Bank One, Texas, N.A. v. Moody

ONE, TEXAS, N.A., Formerly BANK Bank,

Deposit Bridge Insurance

N.A., Petitioner, MOODY, Jr., Respondent. L.

Robert

No. D-0722.

Supreme Court of Texas.

April 15, 1992.

Rehearing Overruled June Galveston, peti- Fieglein,

J. for Michael tioner. Polanco, Mytelka,

Andrew J. Arnold G. respondent. for

OPINION COOK, Justice. ap-

This case propriate interpretation and for a new trial after a Lines, 134

Sunshine Bus (1939). S.W.2d 124 gar- Moody served writ of Robert L. Bank One nishment Bank One.1 After on answer, Moody failed to file an obtained $82,000, $1,000 plus fees, costs. attorney’s interest filed a motion for new trial Bank One then by operation of law. that was overruled the trial The court of affirmed 280. We hold that court. 800 S.W.2d treated the appeals improperly independent test as elements, hold that a mistake and we type is one of mistake that One, Texas, Bank One operating One” to both the current as De- refers N.A. was N.A., Bank, Bridge Bridge posit predecessor, Deposit until after Bank. Insurance Insurance rendered. "Bank the first element of the three part element three elements of the four Therefore, by Craddock test. test used appeals. we reverse the the court of judgment appeals of the court of and re- I. mand the cause to the trial court for trial. Lines, Sunshine Bus In an proceeding, Moody earlier obtained this court held that a trial court’s discretion judgment against Joe Richardson and determining grant whether to a new trial Resources, Apex $79,000 Natural Inc. for judgment after the court renders $3,000 fees, costs, and in attorney’s and guiding must principle be referenced to a post-judgment Moody interest. then filed or rule. 133 S.W.2d at 126. The court application garnishment for writ of to guiding then announced the rule as follows: garnish by accounts held Joe Richardson judgment A default should be set aside Apex Resources, and Natural Inc. at Bank any and a new trial ordered in case in garnishment One. The writ of was served which the failure of the defendant to on Bank One and was routed to Robin answer before was not inten- Kane, who was of Bank tional, or the result of conscious indiffer- personnel One. Kane instructed to bank part, ence on his but was due to a mis- identify and freeze all accounts held Joe accident; provided take or an the motion Apex Resources, Richardson and Natural up for a new trial sets a meritorious Inc. There were three accounts that con- defense and is filed at a time when the tained a total of After Kane did $27.57. granting delay thereof will occasion no anything not hear further from the court injury plain- otherwise work an to the Moody, personnel he instructed bank tiff. call the court to determine what to do with appeals S.W.2d at 126. The court of Subsequently, the funds. Bank One sub- improperly broke this test into down mitted a check for to the clerk $27.57 of the elements as follows: court. The exactly record is not clear as to (1) that the failure to answer was not

