Opinion issued April 9, 2015




                                    In The

                             Court of Appeals
                                    For The

                         First District of Texas
                           ————————————
                             NO. 01-14-00423-CV
                          ———————————
   SOUTHWEST WARREN, INC. AND THOMAS EUGENE MCCAIN,
                       Appellants
                                       V.
                     THERESA CRAWFORD, Appellee


                   On Appeal from the 149th District Court
                          Brazoria County, Texas
                        Trial Court Case No. 72986


                                 OPINION

      Appellee, Theresa Crawford, obtained a default judgment against appellants,

Southwest Warren, Inc. and Thomas Eugene McCain, for injuries sustained from

an automobile accident between Crawford and McCain. Forty-nine days after the

judgment was entered, Southwest Warren and McCain filed a motion to extend the
post-judgment deadlines and a motion for new trial. The trial court granted the

motions and then, after a motion to reconsider both motions, entered an order

denying both motions. The trial court denied Southwest Warren and McCain’s

subsequent motion to reconsider. In four issues on appeal, Southwest Warren and

McCain challenge the trial court’s ultimate denial of their motions to extend the

post-judgment deadlines and for new trial and challenge the sufficiency of the

evidence supporting the default judgment.

      We reverse and remand for a new trial.

                                  Background

      Crawford and McCain were involved in a car wreck. The wreck occurred

while McCain was performing work as an employee of Southwest Warren. Some

time later, Crawford sued Southwest Warren and McCain for injuries sustained in

the car wreck. While both were served, neither Southwest Warren nor McCain

filed an answer in the suit. On October 14, 2013, Crawford obtained a default

judgment against Southwest Warren and McCain. The clerk of the court sent

notice of the default judgment to Southwest Warren and McCain at the addresses at

which they had previously been served.

      On November 19, 2013, Crawford’s attorney sent a letter to Southwest

Warren’s insurance carrier, notifying the carrier of the default judgment. The

insurance carrier notified Southwest Warren and McCain. On December 2, 2013



                                         2
(49 days after the judgment had been signed), Southwest Warren and McCain filed

a motion to extend the post-judgment deadlines and a motion for new trial.

Following a hearing, the trial court granted both motions.

      Afterwards, Crawford filed a motion to reconsider both of Southwest

Warren and McCain’s motions. She also filed a request for findings of fact and

conclusions of law. The trial court requested proposed findings from all parties.

Southwest Warren and McCain did not respond to Crawford’s motion or to the trial

court’s request for proposed findings. Following a hearing on Crawford’s motion,

the trial court granted the motion to reconsider the motion to extend the post-

judgment deadlines and the motion for new trial. In the order, the trial court

“rescind[ed]” its grant of both motions.

      Southwest Warren and McCain then filed a “post-answer” motion for new

trial. The motion contained a revised affidavit from Southwest Warren’s owner,

Richard Matise, and an affidavit from McCain. In the motion, Southwest Warren

and McCain claimed that their failure to answer was due to Matise’s mistaken

belief that Matise had forwarded the information of the lawsuit to Southwest

Warren’s insurance agent. They also claimed to have a meritorious defense in that

they alleged that, at the time of the accident, McCain’s car was parked on the side

of the road and outside the lane of moving traffic. Finally, they asserted they were




                                           3
willing to reimburse Crawford for her reasonable attorneys’ fees, and that they

were “ready to proceed forward with the prosecution of this case.”

      McCain asserted in his affidavit that, at the time of the accident, “I was

parked on the shoulder of the road and completely out of the moving lane of traffic

when plaintiff collided with the vehicle I was driving.” He further asserted that,

when he received notice of the lawsuit, he turned the documents over to Matise.

Matise told McCain that Southwest Warren would handle having the answer filed

for him and for the company. Matise further stated that he would contact the

insurance agent so that the agent could handle the matter. When he did not hear

anything more about the lawsuit, McCain presumed the matter had been properly

resolved. He did not know otherwise until Crawford’s attorney sent a copy of the

judgment to Southwest Warren’s insurance company.

      Matise stated in his affidavit that McCain gave him a copy of the documents

that McCain had received concerning the lawsuit. Matise acknowledged that it

was his responsibility to turn over the documents that Southwest Warren and

McCain had received about the lawsuit to Southwest Warren’s insurance agent.

