
NO. 07-03-0382-CV



IN THE COURT OF APPEALS



FOR THE SEVENTH DISTRICT OF TEXAS



AT AMARILLO



PANEL A



JANUARY 12, 2005



______________________________



IN THE MATTER OF THE MARRIAGE OF

LISA ANN RUNBERG AND DOAK TIM RUNBERG

AND IN THE INTEREST OF S.F.R., M.D.R., J.L.R., 

J.G.R. AND Z.G.R., CHILDREN

_________________________________



FROM THE 47TH DISTRICT COURT OF RANDALL COUNTY;



NO. 52,652-A; HONORABLE RICHARD DAMBOLD, JUDGE



_______________________________



Before JOHNSON, C.J., and REAVIS and CAMPBELL, JJ.

OPINION

 Doak Tim Runberg challenges a default judgment of divorce.  He contends that the trial court abused its discretion in overruling his motion for new trial because he had appeared in the case, but was given no notice of the setting for final hearing.  We reverse and remand.





BACKGROUND

On March 20, 2003, Lisa Ann Runberg filed suit in the 47th District Court of Randall County for divorce from appellant Doak Tim Runberg.  On March 22nd, Doak was served with citation and with a temporary restraining order which had been granted by a visiting judge.  The restraining order, among other matters, commanded Doak to appear before Judge James W. Anderson on March 26th, to show cause why temporary relief should not be granted.  Judge Anderson was sitting for the regular judge of the 47th District Court.  

Lisa, her attorney, and Doak, acting 
pro se
, were in court before Judge Anderson on March 26th.  The temporary orders signed by Judge Anderson following the hearing recited that (1) Doak appeared in person and announced ready, (2) “[t]he parties have agreed to the terms of this order,” and (3) the Court examined the record, the agreement of the parties and heard evidence.  The thirty-page written order delineated (1) rights and duties of Lisa and Doak as conservators of the children of the marriage; (2) provisions for visitation with their children; (3) Doak’s obligations to pay child support of $2,500 per month, provide insurance and health care for the children, pay spousal support of $500 per month, prepare and file income tax returns, timely pay specified debts; and (4) the date by which Doak had to move out of the home of the parties.  The orders contained three and one-half pages of detailed injunctive provisions directed to Doak and a statement that Lisa and Doak waived issuance and service of the writ of injunction by stipulation.    

As of May 22, 2003, the clerk’s record reflected no further proceedings in the suit.  Doak’s appearance day
 had passed and he had not filed an answer.  
See
 
Tex. R. Civ. P.
 237.
(footnote: 1)  Without notice to Doak, a final hearing on Lisa’s petition for divorce was held on May 22nd and a default decree of divorce was signed that day.  
See
 TRCP 239.

Doak filed a written answer on June 6th.  
On June 20th, he filed a pleading entitled Respondent’s Motion for New Trial and Motion to Vacate All Court Judgments and Orders From and After May 22, 2003.  Several documents were attached to the pleading, including an affidavit by Doak in which he denied any prior notice of the final 
hearing.  The affidavit did not (1) offer a reason for Doak’s failure to file an answer to the suit before the default judgment was granted, (2) urge any manner of defense to the suit, or (3) offer any method of preventing harm to Lisa if a new trial were to be granted.  Also attached to Doak’s pleading were a copy of a letter dated May 13, 2003 from Doak’s attorney to Lisa’s attorney indicating that Doak had retained counsel, and a statement of facts from the final 
hearing.  The statement of facts from the May 22nd final hearing contained testimony by Lisa in which she asked the judge to set child support at $2,500 per month, which was the same amount of support set to be paid as temporary child support “. . . after a hearing in which Mr. Runberg appeared.” Lisa did not file a response to Doak’s pleading.

By order dated June 26, 2003, the regular judge of the 47th District Court denied Doak’s motion for new trial without a hearing.  A hearing on Doak’s Motion to Vacate the Court’s Judgments and Orders after May 22, 2003, was held on July 16th.  That motion was denied, but Doak makes no complaint about the ruling, and we will not address that ruling.
(footnote: 2) 
             

By one issue, Doak asserts that the trial court abused its discretion in failing to grant his motion for a new trial.
(footnote: 3)  Citing 
LBL Oil Co. v. International Power Servs., Inc
., 777 S.W.2d 390 (Tex. 1989), Doak maintains that, because he had “appeared” in the case, his due process rights under the Fourteenth Amendment to the United States Constitution were violated when the default judgment hearing 
was held without notice to him and he was entitled to have the default decree set aside.  He references 
Bryant v. Gamblin
, 829 S.W.2d 228 (Tex.App.–Eastland 1991, writ denied) as authority for the position that, under the circumstances, his motion for new trial did not need to comply with the mandates of 
Craddock v. Sunshine Bus Lines, Inc.
, 134 Tex. 388, 133 S.W.2d 124 (1939).  In the alternative, he asserts that if 
Craddock
 applies, he was required to show only that his failure to appear at the final hearing was not intentional or the result of conscious indifference.  He cites 
Lopez v. Lopez
, 757 S.W.2d 721 (Tex. 1988) and 
In re Marriage of Parker
, 20 S.W.3d 812 (Tex.App.–Texarkana 2000, no pet.) as support for his alternative position.    

