Metro A, LLC, Sun Holdings, LLC, POP Restaurants, LLC, Golden Restaurants, Inc., Firebrand Properties, LP, Corral Group, LP, Kansas Corral, LLC, Sunny Corral Management, LLC, Guillermo Perales, Frys Management, LLC v. Jessica Polley

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH

NO. 02-09-00025-CV

METRO A, LLC, SUN HOLDINGS, APPELLANTS
LLC, POP RESTAURANTS, LLC,
GOLDEN RESTAURANTS, INC.,
FIREBRAND PROPERTIES, LP,
CORRAL GROUP, LP, KANSAS
CORRAL, LLC, SUNNY CORRAL
MANAGEMENT, LLC, GUILLERMO
PERALES, FRYS MANAGEMENT,
LLC, TAG CORRAL, LLC, AND
INDIE CORRAL, LLC
V.

JESSICA POLLEY APPELLEE

----------

FROM THE 48TH DISTRICT COURT OF TARRANT COUNTY

----------

MEMORANDUM OPINION1
----------

I. Introduction

Appellants Metro A, LLC; Sun Holdings, LLC; Pop Restaurants, LLC;

Golden Restaurants, Inc.; Firebrand Properties, LP; Corral Group, LP; Kansas

1
See Tex. R. App. P. 47.4.
Corral, LLC; Sunny Corral Management, LLC; Guillermo Perales; Frys

Management, LLC; TAG Corral, LLC; and Indie Corral, LLC (collectively,

Appellants) appeal the default judgment against them and in favor of Appellee

Jessica Polley.

The notice of this appeal was filed in January 2009. Since that time,

several of the appellants filed for bankruptcy protection, and we administratively

abated the appeal on two separate occasions pending the bankruptcy court‘s

lifting the automatic stay. In June 2010, the bankruptcy court issued an order

lifting the bankruptcy stay with respect to this appeal. In addition, we abated this

appeal so that the trial court could enter a written order memorializing Polley‘s

nonsuit of An-Mar Companies, LLC and a severance of Polley‘s claims against

Denar Restaurants, LLC. Because of the bankruptcy filings, there are now two

groups of Appellants, the Debtor Appellants2 and the Non-Debtor Appellants, 3

and each group filed a brief.

Appellants collectively contend in seven issues (and in other arguments

not listed in their statement of issues) that the trial court erred by granting the

default judgment against them because (1) seven of the Appellants were not

2
The Debtor Appellants are Denar Restaurants, LLC; Golden Restaurants,
Inc.; Kansas Corral, LLC; Sunny Corral Management, LLC; TAG Corral, LLC;
and Indie Corral, LLC (hereinafter Debtor Appellants).
3
The Non-Debtor Appellants are Metro A, LLC; Sun Holdings, LLC; Pop
Restaurants, LLC; Firebrand Properties, LP; Corral Group, LP; Frys
Management, LLC; and Guillermo Perales (hereinafter Non-Debtor Appellants).

2
properly served with Polley‘s original petition, (2) two of the Non-Debtor

Appellants did not exist in 2004 when Polley suffered her underlying injury, (3)

Polley‘s pleading did not provide fair notice or allege a cause of action

recognized by Texas law, (4) Polley offered no evidence at the default judgment

hearing of a causal nexus between Debtor Appellants‘ conduct and her injuries,

and (5) Appellants were not provided notice of the default proceeding.

Appellants also contend that the trial court erred by overruling their motion for

new trial because they submitted evidence sufficient to satisfy each of the

Craddock factors.4 We affirm.

II. Background

In 2004, Polley filed suit against nonparty Metro Restaurants, LLC (Metro

Restaurants); Burger King Corporation; BK Magic Holdings, LLC; Derric Keith

Jones; and Fernando Legaria alleging that she was sexually assaulted while

working as an employee of Metro Restaurants. The lawsuit proceeded to a jury

trial in May 2007, and the trial court signed a judgment against Metro

Restaurants in July 2007 for $869,172.95, including actual damages and

prejudgment interest.

4
See Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d
124, 126 (1939) (setting forth the three factors for setting aside a default
judgment and ordering a new trial).