Matise testified that he thought he had contacted the insurance agent and sent him

the relevant documents when, in fact, Matise had not. Based on the mistaken

belief that he had properly notified the insurance agent, Matise asserted that, when

he did not hear anything more about the lawsuit, he presumed the matter had



                                         4
already been properly resolved. He did not know otherwise until Crawford’s

attorney sent a copy of the judgment to Southwest Warren’s insurance company.

      Crawford filed a response to the motion. During the hearing on the motion,

the trial court acknowledged it was considering the substance of Southwest Warren

and McCain’s motion. The court expressed some doubt that Southwest Warren

and McCain had carried its burden under the law and asked for case law to support

both sides’ positions.    In its order, the trial court explicitly stated that it

“considered [the motion for new trial], the response, the pleadings, and arguments

of counsel.” Based upon these considerations, the trial court denied the motion.

                  Motion to Extend Post-Judgment Deadlines

      In their second issue, Southwest Warren and McCain argue that the trial

court erred by rescinding its original grant of their motion to extend the post-trial

deadlines. We do not need to resolve this because we hold that the order did not

harm Southwest Warren and McCain.

      Rule 306a of the Texas Rules of Civil Procedure requires a clerk of the court

to immediately give notice to the parties to a suit when a judgment is signed. TEX.

R. CIV. P. 306a(3). Typically, a trial court’s plenary power over a suit—including

the trial court’s authority to substantively change the judgment—expires following

30 days after the judgment is signed, unless a plenary-power-extending motion is

timely filed. See TEX. R. CIV. P. 329b. If a party does not receive the notice of a



                                         5
signed judgment sent by the clerk of the court, however, the party may file a

motion to reset the relevant deadlines for filing post-trial motions. TEX. R. CIV. P.

306a(4). The party seeking to reset the deadlines for filing post-trial motions must

establish that it did not acquire (1) notice or (2) actual knowledge of the judgment

within 20 days of—and not later than 90 days after—the signing of the judgment.

Id. If the trial court grants the motion, the court’s plenary power is reinstated and

all relevant post-judgment time periods begin to run as though the date of the

parties’ notice were the date the judgment had been signed. Id.

      Forty-nine days after the judgment had been signed, Southwest Warren and

McCain filed their motion to extend the post-trial motion and motion for new trial.

In their motion to extend the post-trial deadlines, Southwest Warren and McCain

alleged that they did not know about the judgment until 37 days after the judgment

had been signed. The trial court granted the motion to extend, designating “the

new date for the judgment” as the date that Southwest Warren and McCain alleged

in their motion that they obtained knowledge of the default judgment. The trial

court simultaneously granted their motion for new trial.

      Crawford filed a motion for the trial court to reconsider its granting both

motions. More than six months after the original judgment had been signed, the

trial court signed an order “rescinding both Orders . . . granting [Southwest Warren

and McCain’s] Motion to Extend Post-Judgment Deadlings and . . . Motion for



                                         6
New trial.” Southwest Warren and McCain filed another motion for new trial,

which the trial court denied.

      In Baylor Medical, the Supreme Court of Texas considered whether a trial

court can reconsider a grant of a motion for new trial. In re Baylor Med. Ctr. at

Garland, 280 S.W.3d 227, 229–232 (Tex. 2008). In its analysis, the court held that

a trial court can reconsider a grant of a motion for new trial. Id. at 231 (holding

trial court has power to set aside new trial order). The reasoning employed by the

court to reach this conclusion, however, compels us to conclude that, even if a trial

court has the authority to reconsider a grant of a motion to extend the post-

judgment deadlines, such a reconsideration does not have the legal effect of setting

the post-judgment deadlines back to their original deadlines.

      In Baylor Medical, the trial court rendered a take-nothing judgment based on

the jury’s verdict. Id. at 228. Later, the trial court granted a motion for new trial.

Id. After the trial court judge was succeeded, the new trial court judge reinstated

the judgment on the jury verdict. Id. Another motion to reconsider was filed, and

the trial court once again granted the motion for new trial. Id. at 228–29. At the

time, the law in Texas provided that a new trial could not be “ungranted.” Id. at

229. The Supreme Court of Texas determined that this ruling was based on

language in a rule of civil procedure that had since been modified. Id. at 230.




