’s attorney of his intent to pay, his subsequent payments, and the acceptance of the subsequent payments by appel-lee's attorney justified appellant in believing that the suit had been dismissed, or would not be pursued, or at least that any judgment taken would be for only the final invoice of $212 plus service charges. Appellant has therefore shown a meritorious defense and has shown that his failure to answer was due to accident or mistake, rather than to conscious indifference.

Something more has been shown, however. Appellee’s attorney informed the trial court at the hearing on the motion for new trial that appellee’s affiant and appel-lee’s original attorney had both died since the suit was filed. The record showed a lapse of about three and three quarters years after service of citation before the appellee sought a default judgment. The delay itself may not be a sufficient basis for this court to find abandonment of ap-pellee’s claim as a matter of law; however, the delay coupled with the death of those with knowledge on the appellee’s side plus prima facie proof of payment permits an inference that the judgment was obtained by mistake or accident of the appellee. This is something more than the necessary showing of mistake or accident on the part of the appellant. Appellant’s appearance day passed before appellant made the third payment on the debt. Nevertheless, appel-lee’s affiant and original attorney took no action to obtain a default judgment either before or after appellant made the third payment. Appellant’s original attorney died three and one-half months before the default judgment was taken. It is significant to me that appellee’s original affiant and original attorney did not see fit to pursue a default judgment for three and a half years, but that, as soon as they were both dead, the default judgment was taken by others who had no knowledge of the negotiations or circumstances surrounding the filing of the original suit.

I do not infer that appellee’s present president or its present attorney have taken any action in bad faith. I do believe that the circumstances of this case justify the disregard of appellant’s failure to formally offer, in his motion for new trial, to pay appellee’s expenses of obtaining the default judgment.

In addition, the Texas Supreme Court has said it may not be fair to require the movant to pay all of the non-movant’s expenses in every case. One factor that must be considered is the extent to which a defendant’s failure to answer is caused by his own negligence. United Beef Producers, Inc. v. Lookingbill, 532 S.W.2d 958, 959 (Tex.1976). The prima facie proof in appellant’s affidavit permits an inference that appellant’s only negligence lay in trusting appellee’s attorney to see that the suit was dismissed or not pursued, rather than making a formal answer.

The circumstances of this case also justify disregarding appellant’s failure to formally state his readiness for trial. Appel-lee’s own delay presents an equitable consideration in favor of appellant. Appellee’s attorney argued at the hearing and again in his brief that appellant’s delay resulted in prejudice to appellee because of the loss of appellee’s affiant and first attorney while the suit was pending. The relevant delay period is the period between the time of granting the default judgment and the time when a new trial could take place. Appellant is, of course, not responsible for appellee’s delay in seeking default judgment. There is no suggestion that appellant’s defense would require any length of time to prepare. On the contrary, it appears that appellee may need time to search its deceased attorney’s records to show that the attorney did not in fact receive the payments, if such is the case. A delay of a few days or even a few weeks is inconsequential compared to the delay of three and three quarters years. Further, a grant of a new trial could properly be conditioned on appellant’s being ready for trial upon appellee’s demand, as well as upon appellant’s payment of an appropriate amount for appellee’s expenses in obtaining the default judgment.

An exception to the mechanical application of Craddock’s requirements should be made when the record discloses, as it does in this case, such a strong likelihood that the default judgment was obtained by accident or mistake on the part of the appellee. I would hold that the trial court abused its discretion in refusing to grant the new trial. Accordingly, I would grant the motion for rehearing, reverse the trial court’s refusal to grant a new trial after default judgment, and remand for a trial on the merits.