where the Moody check was sent. received intentional, or the result of conscious in- day check from the court on the difference, (2) that the failure to answer accident, (3). was due to mistake or an hearing At the on the motion for new a meritorious de- the defendant has fense; (4) although Kane testified that and that the defendant’s mo- answer, required grant- tion thought a written was filed at a time when the delay thereof will occasion no or oth- gar- Bank One had done what the writ of injury plaintiff. erwise work an to the required nishment and that Bank had One procedure the same followed when re- 800 at 281. garnishment ceived past. writs that the failure to an- Kane also testified he did not file an an- swer be due to an accident or mistake swer because he believed Bank had One separate should not be treated as a ele- complied garnishment. with the writ part ment. It is of the first element of the Dividing three element test. (1) appeals The court of held: that Bank contrary test into four elements intentional; (2) One’s failure to answer was way consistently interpreted this court has that the failure to answer was due to a changes the test and mistake; (3) that Bank a meritori- One had improperly reading poten- out the defense; (4) a new ous the test. tial for a mistake delay trial would not occasion or otherwise Moody. consistently inter injury work an This court has appeals The court preted 281-82. affirmed the test as (1) following the first failure of trial court because element three elements: four element Craddock test used the defendant to answer before intentional, met. result of con court of was not The court was not or the part, his but was due appeals held Bank One satisfied the other scious indifference on accident; (2) proposition that standard is provided to a or an up the motion for a new trial sets a merito- part a four test.4 Nor have we found defense; (3) rious is filed at time appeals opinion, other than that of granting thereof will when the occasion sup- delay injury an to otherwise work the ports proposition the that plaintiff.2 part test A three is consistent parts. test has four purpose of with the initial Further, application meaning the of being as test well as consistent with subse- changed if the test are the test quent interpretation. parts. having is as four Under the treated development The the of Craddock test Craddock, interpretation of mis- correct a purpose. indicates its initial The Craddock negate take or accident intention guid- court did not create the standard However, if not to file an answer. the test on trial discretion new determinations. elements, a interpreted is four as only “reannounce[d], The in slightly court negate cannot the in- mistake or accident changed language,” existing the rule which because, tent file This is not to an answer. Winters, on 20 Tex. was based Dowell v. part requirement under a four (1858). Craddock, 133 at 793 S.W.2d 126. that the failure to answer not be intention- Dowell made a mistake of and as a law result to disregard failed file a answer to al or to and the due conscious against him. Winter’s suit The Dowell requirement to that the failure answer be court ordered a a new after due accident or must be met to an (1) judgment when the court determined independently. that there was some excuse for not answer- court faced with a mistake of This time, (2) ing on that there was a meritori- Champion Angelo law in v. Restaurant defense, (3) ous that trial was not Co., (Tex.1986). Equipment 713 S.W.2d 96 delayed. 20 at 797. Barnett, v. See also Gotcher The element of the first Craddock test 398 just refines the excuse writ) (mistake negated no of law intention earlier The Dowell standard.3 modified file). Champion After filed suit to provides considering standard that when paid against Angelo, Angelo the claim whether a defendant has a ex- sufficient full did not file an answer to suit. but time, answering cuse for not on the court Angelo mistakenly paying believed considers whether the failure to answer response underlying claim was a sufficient was intentional due to conscious indiffer- no was re to the suit and that answer being ence rather than due to a mistake or quired. The trial court a default Nava, accident. Ward v. (Tex.1973). for new judgment and the motion 738 The court’s overruled its rule in to the facts Crad- trial. This court and the court dock further clarifies the rule. Crad- agreed was due “failure answer presence used the of a mistake dock court Angelo, 713 to an accident or mistake.” preclude presence intentional an “Angelo’s to answer S.W.2d at 97. failure act. caused indifference was not conscious according to payment but the belief that authority court offers the suit agreed schedule would cause splitting into up the Craddock test support elements. None of our cases be dismissed.” Id. (Tex. (Tex.1976);