3
 In July 2008, Polley filed a new lawsuit against Metro Restaurants and

fourteen new defendants,5 alleging that Metro Restaurants and the other

defendants had engaged in fraudulent transfers to prevent her from collecting the

July 2007 judgment. Metro Restaurants filed for bankruptcy eight days after

Polley filed the July 2008 lawsuit.6

In September 2008, Polley filed the instant lawsuit. With the exception of

Metro Restaurants, the defendants in this lawsuit are the same defendants that

Polley sued in July 2008.7 Relevant to this appeal, Polley‘s September 2008

original petition alleged the following:

IV. BACKGROUND INFORMATION

Plaintiff, JESSICA POLLEY, now aged nineteen (19) and a
former employee of Metro Restaurants, LLC, was sexually assaulted
on multiple occasions at the BURGER KING #13903, located at 101
West Euless Blvd., Euless, Tarrant County, Texas. These sexual
assaults occurred on multiple occasions when the Plaintiff was
fifteen (15) years of age and while employed by Metro Restaurants,
LLC. The perpetrator of these sexual assaults was Derric Jones,
employee and supervisor for Metro Restaurants, LLC.

V. CAUSE OF ACTION

5
With the exception of An-Mar Companies, LLC and Denar Restaurants,
LLC, the defendants in the July 2008 suit are the Appellants in this appeal.
6
The July 2008 lawsuit remained pending as of the time the parties filed
their briefs in this appeal.
7
The citation to An-Mar Companies, LLC was returned unexecuted, and
Polley nonsuited An-Mar Companies, LLC before taking the default judgment
against Appellants. Also, the trial court severed Polley‘s claims against Denar
Restaurants, LLC in July 2009. Thus, An-Mar Companies, LLC and Denar
Restaurants, LLC are not parties to this appeal.

4
 Defendants, METRO A, LLC; DENAR RESTAURANTS, LLC;
SUN HOLDINGS, LLC; POP RESTAURANTS, LLC; GOLDEN
RESTAURANTS, INC.; FIREBRAND PROPERTIES, LP; CORRAL
GROUP, LP; KANSAS CORRAL, LLC; SUNNY CORRAL
MANAGEMENT, LLC; FRYS MANAGEMENT, LLC; TAG CORRAL,
LLC; INDIE CORRAL, LLC[;] AN-MAR COMPANIES, LLC; and
GUILLERMO PERALES, Individually, are jointly and severally liable
for the negligence of Metro Restaurants, LLC. Accordingly, Plaintiff
seeks such damages from the above-named Defendants.

Polley‘s original petition did not include any other factual allegations or legal

theories.

Polley elected to serve Appellants by certified mail, and the return receipts

in the appellate record were signed as received between September 17 and 22,

2008. Based on these service dates, Appellants‘ answer deadline was October

13, 2008.8 See Tex. R. Civ. P. 99(b). On October 10, 2008, three days before

the answer deadline, the legal assistant for Appellants‘ prior counsel filed a letter

with the trial court that included an attached ―Notice of Chapter 7 Bankruptcy

filing of Metro Restaurants, LLC.‖

On October 15, 2008, the trial court signed a no-answer default judgment

against Appellants for $957,011.63, which is the amount of the July 2007

judgment plus postjudgment interest. Appellants filed a motion for new trial on

November 13, 2008, contending that their failure to answer was not intentional or

a result of conscious indifference because of a calendaring mistake and because

8
As discussed below, Appellants contend that only six of the defendants
were properly served.

5
the lawsuit was subject to the automatic stay that resulted from nonparty Metro

Restaurants‘s bankruptcy filing. The trial court conducted an evidentiary hearing

on the motion on December 3, 2008, but took the matter under advisement at the

conclusion of the hearing. The trial court did not otherwise rule on the motion for

new trial, and it was overruled by operation of law. See Tex. R. Civ. P. 329b(c).

This appeal followed.

III. Default Judgment

Appellants contend that the trial court erred by granting the default

judgment against them because (1) some of the Appellants were not properly

served with Polley‘s petition, (2) Polley‘s pleading did not provide fair notice or

allege a cause of action recognized by Texas law, (3) Polley presented no

evidence at the default judgment hearing of a causal link between Debtor

Appellants‘ conduct and her injuries, (4) Appellants were not provided notice of

the default proceeding, and (5) two of the Non-Debtor Appellants did not exist at

the time of Polley‘s 2004 sexual assault.

A. Service of Citation

Non-Debtor Appellants contend in their first issue, and Debtor Appellants

contend in an unnumbered issue, that the trial court erred by granting the default

judgment against seven of the Appellants 9 because they were not properly

9
The seven Appellants at issue are Metro A, LLC; Kansas Corral, LLC;
Sunny Corral Management, LLC; Frys Management, LLC; Tag Corral, LLC; Indie
Corral, LLC; and Guillermo Perales.

6
served with citation. Specifically, Appellants argue that someone other than the

registered agent for six Appellants and someone other than Guillermo Perales

signed the return receipts that allegedly established service by certified mail.

Polley responds that Non-Debtor Appellants judicially admitted that they were

served on September 17 and 18, 2008.

