Carlo Motors Inc. v. Escillas De Los Santos ( 2019 )

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-19-00055-CV
CARLO MOTORS INC.,
Appellant
v.
Escillas DE LOS SANTOS,
Appellee
From the County Court at Law No. 3, Bexar County, Texas
Trial Court No. 2018CV05541
Honorable David J. Rodriguez, Judge Presiding
Opinion by: Rebeca C. Martinez, Justice
Sitting: Rebeca C. Martinez, Justice
Beth Watkins, Justice
Liza A. Rodriguez, Justice
Delivered and Filed: August 7, 2019
AFFIRMED IN PART; REVERSED AND REMANDED IN PART
Appellee Escillas De Los Santos obtained a no-answer default judgment for breach of
contract and violations of the Deceptive Trade Practices Act (“DTPA”) against Appellant Carlo
Motors, Inc. (“Carlo Motors”). On appeal, Carlo Motors claims the trial court erred when it:
(1) denied Carlo Motors’ motion for new trial; and (2) granted default judgment for unliquidated
damages not supported by evidence. Carlo Motors also complains that De Los Santos’s attorney
represented Carlo Motors in a previous suit and this conflict of interest entitles Carlo Motors to a
new trial.
04-19-00055-CV
BACKGROUND
On September 19, 2017, De Los Santos entered into a written contract to purchase a vehicle
for $18,451 from Carlo Motors. De Los Santos took possession of the vehicle and began making
monthly payments. Several months after De Los Santos purchased the vehicle, he informed Carlo
Motors that he would cease making payments unless the title of the vehicle was transferred to his
name. The next day, Carlo Motors repossessed the vehicle even though De Los Santos was current
on his payments.
On September 11, 2018, De Los Santos filed suit against Carlo Motors claiming Carlo
Motors breached their contract by failing to transfer title and repossessing the vehicle. De Los
Santos also alleged Carlo Motors knowingly and intentionally violated the DTPA—entitling him
to treble damages, attorney’s fees, and court costs. Carlo Motors was properly served citation on
September 21, 2018, and its answer was due by 10:00 AM on October 15, 2018. 1 On October 18,
2018, the trial court signed a no-answer default judgment in favor of De Los Santos granting all
requested damages and relief against Carlo Motors. Later that same day—after De Los Santos
obtained the default judgment—Carlo Motors filed its original answer.
On November 13, 2018, Carlo Motors filed its first motion for new trial. The trial court
held a hearing and denied the motion for new trial on November 16, 2018. On December 26, 2018,
Carlo Motors filed a second motion for new trial. On January 10, 2019, Carlo Motors also filed a
motion to disqualify De Los Santos’s attorney. Carlo Motors’ second motion for new trial and
1
See TEX. R. CIV. P. 99(c) (An answer is due “with the clerk who issued [the] citation by 10:00 AM on the Monday
next following the expiration of twenty days after [the defendant was] served . . . .”).
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motion to disqualify counsel were both dismissed by the trial court for want of jurisdiction because
they were filed after the trial court’s plenary power had expired. 2 Carlo Motors appeals.
WAIVED ARGUMENTS
Carlo Motors attempts to argue on appeal that filing an answer on the same day the trial
court enters a default judgment—albeit after the default judgment was already entered—entitles it
to a new trial. Carlo Motors also attempts to argue, for the first time on appeal, that De Los
Santos’s attorney previously represented Carlo Motors in another matter and this conflict of
interest entitles it to a new trial.
An appellant’s “brief must contain clear and concise argument for the contentions made,
with appropriate citations to authorities and to the record.” See TEX. R. APP. P. 38.1(i). An
appellant waives any issues that are not adequately briefed because nothing is presented for our
review when the appellant fails to cite relevant authority, provide relevant citations to the record,
or provide substantive analysis of the issue raised in the brief. Olivarri v. Olivarri, No. 04-17-
00477-CV, 2018 WL 2418467, at *2 (Tex. App.—San Antonio May 30, 2018, no pet.) (mem. op.).
Here, Carlo Motors does not cite the record or any legal authority supporting the issues it
raises regarding its answer and the alleged conflict of interest. Carlo Motors simply does not
address these issues in its brief other than stating the issues in the “Issues Presented” portion of its
brief. Therefore, Carlo Motors has waived these issues.