2.See, Lookingbill, e.g., Lopez Lopez, Inc. S.W.2d 958 v. 757 S.W.2d 721 v. (Tex. 1988); Nava, (Tex.1973); Huggins, Ivy v. 724 S.W.2d 778 v. Ward v. 488 S.W.2d 736 Cliff 1987); Angelo Champion Equip- Carrell, Restaurant 407 S.W.2d 212 Co., (Tex.1986); Guaranty 713 S.W.2d 96 County Reyna, Ins. S.W.2d 647 Mutual Co. suggesting a return to the is not This Watson, (Tex.1986); Grissom v. language of broad excuse Dowell. Prewitt, (Tex.1986); Strackbein v. 671 S.W.2d 37 (Tex.1984); Guaranty Thompson, accompanying supra text. 2 and 4. See note Producers, (Tex. 1982); United Beef Angelo the same conflict as ed regarding that a mistake law case. court in Angelo just response could have appropriate petition to a is a suffi- easily Angelo as said intended not to cient excuse to warrant a new trial after a file an answer. mistake of Id. at 797-98. There- law was sufficient to the intent not fore, the first element of the Craddock test to file an answer. Bank did not file One derived from case where mistake of mistakenly answer because it believed that law was the reason an answer was not submitting the accounts and filed. check for the balance in the accounts to the Craddock, Subsequent courts awas sufficient This answer. meets have held that mistake of satisfies the first element of the Craddock test. segment the mistake of the first element of applications Most of the Craddock test See, Angelo, test. e.g., Craddock 713 focus on whether the failure answer was (mistaken S.W.2d at that paying 97 belief intentional due to conscious indifference. underlying answer); claim was sufficient See, e.g., 778, v. 724 Huggins, S.W.2d Cliff Martinez, Texas Bd. Pharmacy State of (Tex.1987); Prewitt, 779 Strackbein v. 671 277, (Tex.App. Corpus 658 S.W.2d 280-81 — 37, S.W.2d The accident n.r.e.) 1983, (mistaken Christi writ ref’d segment only or mistake considered county belief that exclusive venue rested when, particular on the facts aof an suit). Therefore, county other than the may accident or mistake intentional we hold that a mistake of law be consciously See, indifferent conduct. sufficient to the first element of the Strackbein, 38-39; e.g., three element Craddock test. Mosharaf, State Farm Ins. 794 Co. v. Life 578, (Tex.App. S.W.2d 584 [1st test is well established in Craddock 1990, denied); writ Guardsman Dist.] jurisprudence. Life our A of law is mistake one Andrade, 404, Ins. Co. v. 405 of the that excuses are sufficient to meet 1987, writ Dist.] [1st —Houston the requirements of This is Craddock.6 denied). anof accident or every not to say that act of defendant not as separate has been treated that could a mistake be characterized as treatment, element. Consistent this with See, e.g., law is a Carey sufficient excuse. we hold that Craddock has three Crutcher, Diesel Servic Inc. Mid-Coast set elements as out above. es, Inc., 500, (Tex.App.— 502 1987, writ) (attorney Corpus Christi no did II. bankruptcy stay); not effect of understand This case also Bryan First Bank Peter National mistake of is one whether a of the son, 276, (Tex.App . —Hous may satisfy mistakes that the first element n.r.e.) (re ton 'd writ ref test. The Craddock test Craddock sponse garnishment; to writ of froze ac was a initially restatement the standard counts did not submit funds to the but Winters, devised in Dowell v. 20 Tex. 793 court); v. Dal Butler Tex Mach. & Tool (1858). Craddock, 133 S.W.2d at 126. Co., Inc., (Tex.App.— law5 Dowell made mistake of and as a 1982, writ) (read Fort but not Worth did result to file a failed answer citation; nothing). did understand Dowell, against Winter’s suit him. Kane, court, enunciating at 794. The a standard Robin One, Bank not file a answer to that later stat- did written became though against against separate him the court filed a suit Win- Winters’ suit even 5. Dowell had claiming nothing injunction. Winters ters but Winters In Dowell owed Dowell a had not ruled on the large money. owed sum of suit, requested injunction Dowell However, interpret- holding should not be preventing pursuing Winters from the suit in condoning law made ed as the mistake of which the by any made Bank One or the mistake of law thought requested injunction Dowell in his other defendant. against Winters answer to suit was a sufficient contrary, the record trial. To the it was a for new thought the writ because action. supports the subject ac- sufficient answer to freeze the of the ac- counts and tender balance served on the garnishment The writ issuing the court the writ. counts to file a explicitly directed it to written this statement of Moody did not controvert days accordance answer within Looking at the facts most Procedure, setting Kane’s belief. Rules of Civil the Texas Moody, Kane read and under- in the Bank’s exactly favorable forth what had to be garnishment. provides that: applicable rule stood writ answer. Kane change the fact that that does not garnishee fails to file an answer [i]f thought the answer that what he did was garnishment at or to the writ of before writ, required. This satisfies the first in the it shall the time directed judg- to render a test. lawful for the court ... element of ... See Tex.R.Civ.P. III. consciously de- The Bank erred when test has We hold that legal process ignore cided to set and that a three elements as out above freeze choosing instead to filing reply, may satisfy the first ele- mistake of law a check to affected account and tender all ment of the test. When Craddock occasions, the Bank previous the court. On are three elements of the test procedur- ignored explicit similarly had met, by trial court its discretion abuses garnishments. Its regarding al directives Strackbein, a new trial.7 See president testified that he believed appeals at 38. The court of legally that the action he took was held that Bank One satisfied the second by responded previous writs he had since two elements of the and, simply freezing the affected accounts in this those elements were not an issue legal so, doing in had never encountered Having the first element court. held that practice, no matter problem. party’s But a satisfied, we reverse the intended, established well how well the trial and remand to con- permitted supplant should not be Moody’s court for a determination of rea- by the Tex- legal provided flicting directive obtaining judg- in sonable costs the default Allowing this Procedure. as Rules Civil and then for trial on the merits. ment of law” to defeat type of “mistake through must Bank One follow legal severely weakens judgments Moody for his on its offer to reimburse able to Future defendants process. obtaining in the default reasonable costs judgments defeat no-answer default judgment. to an- asserting their failure merely a mistake of law attributable

