Johnny Peevy v. Roy Gene Butler

ACCEPTED
12-15-00134-CV
TWELFTH COURT OF APPEALS
TYLER, TEXAS
9/17/2015 2:24:57 PM
Pam Estes
CLERK

NO. 12-15-00134-CV

RECEIVED IN
IN THE COURT OF APPEALS 12th COURT OF APPEALS
TYLER, TEXAS
12TH DISTRICT 9/17/2015 2:24:57 PM
PAM ESTES
TYLER, TEXAS Clerk

JOHNNY PEEVY

Appellant

VS. 9/17/2015

ROY GENE BUTLER

Appellee

ON APPEAL FROM THE 241ST JUDICIAL DISTRICT COURT OF

SMITH COUNTY, TEXAS, TRIAL COURT NO. 14-1354-C

BRIEF OF APPELLANT

JOHN F. BERRY
State Bar No. 02236650
BRIAN E. RICHARDSON
State Bar No. 24068651

JOHN F. BERRY, P.C.
100 Independence Place, Suite 400
Tyler, Texas 75703-1384
(903) 561-4200
(903) 561-8922 (Fax)
jfberry@suddenlinkmail.com

ORAL ARGUMENT WAIVED
 IDENTITY OF PARTIES AND COUNSEL

The following is a complete list of all parties to the trial court’s final

judgment, as well as the names and addresses of all trial and appellate counsel.

PARTIES: COUNSEL:

Plaintiff:
Roy Gene Butler Ronnie Horsley
1909 N. 24th West Ave. 231 South College
Tulsa, Oklahoma 74127 Tyler, Texas 75702
Stephen Hubbard
605 S. Broadway
Tyler, Texas 75701

Defendant:
Johnny Peevy John F. Berry
11669 E. Montana Place 100 Independence Place
Aurora, Colorado 80012 Suite 400
Tyler, Texas 75703

i
 TABLE OF CONTENTS

INDEX OF AUTHORITIES iii

STATEMENT OF THE CASE 1

ISSUES PRESENTED 1

STATEMENT OF FACTS 2

SUMMARY OF THE ARGUMENT 3

ARGUMENT 4

CONCLUSION 9

PRAYER 9

APPENDIX 12

A. JUDGMENT 13

B. SECTION 37, TEX. CIV. PRAC. & REM.S CODE 16

C. SECTION 304.003, TEXAS FINANCE CODE 22

D. RULE 26.1, TEXAS RULES OF CIVIL PROCEDURE 24

E. RULE 30, TEXAS RULES OF APPELLATE PROCEDURE 26

F. RULE 243, TEXAS RULES OF CIVIL PROCEDURE 27

G. TEXAS CREDIT LETTER 28

ii
INDEX OF AUTHORITIES

Statutes

Tex. Civ. Prac. & Rem. Code §37 _________________________________ 1, 6

Tex. Fin. Code §304.003 ____________________________________ 2, 3, 8, 9

Rules

Tex. R. App. P. 26.1 ___________________________________________ 4, 5

Tex. R. App. P. 30 ______________________________________________ 4

Tex. R. Civ. P. 243 ______________________________________________ 6

Cases

Vazquez v. Vazquez,

292 S.W.3d 80 (Tex. App.—Houston [14th Dist.] 2007, no pet.) _________ 4

Argyle Mech., Inc. v. Unigus Steel, Inc.,

156 S.W.3d 685 (Tex. App.—Dallas 2005, no pet.) __________________ 5, 6

Holt Atherton Indus., Inc. v. Heine,

835 S.W.2d 80 (Tex. 1992) _____________________________________ 5, 6

Arenivar v. Providian Nat'l Bank,

23 S.W.3d 496 (Tex. App.—Amarillo 2000, no pet.) _________________ 5, 6

First Nat'l Bank v. Shockley,

iii
 663 S.W.2d 685 (Tex. App.—Corpus Christi 1983, no writ) _____________ 6

Dawson v. Briggs,

107 S.W.3d 739 (Tex. App.—Fort Worth 2003, no pet.) _______________ 6

Morgan v. Compugraphic Corp.,

675 S.W.2d 729 (Tex. 1984) ______________________________________ 6

iv
 STATEMENT OF THE CASE

Appellee, Roy Gene Butler (“Butler”) sued Appellant, Johnny Peevy

(“Peevy”) in an action to quiet title on real property and requested a declaratory

judgment pursuant to the Texas Civil Practices and Remedies Code §37.

