Pierson v. McClanahan

• Decision Date: 10 December 1975
• Docket Number: No. 12332,12332
• Parties: R. E. PIERSON et al., Petitioners, v. Sterling McCLANAHAN et al., Respondents.
• Court: Texas Court of Appeals

Page 672

531 S.W.2d 672

R. E. PIERSON et al., Petitioners, v. Sterling McCLANAHAN et al., Respondents.

No. 12332.

Court of Civil Appeals of Texas,

Austin.

Dec. 10, 1975.

Rehearing Denied Jan. 7, 1976.

Warren C. Lyon, Dallas, for petitioners.

Hank Price, II, pro se.

George Wm. Perry, Dallas, for respondents.

SHANNON, Justice.

The jurisdiction of this Court is invoked by the filing of three petitions for writs of error with the district clerk of Bell County to review a judgment entered by the district court of Bell County. Petitioners are R. E. Pierson, Instant Credit Service, Inc., and Hank Price. Respondents are Sterling and Jerrine McClanahan, doing business as the House of Sterling; Don Von, doing business as Von Music; Doris Langford, doing business as Tex's True Value Hardware Center; T. M. Golliheari, doing business as Tom's Auto Supply; and Doyle Whitehead and Ron Ambrose, doing business as Ragsdale Service Company.

Respondents filed suit in the district court of Bell County to recover actual and exemplary damages from petitioners Pierson and Instant Credit Service, Inc. Respondents' claim arose from the alleged fraud in the inducement of contracts executed between respondents and Instant Credit Service, Inc. Petitioners filed pleas of privilege to be sued in Dallas County and Collin County. The district court overruled the pleas of privilege, and that order was affirmed by this Court in July of 1973. Instant Credit Service, Inc. v. McClanahan, 497 S.W.2d 954 (Tex.Civ.App.1973, writ dism'd).

The events culminating in the entry of the judgment are as follows. The transcript shows that on September 23, 1974, the district court notified counsel for all parties that the case was set for a jury trial for November 11, 1974, at 9:00 A.M. On October 29, 1974, attorney Clifton Holmes wrote petitioner Price that he was '. . . withdrawing from your employ as counsel in this matter (McClanahan v. Pierson), recognizing your inability to pay attorney's fees and, at the same time, retain sufficient capital to meet the obligations you have assumed from ICS. I have enjoyed my association with you in the past and wish you best (sic) in your Pro se efforts in the future.'

On November 2, 1974, Lloyd W. Westerlage, a member of the Dallas County bar, wrote petitioner Price, 'This is to confirm the fact that neither you, Mr. Robert E. Pierson or Instant Credit Service, Incorporated desires that I continue to represent any of you in the above referenced matter. Therefore, this is to notify you that I withdraw therefrom subject to the pleasure of the court.'

Thereafter, petitioner Price undertook the defense of his interests. On November 5, 1974, he filed with the district clerk a number of pleadings in a Pro se capacity.

A pre-trial conference was held on Friday, November 8, 1974. Counsel for respondents and Price and Pierson were in attendance at that conference.

In his affidavit petitioner Price swore that on Saturday, November 9, he obtained counsel to represent Instant Credit Service, Inc., in the trial on the following Monday. He also swore that it was necessary to secure the written approval of the president of the corporation before counsel was authorized to act. Price claimed that on Saturday he called counsel for respondents by telephone to inform him that it would be about noon Monday, November 11, before he and counsel could arrive in Belton from Dallas. Price also swore that counsel for respondents agreed to inform the district court of the telephone call.

The district court called the case at 10:35 A.M. on Monday, November 11, 1974. Petitioners did not appear in person or by counsel. Respondents waived trial by jury and then proceeded to trial before the court. Respondents called five witnesses and placed in the record evidence of liability and damages. See Frymire Engineering Company, Inc. v. Grantham, 524 S.W.2d 680 (Tex.1975). At the conclusion of the evidence the court rendered judgment for respondents. The court signed the judgment, labeled 'default judgment,' on November 14, 1974.

Seventeen days later, December 2, 1974, Instant Credit Service, Inc., filed its 'Motion to Set Aside Default Judgment.' On the same date Price and Pierson filed a separate 'Motion to Set Aside Default Judgment.' After hearing wherein respondents called no witnesses, the district court overruled those motions.