swer was always worked practice that had some local GONZALEZ, J., Dissenting opinion by before. DOGGETT, by MAUZY and JJ. joined court, how question The real before

GONZALEZ, Justice, dissenting. ever, committed is not whether the Bank court’s and agree I with both the trial garnish answering in the writ that, appeals’ conclusion under the court of the default that caused “answering” Bus Lines in obviously Sunshine did err The Bank is no to set aside the accounts there basis made out to did not to the court tendering a check judgment, because is did overruling Texas. discretion in the State of clearly abuse its finding its discretion abuse law) motion trial court Bank One’s (by operation Craddock, 133 guiding principle.” rule or dis- some measure of trial courts have 7. "While matter, as, truth, they the Crad- elements of have The three in the S.W.2d at 126. cretion by equitable principles, it is governed court's of a trial all cases the bounds dock test define cases as discretion to decide an unbridled not they discretion. might proper, reference to without deem negate Lawyer: you that the Bank’s mistake failed to Did it? read reviewing conscious indifference. In President: I if I don’t remember read the decision, trial should reverse the court’s we entire contents of this document. only if and order a trial new reasonably The trial court could have clearly record that the reveals abused concluded that the Bank’s branch overruling the Bank’s mo discretion language. did read all of the writ’s previously tion for new trial. This court court, discretion, within its found that that, applying has noted when the abuse of president’s the branch mistake did not ne standard, reviewing discretion gate conscious indifference. Carey See inquiry should focus on whether the trial Crutcher, Inc. v. Diesel Mid-Coast Servic any guid court “acted without reference to es, Inc., 500, (Tex.App.— 725 S.W.2d principles.” rules and Downer v. 1987, writ) (mistake Corpus Christi Inc., Aquamarine Operators, indifference). did not conscious 238, (Tex.1985), denied, cert. 476 Thus, the trial court did not abuse its dis 1159, 2279, U.S. 90 L.Ed.2d 721 S.Ct. by overruling cretion the motion for new (1986), citing Bus Sunshine supports because the record Lines, 124, court’s action. way stating “Another the test is wheth The case before us is almost identical arbitrary er the act was or unreasonable. Peterson, Bryan Nat’l Bank First judge may The mere fact that a trial decide discretionary authority a matter within his n.r.e.); writ ref’d but the appellate in a manner than an different opposite court reached a result Peterson judge in a similar circumstance does not today. from the one the court reaches demonstrate that an of discretion abuse Peterson, the court of affirmed the (citations omitted). has occurred.” Down overruling trial court’s of the bank’s mo at 242. A applying er the record indi tion for new because if it may have abused its discretion clearly cated that the court had not abused grant fails to a new trial when the record also concluded its discretion. The court clearly indicates that the defendant’s mis that: conscious, negated take intent or indiffer lack of action The fact that [the bank’s] ence. re- allegedly due to its mistaken was “a failure Conscious indifference means practice informal local which liance on an indi to take some action which would seem compli- admittedly require strict did person of sensibilities cated to a reasonable garnish- governing ance with the rules circumstances.” under the same Johnson their procedures does not excuse (Tex. Edmonds, 712 S.W.2d the matter. total lack of action on 1986, writ). App. The tes Worth —Fort Id. president, timony of the Bank’s branch who problem This conclusion reveals garnishment, received the writ of indicates misfeasance and distinguishing between unreasonably have acted in nonfeasance, opinion court’s now which the light language. of the