Guardsman Life Ins. Co. v. Andrade, 01-86-00888-CV

• Decision Date: 24 December 1987
• Docket Number: No. 01-86-00888-CV,01-86-00888-CV
• Citation: 745 S.W.2d 404
• Parties: GUARDSMAN LIFE INSURANCE COMPANY, Appellant, v. Candace Ann ANDRADE and Randall Charles Dominy, Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 404

745 S.W.2d 404

GUARDSMAN LIFE INSURANCE COMPANY, Appellant, v. Candace Ann ANDRADE and Randall Charles Dominy, Appellees.

No. 01-86-00888-CV.

Court of Appeals of Texas Houston (1st Dist.).

Dec. 24, 1987.

Stephen E. Ulrich, Ulrich & Ulrich, Houston, John Wm. Black, Wiech & Black, Brownsville, for appellant.

Herbert W. Fortson, III, Houston, for appellees.

Before JACK SMITH, LEVY and HOYT, JJ.

OPINION

HOYT, Justice.

This is an appeal from a default judgment entered against the appellant, Guardsman Life Insurance Company, in favor of the appellees, Candace Ann Andrade and Randall Charles Dominy.

The record indicates that on April 11, 1983, Percy P. Dominy ("the insured") purchased two $100,000 life insurance policies from Guardsman Life Insurance Company. The insured named his wife, Helen Dominy, as primary beneficiary on one policy, and Ada M. Harrell as primary beneficiary on the other policy. Thereafter, the insured changed the primary beneficiaries on both policies to his children, Candace Ann Andrade and Randall Charles Dominy.

On both applications for life insurance, the insured denied that he had used alcoholic beverages to excess and that he had ever had any disorder of the liver. On May 13, 1984, the insured died. His "Certificate of Death" indicated that the immediate cause of his death was cardiorespiratory arrest and that one significant condition contributing to his death was cirrhosis of the liver. Mr. Dominy's medical records indicated that he had been diagnosed in 1981 with cirrhosis of the liver. Medical records of 1983 indicated continued liver problems and a history of alcohol abuse. On May 19, 1977, prior to his purchase of the insurance policies in question, the following hospital report was prepared on the insured HISTORY OF PRESENT ILLNESS: The patient is a forty-seven year old white male who was admitted after an automobile accident on the night of admission.... During the initial evaluation in the emergency room [,] it was immediately apparent that the patient had been drinking with a marked alcohol odor. He was mildly stuporous but able to answer most questions adequately....

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The patient admits to drinking. Quantities were grossly exaggerated, however, it is assumed that the patient has been drinking very heavily for a long period of time. He denies significant alcoholic complications such as marked edema in his abdomen or his legs....

After the demise of the insured, the appellees filed a claim with the appellant, who rejected it on the basis that the insured had failed to disclose his medical condition on his application. Thereafter, the appellees commenced this law suit.

Prior to the appellees instituting this cause of action, Ada Harrell, a previous primary beneficiary on one of the policies, sued the appellant in Cameron County. The appellant timely filed an answer. Service on the appellant, in this cause, was had by serving the Commissioner of Insurance. The appellant failed to answer, and the appellees moved for and obtained a default judgment in the amount of $200,000 on the policies, statutory penalty, prejudgment interest, attorney's fee, post-judgment interest, and court costs.

Twenty days after the judgment was entered in the instant case, the appellant filed a motion for new trial and attached an affidavit admitting that the appellant was served with process, but claiming that counsel for the appellant had mistakenly assumed that the papers pertained to the suit already pending in Cameron County.

During the hearing on the motion for new trial, the appellant admitted being negligent, but stated that the negligence .. was a result of mistake and accident and not due to conscious indifference. It also claimed that it had a meritorious defense based on the insured's alleged misrepresentation on his applications. Finally, the appellant asserted its willingness to compensate the appellees for the time spent in securing the entry of default judgment.

In its sole point of error, the appellant contends that the trial court erred in denying its motion for new trial in that "there was evidence that the default was not intentional or the result of conscious indifference, ... [and that it] had a meritorious defense to [a]ppellees' claims."

The guidelines for review of a motion for new trial are stated in Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 393 133 S.W.2d 124, 126 (1939). Craddock instructs that:

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 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.

This rule was restated recently in Angelo v. Champion Restaurant Equipment Co., 713 S.W.2d 96, 98 (Tex.1986).

We conclude from the record that there is no evidence that the appellant...