Butler filed his Original Petition on May 21, 2014 (Clerk’s Record 1-4).

Appellant was served the Original Petition on July 11, 2014 (Clerk’s Record 5).

The Motion for Default Judgment was filed on November 13, 2014 (Clerk’s

Record 6-12). The Trial Court entered the Default Judgment on November 21,

2014 (Clerk’s Record 13-15) without holding a hearing (Clerk’s Record 34).

The Default Judgment contained an award of attorney’s fees in the amount of

$7,000.00, post-judgment interest of ten percent (10%) per annum, and costs of

court. Appellant filed his Notice of Restricted Appeal within six months of the

entry of the Default Judgment and accordingly, perfected this appeal.

ISSUES PRESENTED

Issue No. 1: Whether the Default Judgment entered in favor of Butler against

Peevy should be reversed and remanded for a new trial with regard to the

award of attorney’s fees due to the record reflecting no evidence as to the

amount of reasonable and necessary attorney’s fees.

Issue No. 2: Whether the Default Judgment entered in favor of Butler against

Peevy should be reversed and rendered with regard to the award of post-

1
judgment interest at a rate of ten percent (10%) per annum and revised to five

percent (5%) per annum.

STATEMENT OF FACTS

Peevy was the victim of a Default Judgment taken by Butler. Butler filed

his Original Petition against Peevy on May 21, 2014 (Clerk’s Record 1-4),

upon which Butler’s Default Judgment is based. The Default Judgment was

signed on November 21, 2014 (Clerk’s Record 13-15). The Default Judgment

contained an award of attorney’s fees in the amount of $7,000.00, post-

judgment interest of ten percent (10%) per annum, and costs of court. The

Default Judgment states “At the hearing on this cause…” (Clerk’s Record 13)

which would indicate that a hearing was held. However, the Court never

conducted an evidentiary hearing to receive evidence of reasonable and

necessary attorney’s fees. The Docket Sheet (Clerk’s Record 34) does not note

that a hearing was held and does not identify a court reporter. In fact, no

hearing was held and no evidence presented to the Trial Court to support the

judgment for attorney’s fees.

Secondly, the award of post-judgment interest at the rate of ten percent

(10%) interest per annum is double the correct interest rate of five percent (5%)

per annum pursuant to a correct application of Tex. Fin. Code §304.003 for the

time the Default Judgment was entered. Peevy filed his notice of restricted

2
appeal within the six-month deadline (Clerk’s Record 19-20), bringing the

Default Judgment into review by this Court. This being a default judgment,

Peevy did not participate at the hearing (which never took place), and the

failure of the Docket Sheet (Clerk’s Record 34) to note the identity of the Court

Reporter or the existence of a hearing establishes the absence of a hearing on

the face of the record.

SUMMARY OF THE ARGUMENT

The Trial Court erroneously granted a default judgment in favor of

Butler against Peevy for attorney’s fees without conducting an evidentiary

hearing to determine the amount of reasonable and necessary attorney fees.

Reasonable and necessary attorney’s fees are unliquidated damages, and a no-

answer default judgment still requires a judge to receive evidence on the

amount of unliquidated damages before they can be awarded. When a no

evidence point is sustained as to unliquidated damages which results from a no-

answer default, the appropriate disposition is to remand for a new trial on the

issue of the unliquidated damages.

Secondly, the trial court erroneously granted an award of post-judgment

interest at the rate of ten percent (10%) per annum. A correct application of

Tex. Fin. Code §304.003 for November 21, 2014, which is the entry date of the

Default Judgment, is five percent (5%). Tex. Fin. Code §304.003(c)(2) should

3
have been applied to the amount of the interest charged because on November

21, 2014, the prime rate as published by the Board of Governors of the Federal

Reserve System was less than five percent (5%). The Appendix contains the

Texas Credit Letter published by the Texas Office of Consumer Credit

Commissioner which shows the Judgment Rate for November 21, 2014 was

five percent (5%).