writ’s He testified deciding whether a mis- require, would as follows: first element of take of law satisfied the could look Lawyer: you you Would —if test. The Peterson court there, says the document where it at freezing demonstrated ruled that accounts hereby by filing a “You are commanded is, action,” that its “total lack of the bank’s Court,” before said at written answer nonfeasance; instant but in the that, time. You did see such and such a (and accounts court holds you? didn’t check) action, though tendering is some a Yes, I did. President: I am con- to answer the writ. insufficient Lawyer: you that at the time Did see creating misfeasance/nonfea- cerned that you? this document was handed determining the merit for sance distinction create further claims will of mistake law President: No. CORNYN, Justice, dissenting from area of inherently confusion in an difficult temporary relief to request call denial of the law. The test does not election. stay suspend court-ordered different treatment of mistakes merely asks and mistakes of fact. It from the court’s respectfully I dissent mistake of law or whether the defendant’s relator, Del Valle request denial of the conscious indiffer- negates fact intent or District, tempo- for a Independent School analysis Introducing intermediate ence. stay election of rary of the court-ordered unnecessary. is questions to mistake of law 2,May trustees scheduled for board of no indica- The record in this case contains grant least 1992. The court’s failure to at acted in an arbi- tion that the meaningful temporary stay denies us a chose to trary capricious manner when it issues. opportunity to consider at least two overrule the Bank’s motion for new trial. First, I record filed cannot tell from the Regrettably, this would force substantial gave this court whether upon loss the Bank for a incurred debt opportu- the board of trustees reasonable Nevertheless, another. adopt reapportionment a remedial nity to stand, supports should because the record following of the trial plan the rendition the trial court’s action. holding at-large plan reasons, For the above I dissent. of the Texas Constitution. See violative Ramirez, Terrazas v. DOGGETT,JJ., join MAUZY and in this (1991). requirement that the district opinion. that it must conduct a court do so means pro- hearing at which sufficient evidence court to make permit duced “to the district ruling can reviewed on an informed does not appeal.” Id. at 720. record nor, hearing held if reflect that such a was, evidence was adduced. what court does meager record on file reveal, however, that neither the relators DEL INDEPENDENT VALLE SCHOOL plaintiffs brought minority nor the who al., Relators, et DISTRICT trial court’s 6-1 agreed this suit with the plan, orders that reapportionment which single member six trustees be elected from DIBRELL, The Honorable Joe B. at-large; in fact both districts and one Jr., Judge, Respondent. appeals.1 In appealed to the court of sides No. D-2331. and in the court of sought plan, minority plaintiffs Supreme Court of Texas. at-large, elected with no trustees April trust- sought plan, a 5-2 two relators large and elected from ees elected at five duty single districts. While member application for man- presenting record on Austin, Fleming, for relators. T. John relators, I cannot conclude damus falls on record is mere- juncture whether the at this Sanders-Castro, Bagley, Judith Judith a failure ly inadequate or demonstrates Austin, Harrington, respon- James C. mandatory procedures. follow dent. “[although Terrazas, we wrote apportionment, may order Texas courts interlocutory. plan imposing juris- the 6-1 appeal order was dismissed for want 1. That holding that the on the court's diction based

Case Details

Case Name: Bank One, Texas, N.A. v. Moody

Court Name: Texas Supreme Court

Date Published: Jun 24, 1992

Citation: 830 S.W.2d 81

Docket Number: D-0722

Court Abbreviation: Tex.