To support their argument concerning improper service, Appellants rely

heavily on the Texas Supreme Court‘s opinion in Wilson v. Dunn, 800 S.W.2d

833, 836 (Tex. 1990). In Wilson, the supreme court held that ―[a]ctual notice to a

defendant, without proper service, is not sufficient to convey upon the court

jurisdiction to render default judgment against him‖ and that ―[a]bsent service,

waiver, or citation, mere knowledge of a pending suit does not place any duty on

a defendant to act.‖ Id. at 836–37. However, Appellants do not mention another

part of the Wilson opinion that expressly acknowledges that a defendant may

waive a complaint concerning defective service by conceding the issue. See id.

at 837. Although the Wilson court held that the defendant in that case had only

admitted receipt of the lawsuit rather than service of the lawsuit, it cited two

courts of appeals opinions—one of which is from this court—and discussed the

distinction between admitting receipt of a lawsuit (and thus having actual

knowledge of it) and admitting service of a lawsuit. See id. (citing First Nat’l Bank

v. Peterson, 709 S.W.2d 276, 280 (Tex. App.—Houston [14th Dist.] 1986, writ

ref‘d n.r.e.), and Hurst v. A.R.A. Mfg. Co., 555 S.W.2d 141, 142 (Tex. Civ. App.—

Fort Worth 1977, writ ref‘d n.r.e.)).

7
 In Peterson, the bank made statements in its appellate brief such as ―[t]he

writ was served on November 15‖ and ―[o]n the day the writ was served,‖ and the

bank‘s president stated in his motion for new trial affidavit, ―[O]n November 15,

1984, I was personally delivered a copy of Peterson‘s Application for Writ of

Garnishment after Judgment.‖ 709 S.W.2d at 280. The court held that the bank

judicially admitted proper service. Id.10

In this case, Appellants‘ motion for new trial began:

NOW COME Defendants, Metro A, LLC, Denar Restaurants,
LLC, Sun Holdings, LLC, Pop Restaurants, LLC, Golden
Restaurants, Inc., Firebrand Properties, LP, Corral Group, LP,
Kansas Corral, LLC, Sunny Corral Management, LLC, Guillermo
Perales, Fries [sic] Restaurant Management, LLC, TAG Corral, LLC,
and Indy [sic] Corral, LLC (collectively, ―Defendants‖), in the interest
of justice and fairness, and bring this Motion for New Trial. In
support thereof, Defendants show the following:

1. Plaintiff served Defendants on or about September 17 and 18,
2008.

Appellants‘ motion for new trial and attached exhibits included no other

statements or references to the fact or sufficiency of the service of the citations.

Unlike the scenario in Wilson, and very similar to the scenario in Peterson,

Appellants‘ motion for new trial made no distinction between mere receipt and

service of the lawsuit and did not otherwise challenge the validity of service.

Compare Wilson, 800 S.W.2d at 837, with Peterson, 709 S.W.2d at 280. Had

10
We similarly held in Hurst that Hurst judicially admitted proper service,
but we stated only that Hurst ―admitted in his brief that he was duly served and
filed no answer.‖ 555 S.W.2d at 142.

8
Appellants done so, they would not have judicially admitted proper service.11 Cf.

Smith v. U.S. Auto. Acceptance 1995-I, Inc., No. 05-98-00061-CV, 2000 WL

375249, at *2 (Tex. App.—Dallas Apr. 13, 2000, no pet.) (not designated for

publication) (considering context of alleged judicial admission, noting challenge

to service in motion for new trial and on appeal, and holding the appellant did not

admit being ―duly served‖). But because Appellants clearly and unequivocally

admitted being served on or about September 17 and 18, 2008, we hold that

Appellants judicially admitted and have waived their complaint concerning the

validity of service. See Wilson, 800 S.W.2d at 837; Peterson, 709 S.W.2d at

280; Hurst, 555 S.W.2d at 142. We overrule Non-Debtor Appellants‘ first issue

and Debtor Appellants‘ unnumbered issue raising this complaint.

B. Sufficiency of Polley’s Pleading

Debtor Appellants argue in their first issue and Non-Debtor Appellants

contend in their second issue that the trial court erred by granting default

judgment because Polley‘s original petition is substantively defective.

Specifically, Appellants argue that Polley‘s original petition does not allege facts

sufficient to provide fair notice of her claims and that the only cause of action

purportedly alleged—joint and several liability—is a damages apportionment

11
We recognize that a party may raise an allegation of defective service for
the first time on appeal. See, e.g., All Commercial Floors, Inc. v. Barton & Rasor,
97 S.W.3d 723, 725–26 (Tex. App.—Fort Worth 2003, no pet.) (holding appellant
could raise defective service for the first time on appeal). We note Appellants‘
failure to challenge service in their motion for new trial simply as context for the
clear and unequivocal nature of their statement concerning service.

