Norton v. Martinez

• Decision Date: 13 November 1996
• Docket Number: No. 04-96-00071-CV,04-96-00071-CV
• Citation: 935 S.W.2d 898
• Parties: Les NORTON, In His Official Capacity As Civil Service Director of The City of Laredo and The City of Laredo, Appellant, v. Orlando MARTINEZ, Appellee.
• Court: Texas Court of Appeals

Page 898

935 S.W.2d 898

Les NORTON, In His Official Capacity As Civil Service Director of The City of Laredo and The City of Laredo, Appellant, v. Orlando MARTINEZ, Appellee.

No. 04-96-00071-CV.

Court of Appeals of Texas San Antonio.

Nov. 13, 1996.

Fausto Sosa, City Attorney, Jerry Bruce Cain, Assistant City Attorney, Laredo, for appellant.

Ben M. Sifuentes, Jr., Combined Law Enforcement Associations of Texas, San Antonio, for appellee.

Before CHAPA, C.J., and STONE and GREEN, JJ.

OPINION

CHAPA, Chief Justice.

This is an appeal from a default judgment entered against appellants, the City of Laredo and Les Norton, in his official capacity as Civil Service Director of the City of Laredo. In six points of error, appellants contend that 1) the trial court abused its discretion in refusing to set aside the default judgment; and 2) the evidence is legally and factually insufficient to support the judgment. We reverse and remand.

Factual and Procedural Background

Appellee, Orlando Martinez, is employed as a police officer with the City of Laredo, Texas. On November 18, 1993, he took a promotional exam. Appellee contends that, based upon his score on the exam, he was ranked number one on the eligibility list for promotion to the position of sergeant before the list expired on November 18, 1994. However, appellee was not promoted to the position of sergeant in spite of the fact that there were two openings for the position during the period in which his score was valid. Appellee was offered no explanation for the police department's failure to promote him.

Appellee sued for declaratory, injunctive, and mandamus relief, seeking to compel appellants to promote him to the rank of sergeant or to provide an explanation for not doing so pursuant to the Texas Local Government Code and the Collective Bargaining Agreement between the City of Laredo and the Laredo Police Officers' Association. ¹ Appellants failed to timely answer appellee's petition. Consequently, the trial court entered a default judgment against appellants pursuant to TEX.R. CIV. P. 239.

Appellants filed a motion for new trial in which they 1) alleged that their failure to answer was not intentional, 2) set forth a meritorious defense to the claims against them, and 3) extended an offer to take the case immediately to trial and to reimburse appellee for expenses incurred in obtaining the default judgment. The motion was overruled by operation of law and this appeal ensues.

Arguments on Appeal

A. Sufficiency of the Evidence

In their sixth point of error, appellants contend that the evidence is both legally and factually insufficient to support the judgment against them. Specifically, appellants claim that the record does not support a finding that there was a vacancy in the rank of sergeant after appellee became the number one candidate on the eligibility list. As such, appellants argue that appellee is not entitled to be promoted or to be given a reason for not being promoted pursuant to section 143.036(f) of the Texas Local Government Code.

In cases of default judgment, the defendant's failure to answer represents an admission of all facts properly set forth in the plaintiff's petition. Welex v. Broom, 806 S.W.2d 855, 863 (Tex.App.--San Antonio 1991), vacated on other grounds, 816 S.W.2d 340 (Tex.1991); Transport Concepts, Inc. v. Reeves, 748 S.W.2d 302, 304 (Tex.App.--Dallas 1988, no writ). As a result, a default judgment conclusively establishes the defendant's liability. Morgan v. Compugraphic Corp., 675 S.W.2d 729, 731 (Tex.1984). In the present case, appellee's pleadings establish facts which, if true, support appellants' liability under section 143.036(f) of the Texas Local Government Code. Appellants may not now challenge the sufficiency of the evidence where their failure to answer constitutes an admission of such liability. See Holt Atherton Indus., Inc. v. Heine, 797 S.W.2d 250, 252 (Tex.App.--Corpus Christi 1990), rev'd on other grounds, 835 S.W.2d 80 (Tex.1992). Appellants' sixth point of error is overruled.

B. Motion for New Trial

In their first through fifth points of error, appellants contend that the trial court erred in denying their motion for new trial and refusing to set aside the default judgment. The granting or denial of a motion for new trial is within the trial court's sound discretion and will not be disturbed on appeal absent an abuse of that discretion. Strackbein v. Prewitt, 671 S.W.2d 37, 38 (Tex.1984). The standard for granting a motion for new trial and setting aside a default judgment was established in Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d 124 (1939). Bank One, Texas, N.A. v. Moody, 830 S.W.2d 81, 82-83 (Tex.1992)(reaffirming Craddock test).

