Continental Cas. Co. v. Davilla

• Citation: 139 S.W.3d 374
• Decision Date: 20 May 2004
• Docket Number: No. 2-03-270-CV.,2-03-270-CV.
• Parties: CONTINENTAL CASUALTY COMPANY, Appellant, v. Salvidor DAVILLA, Appellee.
• Court: Court of Appeals of Texas

139 S.W.3d 374

CONTINENTAL CASUALTY COMPANY, Appellant, v. Salvidor DAVILLA, Appellee.

No. 2-03-270-CV.

Court of Appeals of Texas, Fort Worth.

May 20, 2004.

Rehearing Overruled June 24, 2004.

Appeal from the 43rd District Court, Parker County, Don Chrestman, J Burns, Anderson, Jury, & Brenner, L.L.P. and David Brenner, Austin, for Appellant.

Norman Darwin, Fort Worth, for Appellant.

PANEL B: HOLMAN, GARDNER, and WALKER, JJ.

OPINION

DIXON W. HOLMAN, Justice.

This is an appeal from a workers' compensation case in which Appellee Salvidor Davilla filed suit for judicial review of a Texas Workers' Compensation Commission (TWCC) Appeals Panel's decision that his compensable injury does not extend to include his left knee.

FACTUAL AND PROCEDURAL BACKGROUND

Appellee served CT Corp System — the registered agent for service of process for Appellant Continental Casualty Company — on November 19, 2002. Appellant failed to file an answer and Appellee moved for a default judgment, which was granted on May 5, 2003. Appellant contends that it received notice of the default judgment from Appellee's attorney on June 26, 2003 — more than 20 days but less than 90 days from the date the default judgment was entered. See TEX.R. CIV. P. 306a(4).

Appellant filed a motion for new trial accompanied with affidavits from three of its employees on July 28, 2003. Grace Evola-Bourlon, a claims manager supervisor for CNA Group of Insurance Companies ("CNA"),¹ stated by sworn affidavit that Appellant was served with Appellee's claim on November 19, 2002. Evola-Bourlon admitted that Appellant failed to answer the suit and provided an explanation for Appellant's failure to appear at trial. According to Evola-Bourlan, the claims management department assigned this claim to an attorney in Dallas according to the company's ordinary procedures. Due to an accidental oversight, however, the suit papers were not forwarded to the attorney. Evola-Bourlan stated that she was not aware of this mistake until Appellant received the copy of the default judgment from Appellee's attorney. Debra Line, a claims specialist for CNA, provided an affidavit stating that Appellant first received actual or written notice of the default judgment on June 26, 2003, when she received a letter and copy of the default judgment from Appellee's attorney. Finally, Albert Diombala, also a claims manager for CNA, testified by affidavit that it was his opinion that Appellant had a meritorious defense to Appellee's claim.

At the hearing on the motion for new trial, held on August 29, 2003, the district clerk of Parker County, Elvera Johnson, testified that it is the regular practice of the court for the records management deputy to send copies of a default judgment to the losing party and then mark the file jacket with the date that the judgment was signed and the date the copy of the judgment was mailed to the defendant. Johnson also testified that the jacket for Appellee's case had a notation on it stating, "judgment signed 5/05/03, copies returned on 5/5/03." When asked what "copies returned" means, she replied, "[j]udging by the handwriting, it means that the copy was sent to — on judgment — the notice was sent that a judgment was taken. Should be. I honestly can't tell you because I haven't looked through the whole thing." Johnson testified that the court usually saves a copy of the notice sent, but was unable to locate such a copy within Appellee's file.

Pamela Dickey, a records management clerk for Parker County, also testified. Dickey stated that it was her handwriting on the file jacket. She explained that "copies returned" means that she made a copy of the judgment and put it in the mail to the defendant or the defendant's attorney. Dickey testified that she was not trained to put a copy of the letter in the file and that she does not normally do so. When Appellee's attorney asked Dickey if she could testify that she mailed a copy of the default judgment to Appellant on May 5, 2003, she replied, "[y]es, sir."

Although Appellant asserted that it did not receive notice until June 26, 2003, the trial court denied Appellant's motion, noting that there was no evidence that Appellant's registered agent for service of process, CT Corp System, also did not receive timely notice of the default judgment. In response, Appellant filed a motion for rehearing and attached the affidavit of Shirley Dillon, a senior process specialist for CT Corp System. Dillon's affidavit states, in pertinent part:

I have checked the records of CT Corp System to determine whether a default judgment bearing cause no. 50414 and with Continental Casualty Company as the Defendant was received by CT Corp System. Such records would be cross referenced by cause number and the name of Continental Casualty Company. Our records reflect that no such default judgment was received by CT Corp System between May 5, 2003 and June 26, 2003.