9
theory rather than an independent cause of action recognized by Texas law.

A default judgment is erroneous if the petition does not give fair notice to

the defendant of the claim asserted. Paramount Pipe & Supply, Inc. v. Muhr, 749

S.W.2d 491, 494 (Tex. 1988). Rules of civil procedure 45 and 47 govern

pleadings and require them to give fair notice of the claim asserted. See id.; see

also Tex. R. Civ. P. 45, 47. Rule 45 requires ―plain and concise language‖ and

further provides, ―That an allegation be evidentiary or be of legal conclusion shall

not be grounds for objection when fair notice to the opponent is given by the

allegations as a whole.‖ Tex. R. Civ. P. 45. Rule 47 requires that an original

petition include ―a short statement of the cause of action sufficient to give fair

notice of the claim involved.‖ Tex. R. Civ. P. 47. The purpose of the fair notice

requirement is ―to provide the opposing party with sufficient information to enable

him to prepare a defense.‖ Paramount, 749 S.W.2d at 494. ―Pleadings are

sufficient if a cause of action or defense may be reasonably inferred from what is

specifically stated.‖ Spiers v. Maples, 970 S.W.2d 166, 169 (Tex. App.—Fort

Worth 1998, no pet.).

In Baker v. Charles, 746 S.W.2d 854, 855 (Tex. App.—Corpus Christi

1988, no writ), Baker contended that Charles‘s petition could not support the

judgment because it contained no specific allegation of negligence. As described

by the Baker court,

The petition state[d] that, on a specific date and at a specific place,
the defendant was operating a motor vehicle and ran into the
plaintiff, who was driving his vehicle, causing personal injuries to

10
 plaintiff and damage to his vehicle, that plaintiff‘s behavior was not a
contributing cause, but that ‗the occurrence in question was
proximately caused by the negligence, as that term is understood in
law, of the Defendant.‘

Id. Noting that a ―plaintiff does not have to set out specific acts of negligence in

his petition for it to support a default judgment,‖ the court held that the petition

provided fair notice of Charles‘s negligence claim. Id. at 856.

In this case, Polley‘s petition alleged that she was sexually assaulted by an

employee and supervisor for Metro Restaurants while she was also employed by

Metro Restaurants. Her petition further alleged that Appellants ―are jointly and

severally liable for the negligence of Metro Restaurants‖ and that she sought

damages from Appellants. Although Polley‘s petition clearly would have been

subject to special exceptions, it set forth sufficient information to provide

Appellants with fair notice that Polley sought to recover damages from Appellants

because they were legally responsible for Metro Restaurants‘s negligence. In

other words, the petition alleges a cause of action for negligence and that

Appellants were jointly and severally liable for that negligence. See id.; see also

Paramount, 749 S.W.2d at 494–95 (stating that plaintiff not required to ―set out in

his pleadings the evidence upon which he relies to establish his asserted cause

of action‖ and holding that pleading provided fair notice to principal by alleging

purported agent was ―acting for itself and for‖ principal despite not containing

specific allegations against principal). Thus, while joint and several liability is not

an independent cause of action, see K-Bar Servs., Inc. v. English, No. 03-05-

11
00076-CV, 2006 WL 903735, at *5 (Tex. App.—Austin Apr. 7, 2006, no pet.)

(mem. op.), Polley‘s petition alleged a cause of action for negligence, and we

hold that although Polley‘s petition would have been subject to special

exceptions, it pleaded a recognized cause of action against Appellants and

provided them with notice sufficient to prepare a defense. 12 We therefore

overrule Debtor Appellants‘ first issue and Non-Debtor Appellants‘ second issue.

C. Sufficiency of Evidence

Debtor Appellants also contend in an unnumbered issue that the trial court

erred by granting default judgment against them because Polley presented no

evidence of a causal link between their conduct and Polley‘s injuries.

When a default judgment is taken against the defendant, all allegations of

material fact set forth in the petition are deemed admitted except the amount of

unliquidated damages, and the default judgment conclusively establishes the

defendant‘s liability. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex.

1992); Morgan v. Compugraphic Corp., 675 S.W.2d 729, 731 (Tex. 1984). In

12
Non-Debtor Appellants also argue that the trial court erred by granting
default judgment because joint and several liability for more than one defendant
is impossible under civil practice and remedies code chapter 33, and Debtor
Appellants similarly argue that Polley cannot obtain a judgment for joint and
several liability in this case because she did not obtain a joint and several liability
finding in her original lawsuit against Metro Restaurants. But these contentions
relate to Appellants‘ meritorious defenses rather than the propriety of the trial
court‘s grant of default judgment based on the sufficiency of Polley‘s original
petition. See generally Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922, 925
(Tex. 2009) (citing Craddock, 133 S.W.2d at 126) (stating that defendant‘s
motion for new trial must set up a meritorious defense to be entitled to reversal of
default judgment).