Under Craddock, a default judgment should be set aside in any case in which the defendant demonstrates 1) that its failure to answer was not intentional or the result of conscious indifference; 2) that it has a meritorious defense; and 3) that the granting of a new trial will not operate to cause delay or other injury to the plaintiff. Craddock, 133 S.W.2d at 126. The historical trend in default judgment cases is toward the liberal granting of new trials. Miller v. Miller, 903 S.W.2d 45, 47 (Tex.App.--Tyler 1995, no writ). As such, where the elements of the Craddock test are satisfied, it is an abuse of discretion for the trial court to deny the defendant a new trial. Director, State Employees Workers' Comp. Div. v. Evans, 889 S.W.2d 266, 268 (Tex.1994).

1. Conscious Indifference

In order to satisfy the first prong of the Craddock test, the defaulting party must establish that its failure to answer was due to a mistake or accident rather than the result of conscious indifference. Craddock, 133 S.W.2d at 126. Conscious indifference has been interpreted to mean a failure to take some action which would seem obvious to a reasonable person in the same circumstance. Prince v. Prince, 912 S.W.2d 367, 370 (Tex.App.--Houston [14th Dist.] 1995, no writ)(quoting Johnson v. Edmonds, 712 S.W.2d 651, 653 (Tex.App.--Fort Worth 1986, no writ)). Courts have continually applied this prong of the Craddock test liberally, considering each case on an ad hoc basis. Gotcher v. Barnett, 757 S.W.2d 398, 401 (Tex.App.--Houston [14th Dist.] 1988, no writ); Harlen v. Pfeffer, 693 S.W.2d 543, 545 (Tex.App.--San Antonio 1985, no writ).

The absence of a purposeful or bad faith failure to answer is the controlling fact under this analysis. See Craddock, 133 S.W.2d at 125. Accordingly, the defaulting party must provide "some excuse, but not necessarily a good excuse" for failing to answer in a timely manner. Id.; see Gotcher, 757 S.W.2d at 401 (finding that "even a slight excuse will suffice"). If the factual assertions in the defendant's motion for new trial and accompanying affidavits are not controverted, the defendant satisfies its burden if it sets forth facts that, if true, negate intent or conscious indifference. Strackbein, 671 S.W.2d at 38-39. In determining whether the defendant's assertions are controverted, the court looks to all of the evidence in the record. Evans, 889 S.W.2d at 269.

In the present case, appellants have alleged facts in their motion for new trial which demonstrate that their failure to answer was neither intentional nor a result of conscious indifference. The affidavit of Jerry Bruce Cain, the assistant city attorney assigned to this case, reveals that, as a general practice, all suits filed against the City of Laredo are forwarded to the city attorney, who then forwards them to the city's insurance administrator for a determination as to coverage. If the claim is covered, the insurance administrator assigns the case to an independently retained attorney with no further communication to the city attorney. If the claim is not covered, the insurance administrator notifies the city attorney so that the proper action may be taken.

In this case, when the city received appellee's claim, it was forwarded to the insurance administrator according to procedure. However, when the insurance administrator denied coverage, the city attorney's office was not notified. Instead, the notice of denial of coverage was sent to Florencio Pena, the Director of Administrative Services for the City of Laredo. Pena stated in his affidavit that he was not aware that the matter was urgent, and therefore, did not notify the city attorney's office. Having received no notice from the insurance administrator regarding coverage of the claim, the city attorney's office was under the impression that the claim was covered, and was, therefore, unaware of the need to answer the suit. These facts do not indicate that appellants intentionally failed to answer the suit or were consciously indifferent to it. ²

Furthermore, we find nothing in the record to contradict appellants' assertions. The affidavits of both Cain and Pena are attached to appellants' motion for new trial. These affidavits establish that appellants' failure to answer was a direct result of a miscommunication between the City of Laredo and its insurance administrator. Appellee made no response to appellants' motion and there is nothing in the record to contradict the factual allegations contained in the affidavits.

In the absence of controverting evidence that appellants' failure to appear was due to an intentional act or conscious indifference, appellants' affidavits should be taken as true. Evans, 889 S.W.2d at 269; see Bank One, 830 S.W.2d at 84-85 (holding that where plaintiff did not controvert defendant's assertion of mistaken belief, conscious indifference was negated). As such, appellants have satisfied the first prong of the Craddock test by negating intentional or consciously indifferent conduct through the facts alleged in the affidavits of Cain and Pena.

2. Meritorious Defense

In order to satisfy the second prong of the Craddock test, the defaulting party must set up a meritorious defense by...