                                          7
      The court reasoned that the continuance of this ruling despite the change in

the language of the rules of civil procedure could have been “to prevent a situation

where reinstatement of a previous judgment would prevent a party from having

time to file an appeal.” Id. at 231. The court recognized that, if an order reversing

the grant of a motion for new trial were considered to reinstate the original

judgment—effectively rendering the grant of the new trial a nullity—then this

procedural effect would deprive the party filing the motion the ability to appeal

either order or any other preserved complaints. See id.

      The court held this was not a concern, however, because the court had

previously “clarified that ‘a trial judge who modifies a judgment and then

withdraws the modification has modified the judgment twice rather than never.’”

Id. (quoting Arkoma Basin Exploration Co. v. FMF Assocs. 1990–A, Ltd., 249

S.W.3d 380, 391 (Tex. 2008)). Accordingly, the order reinstating the original

judgment does not void or otherwise render the grant of a new trial a nullity. See

id. It, in effect, creates a new judgment that is identical to the original judgment in

all ways except for the date of signing. See id.; Gathe v. Gathe, 376 S.W.3d 308,

315 (Tex. App.—Houston [14th Dist.] 2012, no pet.) (holding “ungranting” new

trial does not reinstate original judgment but requires trial court to enter new

judgment). Accordingly, the appellate deadlines started to run from the order




                                          8
reinstating the original judgment, not from the date of the original judgment. See

Baylor Med., 280 S.W.3d at 231.

      Here, the trial court granted the motion to extend the post-judgment

deadlines. This had the effect of establishing the new date of the judgment—for

post-judgment deadline purposes—as the date that Southwest Warren and McCain

learned of the default judgment. TEX. R. CIV. P. 306a(4). Applying the logic of

Baylor Medical, the order “rescinding” the grant of the motion to extend did not

void or otherwise render the extension order a nullity. See Baylor Med., 280

S.W.3d at 231. Because the extension order still had effect, the post-judgment

deadlines continued to run from the date set by that order. See id. To the degree

that the order rescinding the grant of the extension has any legal effect, that effect

cannot be to set the post-judgment deadlines at an earlier time. See id.

      The prejudicial effect of a contrary ruling can be established by the facts of

this case. Southwest Warren and McCain filed their motion to extend the post-

judgment deadlines 49 days after the judgment, a time within the period allowed to

file a restricted appeal. See TEX. R. APP. P. 26.1(c) (setting deadline to file

restricted appeal for within six months of trial court’s judgment). The trial court

granted the motion a little more than three months after the original judgment had

been signed. The order “rescinding” the extension, however, was issued more than

six months after the original judgment had been signed, that is, after the time to file



                                          9
a restricted appeal had passed. See id. To give the rescission order the legal effect

of nullifying the extension of the post-judgment deadlines would deprive

Southwest Warren and McCain of their right to file a restricted appeal. 1

      We hold that the order “rescinding” the extension of the post-judgment

deadlines did not negatively affect Southwest Warren and McCain’s post-judgment

deadlines.2 Additionally, when the trial court granted the motion to extend the

post-judgment deadlines, it also granted Southwest Warren and McCain’s motion

for new trial. It subsequently signed an order rescinding the grant of the motion