12
order to determine unliquidated damages, the trial court must hear evidence

regarding damages. Tex. R. Civ. P. 243.

A ―plaintiff must [present evidence] establish[ing] two causal nexuses in

order to be entitled to recovery: (a) a causal nexus between the defendant‘s

conduct and the event sued upon; and (b) a causal nexus between the event

sued upon and the plaintiff‘s injuries.‖ Morgan, 675 S.W.2d at 731. ―From the

rule that a default judgment conclusively establishes the defendant‘s liability, it

follows that a default judgment admits that the defendant‘s conduct caused the

event upon which the plaintiff‘s suit is based.‖ Id. at 732.

Debtor Appellants contend that Polley offered no evidence at the default

hearing that they caused her to suffer any injuries or damages. Specifically,

Debtor Appellants argue that Polley‘s pleading does not contain any assertion

that Appellants ―in any way operated or controlled Metro Restaurants‖; ―had any

control or authority over [the perpetrator], much less the ability to prevent his

assault of [Polley] at the Burger King‖; or ―had any control or authority over

[Polley], much less the ability to require her to be subjected to [the perpetrator‘s]

assaults.‖ They further argue that Polley failed to present evidence at the default

hearing supporting any common law theory of joint and several liability. But

Debtor Appellants confuse the two types of causal nexuses required by Morgan,

and they attempt to change the event sued upon from the sexual assault to

Polley‘s alleged inability to collect the 2007 judgment.

13
 By failing to answer, Debtor Appellants admitted the factual allegations in

Polley‘s pleading and their liability for the event sued upon, i.e. the sexual

assault. See id. Polley was therefore not required to present evidence of Debtor

Appellants‘ common law liability. See id. Instead, Polley was required to present

evidence at the default hearing that the sexual assault caused her damages.

See id. at 732–33. This distinction is best described by the Morgan opinion itself,

in which the supreme court explained as follows:

Morgan alleged in her petition that Compugraphic negligently
installed a typesetting machine, or, alternatively, installed a defective
typesetting machine, and that as a result of this conduct chemical
fumes were released into Morgan‘s office, causing her a variety of
injuries. The event sued upon is thus the release of chemical fumes
into Morgan‘s office. By its default, Compugraphic admitted that its
negligence was a proximate cause of the release of chemical fumes
into Morgan‘s office. Compugraphic further admitted by its default
that a defect in the typesetting machine was a producing cause of
that event. However, Compugraphic‘s default did not establish that
the release of chemical fumes caused Morgan any injuries. At the
Rule 243 hearing, Morgan had the burden of presenting competent
evidence of a causal nexus between the release of chemical fumes
and her alleged injuries.

Id. Applying Morgan to this case, the event sued upon is Polley‘s sexual assault,

and Debtor Appellants‘ default admitted that their negligence was a proximate

cause of the sexual assault, just as Compugraphic admitted that its negligence

proximately caused the release of chemical fumes into Morgan‘s office. See id.

Polley was not required to present evidence that Debtor Appellants‘ negligence

proximately caused her sexual assault. See id.

14
 Debtor Appellants‘ default did not, however, admit that the sexual assault

caused Polley any injuries because ―a defaulting defendant does not admit that

the event sued upon caused any of plaintiff‘s alleged injuries,‖ and this rule ―is

entirely consistent with the rule that a judgment taken by default admits all

allegations of fact set out in the petition, except for the amount of damages.‖ Id.

at 732. Polley was therefore required to prove by competent evidence the

amount of her unliquidated damages and that the injury for which damages are

sought was proximately caused by the sexual assault. See id.; Paradigm Oil,

Inc. v. Retamco Operating, Inc., 242 S.W.3d 67, 72 (Tex. App.—San Antonio

2007, pet. denied).

Debtor Appellants argue that the 2007 judgment is no evidence of the

damages claimed in Polley‘s petition because Polley ―offered no testimony or

evidence that [Appellants] engaged in any conduct that directly or indirectly

resulted in her only claimed injury—her inability to collect the [2007] judgment‖

and because ―the mere existence of the [2007] judgment (which no one

dispute[s]) is no evidence of the causal nexus between the event sued upon

(‗joint and several‘ liability ‗for the negligence of Metro [Restaurants]‘) and

[Polley‘s] only alleged injury (her inability to collect the [2007] judgment).‖ But

Debtor Appellants again attempt to construe Polley‘s injury as her inability to

collect the 2007 judgment and omit that they admitted their liability for the sexual

assault by failing to answer. See Morgan, 675 S.W.2d at 732–33; Thomas v.