ARGUMENT

A party filing a restricted appeal must demonstrate the following: (1)

initiation of an appeal within six months after the judgment was rendered; (2)

the appellant was a party to the suit; (3) the appellant did not participate in the

hearing that resulted in the judgment complained of; (4) the appellant did not

timely file a post-judgment motion, request for findings of fact and conclusions

of law, or file a notice of appeal within the time permitted by Rule 26.1(c) of

the Texas Rules of Appellate Procedure; and (5) error appears on the face of

the record. Tex. R. App. P. 30; Vazquez v. Vazquez, 292 S.W.3d 80, 83

(Tex.App.—Houston [14th Dist.] 2007, no pet.). “[T]he face of the record

consists of all the papers on file in the appeal, including the reporter’s record.”

Vasquez, 292 S.W.3d at 83. In this case, there was no hearing, hence there was

no reporter, hence there is no reporter’s record.

4
 The Default Judgment was signed and filed on November 21, 2014

(Clerk’s Record 13-15), and the Notice of Restricted Appeal was filed on May

20, 2015 (Clerk’s Record 19-20). As a result, the initiation of the appeal was

within six months of the judgment. Peevy was the Defendant in the lawsuit, so

he was a party to the suit. (Clerk’s Record 1-4). The Docket Sheet (Clerk’s

Record 34) is silent as to the identity of a Court Reporter and the actual

occurrence of a hearing at the time the Default Judgment was signed, so Peevy

did not participate in any hearing which resulted in the judgment complained.

In fact, there was no such hearing. Peevy did not timely file any post-judgment

motion, request for findings of fact and conclusions of law, or file a notice of

appeal within the time permitted by Rule 26.1(c), as shown by the absence of

these in the Clerk’s Record.

With regard to the fifth element, the face of the record shows no

evidence regarding the amount of reasonable and necessary attorney’s fees.

“When a default judgment is taken against non-answering defendants on an

unliquidated claim, all allegations of fact contained in the petition are deemed

admitted, except for the amount of damages.” Argyle Mech., Inc. v. Unigus

Steel, Inc., 156 S.W.3d 685, 687 (Tex. App.—Dallas 2005, no pet.) (citing Holt

Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992); Arenivar v.

Providian Nat’l Bank, 23 S.W.3d 496, 497 (Tex. App.—Amarillo 2000, no

5
pet.)). “When damages are unliquidated, the judge entering the default

judgment must hear evidence on the damages.” Argyle Mech., 156 S.W.3d at

687 (citing Tex. R. Civ. P. 243; Holt Atherton Indus., 835 S.W.2d at 83.) “A

default judgment…does not establish allegations pertaining to unliquidated

damages.” First Nat’l Bank v. Shockley, 663 S.W.2d 685, 689 (Tex. App.—

Corpus Christi 1983, no writ). “The legal and factual sufficiency of evidentiary

support for unliquidated damages may be challenged on appeal from a no-

answer default judgment.” Argyle Mech., 156 S.W.3d at 687 (citing Arenivar,

23 S.W.3d at 498; Dawson v. Briggs, 107 S.W.3d 739, 748 (Tex. App.—Fort

Worth 2003, no pet.)). “If a no-evidence point is sustained as to unliquidated

damages resulting from a no-answer default judgment, the appropriate

disposition is to remand for a new trial on the issue of unliquidated damages.”

Argyle Mech., 156 S.W.3d at 687 (citing Holt Atherton Indus., 835 S.W.2d at

86; Morgan v. Compugraphic Corp., 675 S.W.2d 729, 734 (Tex. 1984)).

“Unliquidated claims include damages for personal injuries, lost profits,

consequential damages, exemplary damages, and reasonable attorney’s fees.”

First Nat’l Bank, 663 S.W.2d at 689 (emphasis added).

In a declaratory judgment proceeding, a court “may award costs and

reasonable and necessary attorney’s fees as are equitable and just.” Tex. Civ.