MOTION FOR NEW TRIAL
We must next determine whether the trial court abused its discretion when it denied Carlo
Motors’ motion for new trial. The trial court does not abuse its discretion unless the defaulting
2
See TEX. R. CIV. P. 329b(e) (“If a motion for new trial is timely filed by any party, the trial court . . . has plenary
power to grant a new trial or to vacate, modify, correct, or reform the judgment until thirty days after all such timely-
filed motions are overruled . . . .”).
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party establishes all three elements of the test set forth in Craddock v. Sunshine Bus Lines, Inc.,
133 S.W.2d 124 (Tex. [Comm’n Op.] 1939). Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922,
926 (Tex. 2009) (per curiam). Under Craddock and its progeny, a default judgment should be set
aside when the defaulting party establishes: (1) the failure to appear was not intentional or the
result of conscious indifference, but rather the result of accident or mistake; (2) the motion for new
trial sets up a meritorious defense; and (3) granting the motion will occasion no undue delay or
otherwise injure the party taking the default judgment. Id. at 925 (citing Craddock, 133 S.W.2d
at 126). “The historical trend in default judgment cases is toward the liberal granting of new trials.”
Tex. Sting, Ltd. v. R.B. Foods, Inc., 82 S.W.3d 644, 650 (Tex. App.—San Antonio 2002, pet.
denied). “When a defaulting party moving for new trial meets all three elements of the Craddock
test, then a trial court abuses its discretion if it does not grant a new trial.” Lerma, 288 S.W.3d at
926 (declaring a movant must meet all three of the Craddock elements in its motion for new trial
to prevail on appeal).
Here, Carlo Motors did not establish its failure to appear was not intentional or the result
of conscious indifference, nor did it demonstrate that granting the new trial will occasion no undue
delay or otherwise injure De Los Santos. In its motion for new trial, Carlo Motors only claims it
filed an answer after the default judgment was signed by the trial court and that it had a meritorious
defense to De Los Santos’s claims. However, all three elements of the Craddock test must be
established in its motion for new trial for an appellant to show the trial court abused its discretion
when it did not grant a new trial. See id. While Carlo Motors properly alleged a meritorious
defense, its failure to establish the other two Craddock elements is fatal to its claim for a new trial.3
3
We do not consider Carlo Motors’ second motion for new trial because it was not timely filed and was properly
dismissed by the trial court for want of jurisdiction. See TEX. R. CIV. P. 329b(e). The result of this appeal would have
been the same even if we did consider Carlo Motors’ second motion for new trial because Carlo Motors failed to
establish the second and third elements of the Craddock test in the second motion.
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Because Carlo Motors did not establish all three elements of the Craddock test, we hold
the trial court did not abuse its discretion when it denied Carlo Motors’ motion for new trial. Carlo
Motors’ first issue is overruled.
DAMAGES
Carlo Motors argues in its second issue that it is entitled to a new trial because the damages
awarded to De Los Santos are unliquidated and, absent a reporter’s record, there is insufficient
evidence to support an award of unliquidated damages.
“It is well settled that once a default judgment is taken against a non-answering defendant
on an unliquidated claim, all allegations of fact set forth in the petition are deemed admitted, except
the amount of damages.” Tex. Commerce Bank, Nat’l Ass’n v. New, 3 S.W.3d 515, 516 (Tex.
1999) (emphasis added). Although a plaintiff must produce evidence of unliquidated damages
before a trial court may enter a default judgment on those damages under rule 243 of the Texas
Rules of Civil Procedure, that evidence may be produced in the form of affidavits so long as the
amount of unliquidated damages can be proved with reasonable certainty. Id. at 516–18; Holt
Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex. 1992). For liquidated damages, however,
the trial court can render a default judgment if it can verify the damages by referring to the
allegations in the petition and they are “proved by an instrument in writing.” TEX. R. CIV. P. 241;
see also Whitaker v. Rose, 218 S.W.3d 216, 220 (Tex. App.—Houston [14th Dist.] 2007, no pet.).
Before we can determine whether there is sufficient evidence to support the damages in
this case, we must first determine whether the damages awarded to De Los Santos were liquidated
or unliquidated. “A claim is liquidated if the amount of damages may be accurately calculated by
the trial court from the factual, as opposed to the conclusory, allegations in plaintiff’s petition and
the instrument in writing.” Aavid Thermal Tech. of Tex. v. Irving Ind. Sch. Dist., 68 S.W.3d 707,
711 (Tex. App.—Dallas 2001, no pet.). “If the instrument in writing is attached to the plaintiff’s
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04-19-00055-CV
petition and if the amount of damages can be calculated from the allegation in the petition,
judgment should be entered for that amount against the defaulting defendant.” First Nat’l Bank of
Irving v. Shockley, 663 S.W.2d 685, 688 (Tex. App.—Corpus Christi-Edinburg 1983, no writ); see
also Novosad v. Cunningham, 38 S.W.3d 767, 773 (Tex. App.—Houston [14th Dist.] 2001, no
pet.) (holding suit to recover amount due for professional services was a liquidated claim proved
by written instruments where plaintiff attached original invoices to verified petition and motion
for default judgment).
