Roger Tarrant, Denise Tarrant, Justin Tarrant and the D.A. Tarrant Irrevocable Trust v. Daniel Scarbrough
12-17-00125-CV
| Tex. App. | Jul 31, 2017Background
- Plaintiff Daniel Scarbrough obtained a prior money judgment against Roger and Denise Tarrant and then sued to set aside a November 21, 2014 conveyance of Roger’s undivided interest in real property to their son Justin as a fraudulent transfer under the Texas Uniform Fraudulent Transfer Act (TUFTA).
- The warranty deed recited substantial consideration from Justin: cash, a $52,325 promissory note secured by vendor’s lien and deed of trust, assumption of two prior liens (roughly $55,000 total), and indemnities; a family trust (D.A. Tarrant Irrevocable Trust) provided part of the loan.
- The defendants had answered the suit; a bench trial was set for January 6, 2017 at 11:00 a.m. Neither side’s counsel appeared at 11:00; the court reset a “prove-up” hearing the same day at 1:30 p.m., at which only Scarbrough (and his counsel by telephone) participated and the court entered a post-answer default judgment setting aside the conveyance and awarding attorney’s fees.
- At the 1:30 prove-up the only liability evidence consisted of the prior judgment, the deed and deed-of-trust documents, interrogatory responses indicating limited assets, and Scarbrough’s testimony consisting largely of his conclusory positions and beliefs (e.g., that the transfer was fraudulent, that the trust was alter ego, that defendants conspired).
- Defendants moved for new trial asserting lack of notice of the 1:30 prove-up and inadequate proof of service of the initial 11:00 setting; the motion was overruled by operation of law. Appellants now seek reversal and remand on grounds of evidentiary insufficiency and due-process notice defects.
Issues
| Issue | Plaintiff's Argument (Scarbrough) | Defendant's Argument (Tarrant) | Held (Appellants' position / requested relief) |
|---|---|---|---|
| 1. Sufficiency of evidence for fraudulent-transfer elements under TUFTA | Scarbrough contends the timing, insider transfer, knowledge of claim, and limited assets support finding intent to hinder or lack of reasonably equivalent value | Tarrants contend plaintiff produced only conclusory testimony and documentary evidence showing actual consideration; no probative evidence of intent or lack of equivalent value | Trial proof was legally and factually insufficient; judgment should be reversed and remanded for new trial. |
| 2. Admissibility/weight of plaintiff’s testimony of beliefs and positions | Scarbrough relies on his testimony asserting belief/position about intent, alter ego, conspiracy | Tarrants argue subjective beliefs and conclusory positions are not probative and cannot sustain a post-answer default judgment | Court should not credit conclusory beliefs; such testimony is non‑probative and cannot support implied findings. |
| 3. Due process — notice of rescheduled prove-up hearing | Scarbrough effectively proceeded at the rescheduled hearing (by phone) and the court recited “due notice” in judgment | Tarrants assert they received no notice of the 1:30 prove-up and had no opportunity to appear; initial 11:00 notice is not proof of notice of the rescheduled merits hearing | Lack of reasonable notice of the actual merits hearing violated due process and requires a new trial without further Craddock showing. |
| 4. Proof that initial setting notice was sent | Scarbrough relies on clerk’s file notation of a “Notice of Setting” (CC: counsel) and judgment recital | Tarrants dispute receipt and point to lack of certificate/return/affidavit proving service; plaintiff has burden to prove notice when contested | The record fails to prove notice was sent; absence of proof negates any presumption of receipt and supports reversal/remand. |
Key Cases Cited
- In re $475,001.16, 96 S.W.3d 625 (Tex. App.—Houston [1st Dist.] 2002) (no presumption of notice where proof of sending is lacking; defendants entitled to notice of actual default hearing)
- Paradigm Oil, Inc. v. Retamco Operating, Inc., 372 S.W.3d 177 (Tex. 2012) (when defendant answers, plaintiff must prove claims at trial; post-answer default cannot dispense with proof of elements)
- Maldonado v. Puente, 694 S.W.2d 86 (Tex. App.—San Antonio 1985) (defendant’s failure to appear at initial jury-selection setting does not relieve plaintiff of requirement to give notice of merits trial)
- LBL Oil Co. v. Int’l Power Servs., Inc., 777 S.W.2d 390 (Tex. 1989) (due-process requirement that parties who have appeared receive reasonable notice of trial settings)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for legal- and factual-sufficiency review of evidence in bench trials)
- Mathis v. Lockwood, 166 S.W.3d 743 (Tex. 2005) (when notice is contested, party asserting service must prove compliance with service rules to invoke presumption of receipt)