for new trial. This order had the effect of creating a new judgment. See Baylor

Med., 280 S.W.3d at 231; Gathe, 376 S.W.3d at 315. Accordingly, post-judgment

deadlines were once again reset to run from the date of this last judgment. See


1
      Southwest Warren and McCain could still file a bill of review. See TEX. R. CIV. P.
      329b(f); TEX. CIV. PRAC. & REM. CODE ANN. § 16.051 (Vernon 2015); PNS
      Stores, Inc. v. Rivera, 379 S.W.3d 267, 275 (Tex. 2012). Given that the burden for
      a bill of review is more onerous than for a restricted appeal, however, we must
      conclude that Southwest Warren and McCain would be harmed by being deprived
      of review by restricted appeal. Compare Pike-Grant v. Grant, 447 S.W.3d 884,
      886 (Tex. 2014) (requiring party seeking restricted appeal to establish it did not
      participate in trial proceedings) with Mabon Ltd. v. Afri-Carib Enterprises, Inc.,
      369 S.W.3d 809, 812 (Tex. 2012) (requiring party seeking bill of review to
      establish failure to participate in trial proceedings was unmixed with any fault or
      negligence of that party).
2
      On appeal, Crawford argues the trial court properly granted her motion to
      reconsider, which contained additional evidence from her response to the motion
      to extend post-judgment deadlines. She does not argue on appeal, however, that
      the trial court erred by granting the original motion. We do not need to determine,
      then, whether the grant of a motion to extend the post-judgment deadlines is
      reviewable under the procedural posture of this case or, if so, whether error exists.

                                           10
Baylor Med., 280 S.W.3d at 231. There is no indication, then, that Southwest

Warren and McCain were harmed by the order rescinding the extension order.

Accordingly, we overrule Southwest Warren and McCain’s second issue.

                               Motion for New Trial

      In their first issue, Southwest Warren and McCain argue that the trial court

abused its discretion by denying their request for new trial.

A.    Standard of Review

      Denial of a motion for new trial is reviewed for abuse of discretion. Waffle

House, Inc. v. Williams, 313 S.W.3d 796, 813 (Tex. 2010); Sozanski v. Plesh, 394

S.W.3d 601, 604 (Tex. App.—Houston [1st Dist.] 2012, no pet.). A trial court

abuses its discretion if it acts without reference to any guiding rules or principles or

fails to correctly analyze or apply the law.        Celestine v. Dep’t of Family &

Protective Servs., 321 S.W.3d 222, 235 (Tex. 2010).

B.    Analysis

      In Craddock, the Texas Supreme Court set forth three requirements that a

defendant must satisfy to set aside a default judgment and obtain a new trial: (1)

the failure to file an answer or appear at a hearing was not intentional or the result

of conscious indifference, but was a mistake or accident; (2) a meritorious defense;

and (3) a new trial will not result in delay or prejudice to the plaintiff. Craddock v.

Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex. 1939).



                                          11
      As an initial matter, there is some question as to which motion and

accompanying evidence we are considering in reviewing the trial court’s ruling on

whether Southwest Warren and McCain satisfied the Craddock elements. In all,

three motions addressed whether Southwest Warren and McCain satisfied their

burden under Craddock.       After the trial court granted Crawford’s motion to

reconsider, Southwest Warren and McCain filed their final motion for new trial.

The evidence they presented with this motion was more detailed than what they

presented with the first motion. There is at least some question as to whether the

trial court was obligated to entertain for a third time whether Southwest Warren

and McCain satisfied the Craddock elements.

      We do not need to resolve this question, however. Even assuming the trial

court was not obligated to consider the substance of Southwest Warren and

McCain’s third opportunity to show it satisfied the Craddock elements, the record

shows that the trial court did consider the substantive arguments. At the hearing,

the trial court asked questions about the parties’ substantive proof and requested

submissions of case law on whether Southwest Warren and McCain had satisfied

the first element. Additionally, in its order denying the final motion for new trial,

the trial court explicitly stated that it “considered [the motion for new trial], the

response, the pleadings, and arguments of counsel.” See Stephens v. Dolcefino,

126 S.W.3d 120, 133 (Tex. App.—Houston [1st Dist.] 2003), pet. denied, 181



                                         12
S.W.3d 741 (Tex. 2005) (holding trial court can consider late-filed evidence, but

record must affirmatively show evidence considered by trial court); Fed. Home

Loan Mortg. Corp. v. Pham, 449 S.W.3d 230, 236–37 (Tex. App.—Houston [14th

Dist.] 2014, no pet.) (holding when record shows trial court considered motion and

attached evidence, appellate courts can consider them as well on review). Because

the trial court undertook this substantive determination, it is part of our review on

appeal.