The court denied Appellant's motion for rehearing and this appeal ensued. Pursuant to an order from this court, the trial court filed one finding of fact regarding the date when Appellant or Appellant's attorney first either received notice or acquired actual knowledge that the May 5, 2003 judgment was signed, which stated:

[Texas Rule of Civil Procedure] 21a creates a presumption that mail placed in the care and custody of the United States Postal Service shall be deemed to have been received within [three] days from the date of such deposit. Therefore, it is the finding of the Court that [t]he Defendant is deemed to have received notice of the default judgment on May 8, 2003.

STANDARD OF REVIEW

We review a trial court's decision to grant or deny a motion for new trial under an abuse of discretion standard. Dir., State Employees Workers' Comp. Div. v. Evans, 889 S.W.2d 266, 268 (Tex.1994); Wal-Mart Stores, Inc. v. Kelley, 103 S.W.3d 642, 643-44 (Tex.App.-Fort Worth 2003, no pet.). To determine whether a trial court abused its discretion, we must decide whether the trial court acted without reference to any guiding rules or principles; in other words, whether the act was arbitrary or unreasonable. See Carpenter v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682, 687 (Tex.2002); Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985), cert. denied, 476 U.S. 1159, 106 S.Ct. 2279, 90 L.Ed.2d 721 (1986). Merely because a trial court may decide a matter within its discretion in a different manner than an appellate court would in a similar circumstance does not demonstrate that an abuse of discretion has occurred. Downer, 701 S.W.2d at 241-42.

An abuse of discretion does not occur when the trial court bases its decisions on conflicting evidence. Davis v. Huey, 571 S.W.2d 859, 862 (Tex.1978); see also Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex.1997). Furthermore, an abuse of discretion does not occur as long as some evidence of substantive and probative character exists to support the trial court's decision. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 211 (Tex.2002); Holley v. Holley, 864 S.W.2d 703, 706 (Tex.App.-Houston [1st Dist.] 1993, writ denied).

Before a default judgment can be set aside and a new trial granted, the defendant must satisfy all elements of the Craddock test. Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d 124, 126 (1939). The Craddock test is well-established: a default judgment should be set aside and a new trial ordered in any case in which (1) 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; (2) the motion for a new trial sets up a meritorious defense; and (3) the motion is filed at a time when the granting thereof will occasion no delay or otherwise work an injury to the plaintiff. Id.

JURISDICTION

Appellant asserts, in its second issue, that this court is required to exercise jurisdiction over this appeal because Appellant conclusively established through uncontroverted evidence that it timely filed its motion for new trial. Appellant argues in its fourth issue that if this court nevertheless finds that Appellant did not timely file its motion for new trial, we should consider this a restricted appeal. Because Appellant's jurisdictional issues are potentially dispositive of this appeal, we address them first.

A motion for new trial must be filed prior to or within 30 days after the judgment or other order complained of is signed. TEX.R. CIV. P. 329b(a). An exception to this rule exists when a party adversely affected by a judgment or other appealable order did not receive notice nor acquire actual knowledge of the order within the time frame set forth in Rule 329b. See TEX.R. CIV. P. 306a(4), 329b. Rule 306a(5) prescribes the procedure for claiming this exception:

In order to establish the application of paragraph (4) of this rule, the party adversely affected is required to prove in the trial court, on sworn motion and notice, the date on which the party or his attorney first either received a notice of the judgment or acquired actual knowledge of the signing and that this date was more than twenty days after the judgment was signed.

TEX.R. CIV. P. 306a(5).

The requirements of Rule 306a(5) are jurisdictional. Mem'l Hosp. v. Gillis, 741 S.W.2d 364, 365 (Tex.1987); Moore Landrey, L.L.P. v. Hirsch & Westheimer, P.C., 126 S.W.3d 536, 540 (Tex.App.-Houston [1st Dist.] 2003, no pet.). The purpose of the Rule 306a(5) motion is to establish a prima facie showing of lack of notice, thereby reinvoking the trial court's jurisdiction for the limited purpose of holding a Rule 306a hearing. In re Ray, 967 S.W.2d 951, 953 (Tex.App.-Dallas 1998, orig. proceeding).

The party adversely affected by the ruling of the trial court must prove in the trial court, on sworn motion and notice, the date he or his attorney first received notice or acquired actual knowledge of the signing. TEX.R. CIV. P. 306a(5); ...