Lisa disagrees, presenting three arguments.  First, she references 
Brown v. Brown
, 521 S.W.2d 730 (Tex.App.–Houston [14th
 Dist.] 1975, no writ), as support for the trial court’s granting of judgment and denial of new trial.  Next, she argues that Doak had not “appeared” in the suit and his due process rights under the Fourteenth Amendment were not violated.  Finally, she maintains that the trial court did not err in denying a new trial because Doak failed to support his motion for new trial with evidence fulfilling requirements set out by 
Craddock
.  

STANDARD OF REVIEW

The trial court’s denial of a motion for new trial is reviewed for abuse of discretion.  
Strackbein v. Prewitt
, 671 S.W.2d 37, 38 (Tex. 1984). 
 
A trial court abuses its discretion if its decision is arbitrary, unreasonable, and without reference to guiding rules and principles.  
See
 
Goode v. Shoukfeh
, 943 S.W.2d 441, 446 (Tex. 1997).  Likewise, a trial court abuses its discretion if it declines to exercise a power of discretion vested in it by law when the circumstances require that the power be exercised; or if it arrives at its choice in violation of an applicable legal rule, principle, or criterion.  
See
 
Koch v. Koch
, 27 S.W.3d 93, 95 (Tex.App.–San Antonio 2000, no pet.);
 
Landon v. Jean-Paul Budinger, Inc.
, 724 S.W.2d 931, 939-40 (Tex.App.–Austin 1987, no writ)
. 

A trial court does not abuse its discretion in denying a motion for new trial when the granting of a new trial is dependent on questions of fact to be decided by the trial court, unless the evidence presented conclusively establishes factual bases mandating the granting of a new trial.  
See
 
Golden Eagle Archery, Inc. v. Jackson
, 24 S.W.3d 362, 372 (Tex. 2000). 

ANALYSIS

In 
LBL Oil Co
, 777 S.W.2d 390, the defendant filed a written motion to dismiss for lack of personal jurisdiction.  The motion to dismiss was denied.  A written answer was not filed and default judgment was taken without notice to the defendant.  The defendant appealed by writ of error.  In reversing the default judgment, the Texas Supreme Court said simply that once a defendant has made an appearance in a cause, the defendant is entitled to notice of a trial setting as a matter of due process under the Fourteenth Amendment.  
Id
. at 390-91.  The Supreme Court did not consider the defendant’s written challenge to the trial court’s jurisdiction to be a written answer within the contemplation of the rules of civil procedure, 
see
 TRCP 46 (every petition and answer shall be contained in one instrument of writing) and TRCP 85 (original answer may consist of pleas to the jurisdiction or other dilatory pleas), because the Court specifically referred to the appeal as involving “a post-appearance default judgment case,” as opposed to a post-answer default judgment case.  
See
 
LBL Oil Co
., 777 S.W.2d at 390
.

Lisa contends that we should not follow 
LBL Oil Co.
, but, rather, follow 
Brown
,
 521S.W.2d 730.  In 
Brown
, the respondent husband was served with citation and appeared with counsel at a show-cause hearing, although he did not file any written document which could be considered as a pleading.  Judgment of divorce was subsequently entered without notice to the husband, and husband appealed.  The court of appeals held that even though the husband appeared in the suit, absent a written pleading, the case was uncontested and advance notice of the final hearing was not required by the rules of civil procedure or the local trial court rules.  
Id
. at 732.  The appellant in 
Brown
, however, did not contend that his due process rights were violated, as Doak contends in the matter before us.  
Brown
 is inapposite.

Next, we consider whether Doak made an “appearance” in the divorce suit when he attended the hearing before Judge Anderson on March 26, 2003.  In doing so, we note that 
if no written answer 
has been filed in the lawsuit, 
whether a party has “appeared” depends on the nature and quality of the party’s activities in the case.  
See
 
Bradford v. Bradford
, 971 S.W.2d 595, 597 (Tex.App.–Dallas 1998, no pet.).  The nature and quality of activities to be considered encompass the filing of written documents, 
see
 
LBL Oil Co.
, 777 S.W.2d at 390, and personal activity.  
See
 
Bradford
, 971 S.W.2d at 598; 
Smith v. Amarillo Hosp. Dist.
, 672 S.W.2d 615, 617 (Tex.App.–Amarillo 1984, no writ).  