Petitioners' point of error one is that the district court '. . . abused its discretion in overruling Defendants' Motion to Set Aside Default Judgment.' We will overrule the point.

The rules which govern the consideration of a motion for new trial to set aside a default judgment are well defined. 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) provided the motion for new trial sets up a meritorious defense and is filed at a time when the granting thereof will occasion on delay or otherwise work an injury to the plaintiff. Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d 124 (1939).

The rule in Craddock v. Sunshine Bus Lines, Inc., supra, was restated and explained by the Supreme Court in Ivy v. Carrell, 407 S.W.2d 212 (Tex.1966). Concerning the requirement that the defaulting defendant must set up a 'meritorious defense,' Chief Justice Calvert carefully explained that the rule in Craddock v. Sunshine Bus Lines, Inc., supra, does not mean '. . . that the motion (for new trial) should be granted if it merely Alleges that the defendant 'has a meritorious defense.' The motion must allege Facts which in law would constitute a defense to the cause of action asserted by the plaintiff, and must be supported by affidavits or other evidence proving Prima facie that the defendant has such meritorious defense.' Ivy v. Carrell, supra, at page 214. (Emphasis by the Supreme Court).

Because we have concluded that petitioners' motions to set aside the default judgment do not 'set up a meritorious defense,' it is not necessary to consider whether or not petitioners' failure to appear and defend their interests was not intentional or the result of conscious indifference, but instead was due to a mistake or accident.

The most casual examination of the transcript shows that petitioners' motions to set aside the default judgment do not meet the test of Ivy v. Carrell, supra, in that those motions did not allege facts which would constitute a defense to respondents' cause of action and those motions were not supported by affidavits or other evidence proving Prima facie that petitioners had a meritorious defense. In paragraph six of its 'Motion to Set Aside Default Judgment,' petitioner Instant Credit Service, Inc., stated that it had '. . . a good and meritorious defense to the cause of action alleged in Plaintiffs' First Amended Original Petition in that neither ICS (Instant Credit Service, Inc.) or its agents induced the Plaintiffs to sign the written contracts by fraud or misrepresentation.' Ivy v. Carrell, supra, requires that the allegation in the motion '. . . must be supported by affidavits or other evidence proving Prima facie that the defendant has such meritorious defense.' Petitioner Instant Credit Service, Inc., did not support its motion in any manner, much less by an affidavit or other evidence proving Prima facie that it had a meritorious defense.

In paragraph two of their 'Motion to Set Aside Default Judgment' petitioners Price and Pierson alleged that they had '. . . a meritorious defense to the Plaintiffs' First Amended Original Petition as shown by their First Amended Original Answer which was offered to and allowed by the Clerk of this Court to be filed after the default judgment had been granted.' The rule of Ivy v. Carrell, supra, is that the motion for new trial should not be granted '. . . if it merely Alleges that the defendant 'has a meritorious defense.' The motion must allege Facts which in law would constitute a defense to the cause of action asserted by the plaintiff . . .' (Emphasis by the Supreme Court) By no stretch of the imagination can it be said that paragraph two of Price's and Pierson's motion alleges Facts. Furthermore, there is nothing to that part of paragraph two of Price's and Pierson's motion alleging a meritorious defense 'as shown by their First Amended Original Answer.' An examination of the transcript does not reveal that such a pleading was even filed.

Unlike petitioner Instant Credit Service, Inc., petitioners Price and Pierson did file affidavits in an effort to support paragraph two of their motion to set aside the default judgment. Most of the statements contained in those affidavits concern petitioners' efforts to demonstrate that their failure to appear for trial was due to a mistake or accident. One affidavit, that of Dan L. Hilliard, a polygraph examiner, does represent an attempt to prove Prima facie that Price and Pierson had a meritorious defense. In the affidavit Hilliard swore that he examined Pierson with respect to statements that he had made to those persons he had contracted with over a two-year period, and Hilliard was of the opinion that Pierson did not '. . . deliberately lie, nor did he give false information, to those who contracted for the ICS credit service.'

The affidavit of the polygraph examiner does not prove Prima facie that Price and Pierson had a meritorious defense to petitioners' cause of action. Moreover, results of a polygraph examination are not admissible in civil suits. Central Mutual Insurance...