Martinez, 217 S.W.3d 680, 684 (Tex. App.—Dallas 2007, pet. struck) (―[A] default

15
judgment admits that the defendant‘s conduct caused the event upon which the

plaintiff‘s suit is based.‖). Polley‘s injury as alleged in her petition is the injury she

suffered as a result of the sexual assault, not her alleged inability to collect the

2007 judgment. Indeed, Polley‘s petition does not mention or allude to the 2007

judgment. Moreover, the 2007 judgment is some evidence of the damages

Polley suffered as a result of the sexual assault. We overrule Debtor Appellants‘

unnumbered issue challenging the sufficiency of the evidence at the default

hearing.

D. Notice of Default Proceeding

Debtor Appellants contend in part of their second issue, and Non-Debtor

Appellants argue in their fourth issue, that the trial court erred by granting the

default judgment because they were not provided notice of the default judgment

proceeding. Polley responds that Appellants failed to preserve this complaint for

appeal because they did not present it to the trial court in their motion for new

trial.

To preserve a complaint for appellate review, a party must have presented

to the trial court a timely request, objection, or motion that states the specific

grounds for the desired ruling, if they are not apparent from the context of the

request, objection, or motion. Tex. R. App. P. 33.1(a). If a party fails to do this,

error is not preserved, and the complaint is waived. Bushell v. Dean, 803 S.W.2d

711, 712 (Tex. 1991) (op. on reh‘g). This rule applies to a party‘s contentions

concerning the alleged lack of notice of default judgment proceedings and

16
alleged due process violations concerning the alleged lack of notice. See HBA

East, Ltd. v. JEA Boxing Co., Inc., 796 S.W.2d 534, 538–39 (Tex. App.—Houston

[1st Dist.] 1990, writ denied), cert. denied, 501 U.S. 1218 (1991) (holding

defendants waived challenge, including due process complaint, to lack of notice

of default judgment hearing by failing to urge the issue in a motion for new trial).

Here, Appellants filed a motion for new trial but did not contend in the

motion for new trial or at the hearing on the motion for new trial that they did not

receive notice of the default judgment proceeding. Thus, Appellants failed to

preserve this complaint for appellate review, and we overrule this part of Debtor

Appellants‘ second issue and all of Non-Debtor Appellants‘ fourth issue.

E. Appellants Allegedly Not in Existence in 2004

Non-Debtor Appellants contend in their third issue that the trial court erred

by granting default judgment against Sun Holdings, LLC and Sunny Corral

Management, LLC because neither entity existed in 2004 when Polley‘s sexual

assault occurred. However, Non-Debtor Appellants‘ entire argument on this

issue is contained within two paragraphs that do not set forth any citation to legal

authority. See Tex. R. App. P. 38.1(i); Fredonia State Bank v. Gen. Am. Life Ins.

Co., 881 S.W.2d 279, 284 (Tex. 1994) (discussing ―long standing rule‖ that issue

may be waived due to inadequate briefing). We overrule Non-Debtor Appellants‘

third issue as inadequately briefed.

17
 IV. Denial of Motion for New Trial

Debtor Appellants contend in the remainder of their second issue and Non-

Debtor Appellants contend in their fifth issue that the trial court abused its

discretion by overruling their motion for new trial because they submitted

evidence sufficient to satisfy each of the Craddock factors.

A. Applicable Law

A default judgment should be set aside and a new trial granted when the

defaulting party establishes that (1) the failure to appear was not intentional or

the result of conscious indifference, but was the result of an accident or mistake,

(2) the motion for new trial sets up a meritorious defense, and (3) granting the

motion will occasion no delay or otherwise injure the plaintiff. Dolgencorp, 288

S.W.3d at 925; Craddock, 133 S.W.2d at 126. We review a trial court‘s refusal to

grant a motion for new trial for abuse of discretion. Dolgencorp, 288 S.W.3d at

926; Cliff v. Huggins, 724 S.W.2d 778, 778 (Tex. 1987). When a defaulting party

moving for new trial meets all three elements of the Craddock test, then a trial

court abuses its discretion if it fails to grant a new trial. Dolgencorp, 288 S.W.3d

at 926; Old Republic Ins. Co. v. Scott, 873 S.W.2d 381, 382 (Tex. 1994). When

a party‘s proof in support of a motion for new trial under Craddock is not

controverted, the trial court may not disregard it. Fidelity & Guar. Ins. Co. v.

