While writing about the five things the Court did today, I neglected to mention that it also issued two opinions related to actions it did not take. Both were decisions related to the Court’s denial of a pending motion for rehearing of a petition.
One of these was a per curiam decision from the Court that expressly rejected the court of appeals’s formulation of the test for when a trial court should grant a motion for new trial to set aside a default judgment. Nonetheless, the Court denied the petition for review, explaining that the court of appeals — although it stated the test incorrectly — had applied it correctly. Details follow the break.
Levine v. Shackelford, Melton & McKinley, L.L.P., No. 06-0533. Per curiam decision
In this case, we consider whether the court of appeals applied the correct standard in affirming a trial courtâ€™s denial of a motion to set aside a default judgment. A three-part test determines whether a court should grant a motion for new trial to set aside a proper default judgment. Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex. 1939). The first part of the Craddock test requires that â€œthe failure of the defendant to answer before judgment [i]s not intentional, or the result of conscious indifference on his part, but [i]s due to a mistake or an accident.â€ Id. When applying this part of the Craddock test, the court of appeals defined â€œconscious indifferenceâ€ in terms of â€œa person of reasonable sensibilities under the same or similar circumstances. The court of appeals held that the trial court did not abuse its discretion in denying the motion for new trial, and affirmed the trial courtâ€™s denial. Though the court of appeals articulated the â€œconscious indifferenceâ€ requirement of the Craddock test incorrectly, it properly applied the test. We denied the petition for review, and now deny the motion for rehearing, but we write here to clarify the standard that the court of appeals used.
What standard should the court of appeals have articulated?
In applying the Craddock test to this case, the court of appeals examined the evidence and concluded that it â€œshowed a pattern of conduct that disregarded deadlines, promises, procedures, and simple steps that a person of reasonable sensibilities would have taken to ensure that the answer was properly and timely filed.â€ The proper standard, however is not a negligence standard. â€œ[T]he Craddock standard is one of intentional or conscious indifferenceâ€”that the defendant knew it was sued but did not care.â€ Fid. & Guar. Ins. Co. v. Drewery Constr. Co., 186 S.W.3d 571, 575â€“76 (Tex. 2006) (per curiam) (emphasis added).
The other opinion on today’s order list was a dissent by Justice Willett from the Court’s denial of rehearing in an aviation-insurance case.
AIG Aviation (Texas), Inc. v. Holt Helicopters, Inc., 06-0484. Dissent from denial of rehearing Justice Willett would have granted the petition for review to reexamine Puckett v. U.S. Fire Insurance Co., 678 S.W.2d 936 (Tex. 1984), in which the Court — in his description — “engrafted a causal-connection requirement into the policy, requiring the insurer to show that the insuredâ€™s breach actually caused the damage or accident.”
Justice Willett’s dissent to this denial of rehearing echoes his dissent from the Court’s decision today in PAJ, Inc. v. The Hanover Insurance Co., written up in this previous post.