      The first Craddock element is the failure to file an answer or appear at a

hearing was not intentional or the result of conscious indifference, but was a

mistake or accident. 133 S.W.2d at 126. “Where factual allegations in a movant’s

affidavits are uncontroverted, it is sufficient that the motion for new trial and

accompanying affidavits set forth facts which, if true, would satisfy the Craddock

test.” Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 82 (Tex. 1992). While

Crawford challenges whether the evidence presented in Southwest Warren and

McCain’s final motion for new trial satisfy the first Crawford element, nothing in

her evidence controverts Southwest Warren and McCain’s evidence. Accordingly,

if the evidence is sufficient to establish the first element, we must take it as true.

See id.

      McCain asserted in his affidavit that, when he received notice of the lawsuit,

he turned the documents over to Matise. Matise told McCain that Southwest



                                         13
Warren would handle having the answer filed for him and for the company.

Matise further stated that he would contact the insurance agent so the agent could

handle the matter. When he did not hear anything more about the lawsuit, he

presumed the matter had been properly resolved. He did not know otherwise until

Crawford’s attorney sent a copy of the judgment to Southwest Warren’s insurance

company.

      Matise asserted in his affidavit that McCain gave him a copy of the

documents that McCain had received concerning the lawsuit.                  Matise

acknowledged that it was his responsibility to turn the documents that Southwest

Warren and McCain had received about the lawsuit over to Southwest Warren’s

insurance agent. Matise testified that he thought he had contacted the insurance

agent and sent him the relevant documents when, in fact, Matise had not. Based on

the mistaken belief that he had properly notified the insurance agent, Matise

asserted that, when he did not hear anything more about the lawsuit, he presumed

the matter had already been properly resolved. He did not know otherwise until

Crawford’s attorney sent a copy of the judgment to Southwest Warren’s insurance

company.

      The evidence in both of these affidavits establish that the failure to answer

was not intentional or the result of conscious indifference. McCain followed

company procedure. Matise thought he followed company procedure and notified



                                        14
the insurance agent, but mistakenly failed to do so. We hold this is sufficient to

satisfy the first element of Craddock. See Republic Bankers Life Ins. Co. v. Dixon,

469 S.W.2d 646, 647 (Tex. Civ. App.—Tyler 1971, no writ) (holding attorney

forgetting to file answer is sufficient to satisfy Craddock); see also Dir., State

Employees Workers’ Comp. Div. v. Evans, 889 S.W.2d 266, 269 (Tex. 1994)

(citing Republic Bankers as example of no conscious indifference).

      Crawford argues that the evidence is conclusory because Matise did not

testify about when he forgot to notify the insurance agent.        Matise testified,

however, that it was company policy to turn over documents about a lawsuit to the

insurance agent “so that appropriate action can be taken to defend the lawsuit.”

This could only happen if Matise turned over the documents within the time to file

the answer. By asserting that he thought he had done what was required of him

under company policy, it follows that Matise thought he had done what was

required of him in the time for the insurance company to hire an attorney to file an

answer.    There is no other evidence in the record suggesting that Matise

intentionally waited until it was time to file a lawsuit and then accidentally forgot

to send the documents to the insurance agent after the proper time to file an answer

had expired.

      Crawford also argues that Holt Atherton establishes that Matise’s affidavit

was insufficient to satisfy Craddock’s first prong. In Holt Atherton, the court held



                                         15
that, “[w]hen a defendant relies on his agent to file an answer, he must demonstrate

that both he and his agent were free of conscious indifference.” 835 S.W.2d at 83.

That requirement has been satisfied here.         McCain properly turned over the

documents to Matise, and Matise asserted that he thought he had notified his

insurance agent, but never actually did. There could not have been conscious

indifference on the part of the insurance agent who was not actually informed of

the suit until after judgment was entered. 3

      The second Craddock element is a meritorious defense. 133 S.W.2d at 126.

Unlike the first element, this is not a matter that can be controverted by the

opposing party. Ivy v. Carrell, 407 S.W.2d 212, 214 (Tex. 1966). Instead, as long

as the party asserts a defense that could prevent the plaintiff’s recovery and

presents prima facie evidence of that defense, the second Craddock element is

satisfied. Id.