Doak’s affidavit, which was attached to his motion for new trial, did not address his appearance at or the degree of his participation in the March 26th hearing on temporary orders.  However, the temporary orders and Lisa’s testimony at the default hearing, which were before the trial court at the time Doak’s uncontested motion for new trial was denied, showed that Doak attended court, announced “ready” at the March 26th hearing, and entered into an extensive agreement as to temporary orders governing conservatorship of children of the marriage, property of the marriage, child and spousal support he would pay, and allocation of responsibility for debts.  He waived, by stipulation, service of the agreed-upon temporary injunction which limited certain of his activities, including his ability to deal with property, money, financial matters and credit cards, until entry of the final decree of divorce or further orders of the court.  The docket sheet notation indicated that agreed temporary orders were announced and acknowledged by the parties and were adopted by the Court as temporary orders.
(footnote: 4)   

Doak’s actions during his attendance at the March 26th hearing were of a different nature and quality than those actions which we held did not comprise an appearance by the appellant in 
Smith
.  
See
 
Smith
, 672 S.W.2d 615.  
In 
Smith
, the appellant had not been served with the live pleading on which the trial was being held nor did the appellant  announce “ready.”  Further, the appellant in 
Smith
 did not enter into an extensive agreement concerning the subject matter of the suit, which agreement was then incorporated into a court order.

Doak’s participation was more of the nature and quality of participation by the appellant in 
Bradford
, 971 S.W.2d 595.  In 
Bradford
, the appellant appeared at two hearings, announced “ready,” and testified at one of the hearings.  The appellant’s actions in 
Bradford
 were determined to have been an appearance such that the trial court’s failure to set aside the default judgment taken without notice was an abuse of discretion.  
Id
. at 598. 

At the time the trial court denied Doak’s motion for new trial, the evidence before the court showed that Doak did not simply attend court before Judge Anderson, as he was directed to do by the show-cause order, then merely observe the proceedings.  
See
 
Smith
, 672 S.W.2d at 617.  The evidence reflected that Doak announced that he was ready for the hearing and participated in the proceeding by cooperating in submitting an agreement to the court which governed the rights and obligations of the parties, their children and their property, subject to further orders of the court.  He agreed to subject himself to a detailed court order - the injunction - which restricted his personal freedom and ability to deal with his property and finances.  On the other hand, there was no evidence before the trial court at the time the motion for new trial was denied which would have supported a finding that Doak was only a passive observer of the proceedings.  Doak’s actions at the March 26, 2003 hearing were of such nature and quality as to comprise an appearance in the suit as a matter of law, 
see
 
Golden Eagle Archery, Inc.
, 24 S.W.3d at 372, and his due process right to notice of the final hearing attached.  
See
 
LBL Oil Co.
, 777 S.W.2d at 390-91.  
 

Finally, we address whether Doak was required to fulfill the mandates of 
Craddock
 in order to have the default judgment set aside.  
Craddock
 sets out the rule applicable to motions for new trial seeking to set aside default judgments entered for failure to file an answer as well as for post-answer defaults.  
See
 
Ivy v. Carrell
, 407 S.W.2d 212, 213 (Tex. 1966); 
Craddock
, 133 S.W.2d at 126.  
Craddock
 revised the guiding rule or principle for trial courts to follow in exercising equitable discretion to grant or deny new trials following entry of default judgments:  

Some lack of uniformity [in trial court rulings granting or denying new trials] still exists.  This is probably due, in part at least, to the fact that 
the question is controlled by principles of equity
. . . .  While trial courts have some measure of discretion in the matter, as, in truth, they have in all cases governed by equitable principles, it is not an unbridled discretion to decide cases as they might deem proper, without reference to any guiding rule or principle.  Trial judges desire and are entitled to have a principle or rule to guide them, and we, therefore, reannounce, in slightly changed language the rule established by the above authorities, as follows: 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 a 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 is a just rule.  It prevents an injustice to the defendant without working an injustice on the plaintiff.  Such a rule has the sanction of equity.



Craddock
, 133 S.W.2d at 126 (emphasis added). 