Drewery Constr. Co., 186 S.W.3d 571, 576 (Tex. 2006) (citing Dir., State

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

see Strackbein v. Prewitt, 671 S.W.2d 37, 38–39 (Tex. 1984) (stating that it is

18
―sufficient that the movant‘s motion and affidavits set forth facts which, if true,

would negate . . . consciously indifferent conduct‖).

―Intentional or conscious indifference for purposes of Craddock means

‗that the defendant knew it was sued but did not care.‘‖ Hampton-Vaughan

Funeral Home v. Briscoe, 327 S.W.3d 743, 747–48 (Tex. App.—Fort Worth

2010, no pet.) (quoting Fidelity, 186 S.W.3d at 576). A defendant‘s mere

negligence does not show conscious indifference. Id. at 748; see Levine v.

Shackelford, Melton & McKinley, L.L.P., 248 S.W.3d 166, 169 (Tex. 2008) (―[T]he

complete definition of conscious indifference amounts to more than mere

negligence.‖). A defendant must offer some excuse for the failure to appear at

trial, which need not necessarily be a good excuse. See Briscoe, 327 S.W.3d at

748; Sharpe v. Kilcoyne, 962 S.W.2d 697, 701 (Tex. App.—Fort Worth 1998, no

pet.) (―Even a slight excuse may justify a new trial.‖). In other words, a ―failure to

appear is not intentional or due to conscious indifference . . . merely because it is

deliberate; it must also be without adequate justification. Proof of such

justification—accident, mistake or other reasonable explanation—negates the

intent or conscious indifference for which reinstatement can be denied.‖ Smith v.

Babcock & Wilcox Constr. Co., 913 S.W.2d 467, 468 (Tex. 1995) (holding that

failure to appear at trial was not consciously indifferent when party‘s attorney

requested continuance and mistakenly understood continuance would be

granted). The party seeking a new trial has the burden to prove the lack of intent

19
or conscious indifference. Liberty Mut. Fire Ins. Co. v. Ybarra, 751 S.W.2d 615,

617–18 (Tex. App.—El Paso 1988, no writ).

B. Discussion

Appellants argue that they presented uncontroverted evidence that they

did not file an answer because their prior trial counsel mistakenly believed that

the case was subject to an automatic stay based on Metro Restaurants‘s

bankruptcy filing. Debtor Appellants further argue that their failure to file an

answer was the result of a calendaring error because their administrative

assistant incorrectly calendared the answer date as October 20, 2008, rather

than the actual answer date of October 13, 2008, before sending the citations to

outside counsel.

1. Motion for New Trial Testimony

Two witnesses testified at the hearing on Appellants‘ motion for new trial:

Desiree Hall and Richard Dobbyn. Appellants also offered, and the trial court

admitted, excerpts from the deposition of Luis Ibarguengoytia.13

Hall testified that she works for Appellant Sun Holdings, that Sun Holdings

is an administrative office for the other entities, that her duties include

calendaring legal matters and giving them to outside counsel, and that she

performs the same duty for all of Appellants. She testified that when she

13
Ibarguengoytia‘s deposition testimony related to Appellants‘ management
structure, not Appellants‘ failure to file an answer, and we therefore do not set it
out in the opinion.

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receives a citation, she reviews it, calendars the answer date, and gives it to

outside counsel with her notation of the calendar date for the answer. She

further testified that she received the citations around September 18, 2008; that

she put an answer date of October 20 on her calendar for all of Appellants; that

she sent the petitions to outside counsel; and that she mistakenly calendared an

answer date of October 20 rather than the correct answer date of October 13.

Hall testified that the calendaring error was her mistake and that it was not

intentional or the result of conscious indifference. Hall later clarified that she

could not say whether she did in fact provide outside counsel with an answer

date of October 20 but testified that it is her practice to inform outside counsel of

her calculated answer date.

On cross-examination, Hall testified that she sent the petitions to outside

counsel well in advance of October 15 and that she certainly did so before

October 13. Hall further testified that she defers to counsel on legal matters such

as ―making a decision regarding filing of answers,‖ that she did not make a

decision about filing answers, and that she could not speak for counsel as to why

an answer was not filed before December 3 (the date of the motion for new trial

hearing).14

14
Hall also signed an affidavit that was attached to Appellants‘ motion for
new trial. Hall‘s affidavit testimony contained much less detail but was consistent
with her testimony at the hearing.

