Jason Felt, Canary Financial, Inc., Jonathan Wassserberg, and Wasserberg Investments, Inc. v. Comerica Bank
401 S.W.3d 802
Tex. App.2013Background
- Waterhill defaulted on a $5 million loan to Comerica secured by real property; Felt and Wasserberg signed guaranties; Waterhill, Canary, and WII were defendants in a deficiency suit; trial court rendered no-answer default against WII and post-answer defaults against others; judgments held all four defendants jointly and severally liable for damages and attorney’s fees; Felt and Canary moved for new trial asserting lack of notice, Wasserberg adopted, but no hearing occurred and motions were overruled by operation of law.
- The record shows Felt had answered on his own and Canary’s behalf, but Wasserberg, though pro se, did not have counsel representation for WII; Wasserberg’s motion to adopt did not include a proof of lack of notice for WII.
- Appeal was filed after the notice of judgment; the court abated to determine when appellants first learned of the judgment under Rule 306a, then held May 19, 2011 as the notice date, establishing August 17, 2011 as the deadline to file a notice of appeal.
- Appellants sought reversal on due-process grounds for lack of notice of the trial setting; Craddock factors govern setting aside a default, with burden shifted to plaintiff after lack of notice is shown.
- The court held Wasserberg Investments, Inc. failed to preserve its complaint; Felt’s and Canary’s notices were presumed and not proven to be lacking; Felt’s motion failed to show lack of notice because he admitted knowledge of a trial setting and had actually filed an answer; Canary had no independent assertion of lack of notice; Wasserberg’s separate assertion lacked proof of lack of notice.
- The appellate court affirmed the trial court’s judgment against all defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the post-answer default judgments violated due-process due to lack of notice | Felt, Canary argued lack of notice of trial setting. | Defendants argued lack of notice or improper notice affected due process. | Affirmed; presumption of notice upheld; lack of proof of lack of notice failed. |
| Whether Wasserberg, via non-attorney representation, preserved error for WII | Wasserberg adopted Felt/Canary motion for new trial. | Corporation represented by non-attorney cannot preserve error. | Affirmed; WII’s defense not preserved; non-attorney representation not authorized. |
| Whether Felt and Canary satisfied Craddock factors to set aside default | Craddock factors apply; lack of notice claimed. | Motion insufficient; Felt had notice by filing answer; Canary similarly lacking basis. | Affirmed; lacked proof of lack of notice and no timely hearing. |
Key Cases Cited
- Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124 (Tex. 1939) (three Craddock factors for setting aside a default judgment)
- In re S.M.V., 287 S.W.3d 435 (Tex. App.—Dallas 2009) (restricts consideration to evidence before trial court when ruling)
- Campsey v. Campsey, 111 S.W.3d 767 (Tex. App.—Fort Worth 2003) (presumption of notice; burden to show lack of notice)
- Verburgt v. Dorner, 959 S.W.2d 615 (Tex. 1997) (procedural extension and notice issues timeline)
- Miller v. Greenpark Surgery Ctr. Assocs., Ltd., 974 S.W.2d 805 (Tex. App.—Houston [14th Dist.] 1998) (necessity of evidentiary support for lack of notice)
- Shamrock Roofing Supply, Inc. v. Mercantile Nat’l Bank at Dallas, 703 S.W.2d 356 (Tex. App.—Dallas 1985) (hearing required to exercise discretionary review on new trial)