The Texas Supreme Court has maintained that the law in regard to granting new trials after default judgment is set out in 
Craddock
.  
See
 
Strackbein
, 671 S.W.2d at 39.
(footnote: 5)  But, the Supreme Court has also held that all three prongs of 
Craddock
 are not always applicable.  In 
Lopez
, the Supreme Court held that if a defendant did not receive actual or constructive notice of trial, due process prevented application of the second prong of the 
Craddock
 test.  
See
 
Lopez
, 757 S.W.2d at 72
3 (
citing
 
Peralta v. Heights Med. Ctr., Inc
., 485 U.S. 80, 108 S.Ct. 896, 99 L.Ed.2d 75 (1988)).  Appellate courts have dealt with 
Craddock
’s applicability in different ways when notice was at issue.  
See
 
In re Marriage of Parker
, 20 S.W.3d at 817; 
Bryant
, 829 S.W.2d 228.      

As noted above, all three 
Craddock
 elements are based in equity.  The purpose of the third element of 
Craddock
 is to prevent injustice by protecting a party who takes a default judgment from undue delay or other detriment, such as a loss of witnesses or other valuable evidence, that would disadvantage the judgment-holder in presenting the merits of the case at a new trial.  
See
 
Director, State Employees Workers' Comp. Div. v. Evans
, 889 S.W.2d 266, 270 (Tex. 1994).  

If the second prong of 
Craddock
’s equitable rule yields to Constitutional due process rights of the party who suffered a no-notice judgment, which it does, 
see
 
Lopez
, 757 S.W.2d at 723, we fail to see why 
Craddock
’s third prong 
should not also yield.  We conclude that it should, and that equitable protection of the judgment-holding party, which is the subject of 
Craddock
’s third prong, does not override the due process right of a defendant to proper notice of the dispositive final divorce hearing.  
See
 
Peralta
, 485 U.S. at 86-7; 
Lopez
, 757 S.W.2d at 723; 
In re Marriage of Parker
, 20 S.W.3d at 817-18.  It follows that insofar as Doak is concerned, the holding of 
Lopez
 applies to both the second and third prongs of 
Craddock
.  That is, the violation of Doak’s due process right to actual or constructive notice of the final hearing means that Doak’s motion for new trial and attached affidavits need not have either set up a meritorious defense or addressed the avoidance of injury or delay to Lisa by the granting of a new trial.  

Given the record before us, we need not decide whether 
Lopez
 also extends to the first prong of 
Craddock
.  If 
Peralta
 and 
Lopez
 apply to vitiate the first 
Craddock
 prong under this record, then the trial court abused its discretion in failing to grant a new trial because the final decree was entered in violation of Doak’s due process rights.  
See
 
Goode
, 943 S.W.2d at 446; 
Koch
, 27 S.W.3d at 95.
  
If 
Peralta
 and 
Lopez
 do not apply to vitiate the first 
Craddock
 prong, then the trial court abused its discretion in failing to grant a new trial because Doak’s failure to attend the final hearing could not have been intentional or the result of conscious indifference when, according to his uncontested affidavit, he did not have notice.  
See
 
In re Marriage of Parker
, 20 S.W.3d at 817.  Accordingly, the result is the same regardless of whether the first prong of 
Craddock
 is abrogated by 
Peralta
 and 
Lopez
: the trial court abused its discretion in failing to set the default judgment aside and grant a new trial. 
 
See
 
Peralta
, 485 U.S. at 86-7.  

Doak’s issue is sustained.  

The judgment of divorce is reversed and the cause is remanded for a new trial.      





Phil Johnson

Chief Justice





Reavis, J., dissenting.

              

             



FOOTNOTES
1:Further reference to a rule of civil procedure will be by reference to “TRCP_.”


2:2
See
 
Platt v. Platt
, 991 S.W.2d 481, 483-84 (Tex.App.–Tyler 1999, no pet.), for discussion of a similar procedural situation.


3:3
Doak’s issue contains a statement to the effect that because he did not receive notice of the default judgment hearing, the trial court did not have jurisdiction over him.  He cites no authority for the statement, makes no explanation for the failure to cite authority, and does not provide substantive analysis of the jurisdiction statement in his argument.  We deem any assertion that a lack of notice denied the trial court jurisdiction as waived.  
See
 
Moser v. Davis
, 79 S.W.3d 162, 169 (Tex.App.–Amarillo 2002, no pet.). 


4:4
A copy of the reporter’s record of the March 26th hearing held by Judge Anderson was not attached to Doak’s motion for new trial and was not otherwise before the court when Doak’s motion for new trial was denied. 


5:5
In 
LBL Oil Co.
, the Supreme Court did not address whether the appellant met the 
Craddock
 requirements.  However, 
LBL Oil Co.
 did not involve a motion for new trial.   It involved direct appeal by writ of error.  Appeal by writ of error constituted a direct attack on the default judgment.  
See
 
McKanna v. Edgar
, 388 S.W.2d 927, 928 (Tex. 1965).  The question in such an appeal was whether error which would vitiate the trial court's judgment was apparent on the face of the record.  
Id
.