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 Dobbyn testified that he is also employed by Sun Holdings and that he

oversees some of the litigation against the companies for which Sun Holdings

provides administrative services, including the instant lawsuit, by communicating

with outside counsel. Dobbyn also testified about each of Appellants and the

nature of their businesses, and he explained that Appellants are not related to

Metro Restaurants. On cross-examination, Dobbyn testified that he learned of

the default judgment in this case on October 20. In that regard, the trial court

stated at the hearing that it would ―take judicial notice of the file that there was no

answer filed on the 20th.‖

2. Bankruptcy Stay

As mentioned above, all Appellants contend that their failure to file an

answer was not intentional or a result of conscious indifference because their

prior counsel believed that Metro Restaurants‘s bankruptcy stayed this litigation,

even though Metro Restaurants is not a party to this case. However, Appellants‘

prior counsel did not testify at the motion for new trial hearing and did not provide

an affidavit in support of the motion for new trial, nor did any of Appellants‘

witnesses testify that Appellants failed to file an answer due to their or their

counsel‘s belief that Metro Restaurants‘s bankruptcy stayed the proceedings in

this lawsuit. We hold that the trial court did not abuse its discretion to the extent

that it determined that this alleged excuse for not filing an answer was not

supported by sufficient evidence. We therefore overrule this portion of Debtor

Appellants‘ second issue and all of Non-Debtor Appellants‘ fifth issue.

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 3. Calendaring Error

Debtor Appellants also contend that Hall‘s calendaring error negates their

conscious indifference. In this regard, the trial court asked at the hearing how

Appellants were going to show that Hall‘s calendaring error was the cause of the

failure to answer given that Hall testified that she delivered the citation to outside

counsel and outside counsel filed the notice of Metro Restaurants‘s bankruptcy

before the actual answer date of October 13. The trial court further stated that it

believed Hall‘s ―mistake would have to be a cause of the late filing‖ and that it

was concerned about ―piling [an] inference on an inference‖ by assuming that

Appellants‘ prior counsel failed to file an answer because he relied on Hall‘s

calendaring error. In addition to the trial court‘s express comments, we note that

the trial court took judicial notice of the absence of an answer on October 20, the

date that Hall testified she calculated as the answer date; that Appellants‘ prior

counsel did not testify at the hearing; and that Appellants therefore offered no

evidence that their prior counsel relied on Hall‘s calendaring error.

We have held that ―unbelievable and internally inconsistent excuses‖

cannot meet an appellant‘s burden of proof to show the lack of conscious

indifference. Folsom Invs., Inc. v. Troutz, 632 S.W.2d 872, 875 (Tex. App.—Fort

Worth 1982, writ ref‘d n.r.e.) (citing Munson v. State, 576 S.W.2d 440, 442 (Tex.

Civ. App.—Austin 1978, writ ref‘d n.r.e.)). In other words, while the cases cited

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above state that a trial court may not disregard uncontroverted evidence from a

Craddock movant, the trial court may certainly compare that evidence to other

evidence submitted by the movant. See id. In this case, we conclude that it was

not arbitrary or unreasonable for the trial court to conclude that Appellants‘

excuses for not filing an answer were either not supported by sufficient evidence

or were internally inconsistent. See Munson, 576 S.W.2d at 442 (―[T]he trial

judge is not required to grant a new trial merely upon the advancement of an

excuse, no matter how unbelievable.‖); see also Titan Indem. Co. v. Old S. Ins.

Group, Inc., 221 S.W.3d 703, 711 (Tex. App.—San Antonio 2006, no pet.) (―[T]he

trial court is to determine credibility and . . . we cannot substitute our opinion for

the trial court‘s when there is evidentiary support for the trial court‘s conclusion.‖);

Martinez v. Martinez, 157 S.W.3d 467, 470 (Tex. App.—Houston [14th Dist.]

2004, no pet.) (stating that in a Craddock review, the trial court is the ―sole judge

of the credibility of the witnesses and the weight to be given to their testimony‖).

Because the trial court could have reasonably determined that Appellants‘

reasons for not filing an answer were not supported by sufficient evidence or

were not credible, we hold that the trial court could also have reasonably found

that Appellants‘ failure to file an answer was intentional or consciously indifferent,

rather than negligent or mistaken. See Briscoe, 327 S.W.3d at 746–47.

Because we hold that the trial court did not abuse its discretion concerning the

first Craddock element, we need not address the other two Craddock elements.

See Tex. R. App. P. 47.1; Cont'l Cas. Co. v. Davilla, 139 S.W.3d 374, 382 (Tex.

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App.—Fort Worth 2004, pet. denied). We overrule the remainder of Debtor

Appellants‘ second issue.

V. Conclusion

Having overruled each of the Debtor Appellants‘ and Non-Debtor

Appellants‘ issues, we affirm the trial court‘s judgment.

ANNE GARDNER
JUSTICE

PANEL: GARDNER, WALKER, and MCCOY, JJ.

DELIVERED: September 22, 2011

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