      Here, Southwest Warren and McCain alleged in their final motion for new

trial that the vehicle McCain had been driving at the time of the incident had been

parked on the side of the road, outside the lane of moving traffic. Accordingly, by


3
      Crawford points out in her briefs that she served Southwest Warren’s documents
      on an agent of service, suggesting there was no evidence about that agent’s
      actions. There is no indication in the record, however, that Southwest Warren
      relied on that agent to file an answer. See Holt Atherton Indus., Inc. v. Heine, 835
      S.W.2d 80, 83 (Tex. 1992). (“When a defendant relies on his agent to file an
      answer, he must demonstrate that both he and his agent were free of conscious
      indifference.” (emphasis added)).

                                           16
this defense, they claim that any fault in the accident must have been Crawford’s.

McCain asserted the same in his affidavit. Specifically, he asserted, “I was parked

on the shoulder of the road and completely out of the moving lane of traffic when

plaintiff collided with the vehicle I was driving.” We hold this is sufficient to

establish a meritorious defense.

      The third Craddock element is a new trial will not result in delay or

prejudice to the plaintiff. 133 S.W.2d at 126. “[O]nce the defendant has alleged

that the granting of a new trial will not delay or otherwise injure the plaintiff, the

burden of going forward with proof of injury shifts to the plaintiff.” Cliff v.

Huggins, 724 S.W.2d 778, 779 (Tex. 1987). Such a burden is carried by the

plaintiff by showing the loss of witnesses or other valuable evidence. Evans, 889

S.W.2d at 270.

      Southwest Warren and McCain asserted that the grant of the new trial would

not cause unreasonable delay, thereby shifting the burden to Crawford to disprove

this assertion. See Cliff, 724 S.W.2d at 779. Crawford asserted in her response to

the final motion for new trial and accompanying affidavit that (1) she had not been

able to find out from Southwest Warren and McCain whether they knew of any

witnesses from the accident, (2) it would be “difficult or impossible” for her to

locate witnesses that long after the accident, (3) it would be “difficult or

impossible” to examine the condition of her car, (4) her own memory of the of the



                                         17
accident has diminished because the experience was traumatic and “she did not

want to remember the frightening collision again,” and (5) she would be burdened

by the expense of further attorneys’ fees.

      For the first four assertions, even taking all of these assertions as true,

however, Crawford has not carried her burden. Once the burden is on the plaintiff

to show undue delay or prejudice, she carries this burden by showing the loss of

witnesses or other valuable evidence. Evans, 889 S.W.2d at 270. None of the

assertions presented by Crawford show an actual loss. Even if the trial court

accepted as true that it would be impossible to locate witnesses or examine the

condition of her car, to show an actual loss, Crawford first needed to establish that

the evidence was previously available but then lost due to the delay caused by

Southwest Warren and McCain’s failure to answer. See id. That is, Crawford

would need to show that she had evidence available to her at the time she filed suit

but that the evidence has been lost in the time since she filed the motion for new

trial. See id.; see also Wiseman v. Levinthal, 821 S.W.2d 439, 441 (Tex. App.—

Houston [1st Dist.] 1991, no writ) (“Trial courts generally should rule in favor of

giving a defendant his day in court when a motion for new trial is filed after a

default judgment.”).

      For Crawford’s assertion that the new trial would cause her financial

hardship by having to pay even more attorneys’ fees, Southwest Warren and



                                         18
McCain have offered to reimburse Crawford for the attorneys’ fees she incurred in

obtaining the default judgment. We hold this is sufficient to rebut Crawford’s

claim of financial hardship. See Cliff, 724 S.W.2d at 779 (holding, though not

precondition to obtaining new trial, offer to reimburse fees incurred in obtaining

default judgment is important consideration for third element of Craddock test).

      We hold that Southwest Warren and McCain satisfied their burden on this

third element and that Crawford failed to carry her burden of establishing undue

delay or prejudice. We sustain Southwest Warren and McCain’s first issue.4

                                   Conclusion

      We reverse the trial court’s judgment and remand the case for a new trial

and for a hearing on Crawford’s reasonable attorneys’ fees incurred in seeking the

default judgment to be assessed against Southwest Warren and McCain.




                                             Laura Carter Higley
                                             Justice

Panel consists of Justices Jennings, Higley, and Huddle.




4
      Because we sustain this issue, we do not need to reach Southwest Warren and
      McCain’s remaining issues, which cannot provide them with greater relief. See
      TEX. R. APP. P. 47.1.

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