Prac. & Rem. Code §37.009. The face of the record contains no evidence to

6
support an award of any attorney’s fees. With no evidence to support the

amount of attorney’s fees, the award for attorney’s fees must be reversed and

remanded for a trial on that issue.

A close inspection of the record indicates no hearing was held to support

the amount of attorney’s fees. The Docket Sheet (Clerk’s Record 34) clearly

fails to indicate the identity of a Court Reporter or the existence of a hearing.

Ordinarily, the Docket Sheet would show the identity of the Court Reporter and

note the date of the hearing. By the absence of this information, it is reasonable

and appropriate to infer that there was, in fact, no hearing. The Default

Judgment states in its opening sentence “At the hearing on this cause,…"

(Clerk’s Record 13). The record also contains the proposed Default Judgment

submitted by Stephen Hubbard, attorney for Roy Gene Butler (Clerk’s Record

10 – 12). Neither the proposed Default Judgment, the Nonmilitary Affidavit

(Clerk’s Record 8), nor the Certificate of Last Known Mailing Address

(Clerk’s Record 9) reflect file marks. These documents were attached to and

submitted with the Motion for Default Judgment (Clerk’s Record 6-7), filed on

November 13, 2014. On its face, the Motion for Default Judgment alleges a

suit against a different Defendant, Girish Patel. The necessary allegations or

facts to support the Default Judgment pursuant to the Motion are incorrect.

They apply to persons not parties to this suit. From the record, it is apparent

7
that the Plaintiff filed a Motion for Default Judgment, misidentifying the

Defendant, accompanied by the Nonmilitary Affidavit, Plaintiff’s Certificate of

Last Known Mailing Address and proposed Default Judgment (Clerk’s Record

6-12). Later, on November 21, 2014, the Trial Court signed the Default

Judgment, but it did not hold a hearing, nor did Plaintiff request a hearing from

the face of the record (Clerk’s Record 7—citing the prayer contained in the

Motion for Default Judgment which contains no request that a hearing be held).

The face of the record clearly shows no hearing was actually held.

Secondly, the Default Judgment (Clerk’s Record 13-15) contains an

award of post-judgment interest of ten percent (10%) per annum. That amount

is double the correct interest rate of five percent (5%) pursuant to a correct

application of Tex. Fin. Code §304.003 for the time the Default Judgment was

awarded. Tex. Fin. Code §304.003(c)(2) states that a money judgment earns

post-judgment interest at a rate of “five percent a year if the prime rate as

published by the Board of Governors of the Federal Reserve System…is less

than five percent….” The judgment interest rate is published weekly by the

Texas Office of Consumer Credit Commissioner. For the month of November

2014, the prime rate as published by the Board of Governors of the Federal

Reserve System was less than five percent (5%). As a result, the Default

8
Judgment should be reversed and rendered to change the award of post-

judgment interest to accrue at the rate of five percent (5%) per annum.

CONCLUSION

It is clear that the face of the record contains no evidence of the amount

of reasonable and necessary attorney’s fees. Butler failed to meet his burden

and failed to provide any evidence of the amount of reasonable and necessary

attorney’s fees to the Trial Court. As a result, the Default Judgment should be

reversed and remanded for a new trial on this issue.

Secondly, the Default Judgment erroneously awarded post-judgment

interest at the rate of ten percent (10%) per annum. A correct application of

Tex. Fin. Code §304.003 for November 21, 2014 would yield post-judgment

interest at the rate of five percent (5%) per annum. Accordingly, the Default

Judgment should be reversed and rendered with regard to the award of post-

judgment interest changing the post-judgment interest rate from ten percent

(10%) to five percent (5%) per annum on the amount of damages awarded.

PRAYER

Wherefore premises considered, Appellant, Johnny Peevy, prays that the

judgment granted against him be reversed and rendered with respect to post-

judgment interest and reversed and remanded in part to the trial court on the

issue of attorney’s fees. Appellant prays for general relief.

