General Portland, Inc. v. Collins , 1977 Tex. App. LEXIS 2797 ( 1977 )

OPINION

HUGHES, Justice.

This is an appeal from a default judgment in favor of Mary Collins and husband, Richard Collins (Mary and Richard), in the amount of $75,000.00 against General Portland, Inc. (Portland) and Walter Owen Hedges (Hedges) arising out of a truck-automobile accident on December 6, 1973. The judgment was signed April 12, 1976, following a hearing on April 9, 1976. Mary and Richard filed their original petition in this suit on October 28, 1975.

Portland and Hedges filed original answers in the suit on April-14, 1976. They filed an amended answer and a motion for new trial on April 15, 1976. On May 4, 1976, they filed an amended motion for new trial. Trial court heard the amended motion on May 28, 1976, and on June 4, 1976, overruled such motion. Appeal was perfected.

We reverse and remand.

Portland and Hedges appeal on the legal grounds that the proof was not sufficient in the default hearing to support even a default judgment.

They also appeal in equity saying that they proved adequate grounds to excuse their failure to file an answer in time and that the trial court abused its discretion in not setting aside the default judgment.

We will not go into the facts or the law involved in the first 14 points of error filed covering above mentioned legal grounds. We conclude that they are without merit and they are overruled.

We find the equitable grounds urged in points of error Nos. 15 and 16 to be sufficient for reversal of the judgment entered by the trial court.

The facts leading up to and resulting in the default judgment rendered by the trial court reflect an obvious attempt by all parties to resolve their differences without a suit being filed. Attorneys for Collins conferred with Benny George, the adjuster, for nearly two years without serious effort to settle being made by either set of parties. Suit was finally filed to avoid the statute of limitations, a fact which was frankly admitted by attorney for the Collinses, with an invitation to George to continue consideration of settlement.

Just a few days before this suit was finally filed, the Collinses filed suit for an accident which occurred in 1975 (two years later than the accident involved here). The Collinses settled the matters involved in the latter accident.

The Collinses did not commence giving medical information to Portland and Hedges until late 1975, although the record reflects that numerous requests were made for such by George.

Neither-Portland nor Hedges filed an answer, nor did they turn the file over to their attorney until after the default judgment was rendered. Parties had a mutual agreement that no answer need be filed pending negotiations. (Peebles, by letter of November 7, 1975, told George that he would give 20 days notice for filing answer.) George requested this arrangement to save money by not filing an answer. Various doctors’ reports were delivered by Peebles. An exchange of several letters between Peebles and George (indicating that Peebles wanted an offer and George wanted more medical) culminated in Peebles’ letter of March 2, 1976, giving 20 days notice to George to file an answer. On March 25, 1976, time was extended for two weeks, and on March 31, 1976, Peebles sent more doctors’ reports. April 9, 1976, testimony was taken and default judgment rendered. Same date, George mailed the citations and copies of petitions in this cause to Portland’s and Hedges’ attorneys. Their Original Answer was filed on April 14, 1976.

Portland and Hedges claim that the failure to answer was on account of a mistake: George’s assumption that there would be no immediate default taken before Portland’s and Hedges’ attorney could file an answer. In the light of the protracted negotiations and attempts to arrive at a settlement between the parties we find no conscious indifference on his part and certainly not on the part of the parties he represented; nor do we find he intended that a default be taken. We also find that a meritorious defense was alleged in the Motion For New Trial and the affidavit of Hedges attached thereto. In the welter of conclusions there were woven enough fact statements to “set up” a meritorious defense to the Original Petition. The Motion For New Trial was filed three days after the Judgment was entered, at a time when the granting thereof would occasion no delay or otherwise work an injury to the plaintiffs. Craddock v. Sunshine Bus Lines, 134 Tex. 388, 133 S.W.2d 124 (1939); City of San Antonio v. Garcia, 243 S.W.2d 252 (Tex.Civ.App.—San Antonio 1951, error ref’d); Ward v. Nava, 488 S.W.2d 736 (Tex.1972); Hanks v. Rosser, 378 S.W.2d 31 (Tex.1964); Ivy v. Carrell, 407 S.W.2d 212 (Tex.1966).

As late as March 31, 1976, Peebles wrote George: “Please try to make an objective evaluation of this case in the very near future, so we can either settle the case or prepare it for trial ” (emphasis ours). This might well indicate lack of intention to take default, supporting George’s interpretation of the agreement.

In their motion, Portland and Hedges offered to reimburse plaintiffs for all their expenses incurred in taking the default judgment.

For the reasons stated, we reverse the judgment of the Trial Court and remand for a trial on the merits.

MASSEY, C. J., dissenting.