9
Respectfully submitted,

JOHN F. BERRY, P.C.
100 Independence Place, Suite 400
Tyler, Texas 75703
(903) 561-4200
FAX: (903) 561-8922
jfberry@suddenlinkmail.com

/s/ John F. Berry
By: _________________________
John F. Berry
State Bar No. 02236650
Brian E. Richardson
State Bar No. 24068651

10
 CERTIFICATE OF SERVICE

17th day of September, 2015, a copy of the
I hereby certify that on the ____

foregoing was mailed by certified mail, return receipt requested, to the

following:

Ronnie Horsely
P O Box 7017
Tyler, Texas 75711

Stephen Hubbard
605 S. Broadway
Tyler, Texas 75701

/s/ John F. Berry
___________________________________
John F. Berry

11
APPENDIX

12
 ,' 12014
CAUSE NO. 14-1354-C

ROY GEt~E BUTLER §
Plaintiff, §
§
v. §
§
JOHNNY PEEVY §
Defendant. § OF SMITH COUNTY, TEXAS

DEFAULT JUDG1\1:El"';T

At the hearing on this cause, Plaintiff appeared through his attorney of record.
Defendant, Joh21ny Peevy, although duly cited to appear and a.11s\ver herein, has failed to file a."!.
answer within the lime allowed by law.
The Court has considered the pleadings and records on file in this cau~e and the evidence

and is of the opinion that judgment should be rendered for Plaintiff.
The Comt FLNT.lS the foiiowing:
a. Thaddeus Mcclendon purchased the B Lafferty survey, tract 21 located in Smith
County, Texas in 1914;
b. Thaddeus McClendon died in 1934 leaving a \Vife and 3 children, !lamely L.E.,
Raz and Trula McClendon;
c. L.E. Mcclendon had six (6) children, namely Gertha Mae McCiendon Butler,

Geraldine McClendon Peevy, Alexander Edalgo McCkndon, James Phillip
McClendon, Jo Ann McClendon Cole and Marilyn Jean McClendon Evans.
d. By intestate succession, Geraldine McC!endon Peevy inherited her undivided
interest in the property trom her father L.E. ~.1cClendon after his death. Said
interest is separate property of Geraldine McClendon Peevy.

Bi1tler v. Peevy
Smith County Tt:xa;;
Default Judgment Page -1-

13
 e. Geraldine McC!endon Peevy married Melvin Peevy. Prior to her marriage,
Geraldine Mcf:!cndon Peevy li~ad a daughter, namely rvraxine 1'-.1cClendon
Wallace.
f. The child of Geraldine Peevy, Maxine McClendon Wallace, died prior to
Geraldine Peevy. Maxine McClendon Wallace left two children at her death,
namely, Daisha Wallace and Armissie Wallace.
c. Geraldine Wallace Peevy died, leaving no will but she had a spouse, Melvin
Pee'°ry a.a~..d the property hi questions was separate property of Geraldine
McClendon Peevy.
f. The heirs of Geraldine McClendon Peevy are Melvin Peevy, Armissie Wallace
and Daisha Wallace.
g. Melvin Peevy died in 2009 in Denver, Colorado.
h. Roy Gene Butler purchased the interest ofDaisha Wallace and Arrnissie Wallace,
who are the heirs of Geraldine IvkC!endon Peevy.

II IS accordingly ORDERED, ADJUDGED and RENDERED that Roy Gene Butler,

Plaintiff, is judicially declared the owner of the following prope1ty- in Smith County, Texas as
described as the B Lafferty survey, tract 21 located [n Smith County; Texas;

II IS ORDERED and DECLARED that Roy Gene Butler is the sole owner of the B
Lafferty sur-vey, tract 2 i iocaicd in Smith County, Texas and Johnny Peevy is divested of any
right, title or claim to said prope1ty.

IT IS FUR1'HE.R ORDERED that Roy Gene Butler he granted attorney fees [n this matter in
the amount of Seven Thousand Dollars ($7,000.00) as of the date of judgement with interest of

3t1tli:r v. Peevy
Smilh Counly Tc:-.:as
[).:faul1 Judgme1ll Page -2-

14
10% per anum; and costs of court.

Plaintiff shall have all writs of execution and other process necessary to enforce this judgment.

This judgment finally disposes of all parties and all claims and is appealable.
I

SIGNED on C\o "2\"'()VJ)( ci) Id\.C ~ 1
)

/
// /, /
d
I'/ -
/
//

~JU/L