In contrast, “unliquidated damages are not susceptible to exact calculation and involve a
range of possible answers.” Paradigm Oil, Inc. v. Retamco Operating, Inc., 372 S.W.3d 177, 186
(Tex. 2012). “For this reason, a defaulting defendant admits facts establishing liability but not any
claimed amount of unliquidated damages.” Id. (citing Holt Atherton, 835 S.W.2d at 83).
A. Unliquidated Damages
Here, De Los Santos attached his own affidavit to the motion for default judgment attesting
to damages in the amount of: (1) $4,658.61 for money he had already paid for the vehicle;
(2) $320.00 in reimbursement for tires he had put on the vehicle before it was repossessed;
(3) $120.00 in reimbursement for a battery he had put in the vehicle before it was repossessed; and
(4) $12,050.00 for his loss of use of the vehicle. Further, De Los Santos requested these damages
be trebled under the DTPA because Carlo Motors had knowingly and intentionally violated the
act. De Los Santos did not attach written instruments to support these damages and they cannot
be accurately calculated by the trial court from conclusory allegations in De Los Santos’s petition
and affidavit. Holt Atherton, 835 S.W.2d at 83 (citing TEX. R. CIV. P. 243) (“The amount of
[unliquidated damages] must be shown with competent evidence with reasonable certainty.”).
Because these damages cannot be accurately calculated by the trial court from the factual, as
opposed to the conclusory, allegations in De Los Santos’s petition and affidavit, they are
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unliquidated. Because these damages are unliquidated—and the amounts are not supported by a
written instrument—evidence of these damages must be heard by the trial court.
Under Holt Atherton, Carlo Motors does not admit De Los Santos’s claims for unliquidated
damages notwithstanding its failure to answer the lawsuit. And, because the trial court did not
hold an evidentiary hearing on damages, there is insufficient evidence to uphold the trial court’s
judgment awarding De Los Santos $17,148.61 4 in unliquidated damages. Holt Atherton,
835 S.W.2d at 83; see also TEX. R. CIV. P. 243 (“If the cause of action is unliquidated or be not
proved by an instrument in writing, the court shall hear evidence as to damages and shall render
judgment therefor, unless the defendant shall demand and be entitled to a trial by jury in which
case the judgment by default shall be noted, a writ of inquiry awarded, and the cause entered on
the jury docket.”). The portion of the trial court’s judgment granting additional damages in the
amount of $51,445.83 must also be reversed because it is based on the improper award of
unliquidated damages.
B. Liquidated Damages
De Los Santos also requested attorney’s fees and court costs under section 38.001 of the
Texas Civil Practice and Remedies Code and the DTPA. In contrast to his request for unliquidated
damages, De Los Santos attached an affidavit from his attorney describing the reasonableness of
the fees and a written instrument—in the form of the attorney’s original invoice—supporting his
attorney’s fees and court costs. Because the claim for attorney’s fees and court costs may be
accurately calculated by the trial court from the factual, as opposed to the conclusory, allegations
in De Los Santos’s petition and the written instrument, the attorney’s fees and court costs are a
4
This is the sum of the unliquidated damages: (1) $4,658.61 for money De Los Santos had already paid for the vehicle;
(2) $320.00 in reimbursement for tires; (3) $120.00 in reimbursement for a battery; and (4) $12,050.00 for his loss of
use of the vehicle.
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liquidated claim for damages that is properly supported by evidence. See Aavid Thermal,
68 S.W.3d at 711; see also Novosad, 38 S.W.3d at 767 (holding an original invoice attached to a
verified petition supports a finding that the amount owed under the invoice for professional
services is a liquidated claim).
CONCLUSION
We affirm the portion of the trial court’s judgment awarding De Los Santos $5,699.14 in
attorney’s fees and court costs. We reverse the portion of the trial court’s judgment awarding De
Los Santos $17,148.61 in unliquidated damages and $51,445.83 in additional damages and remand
the cause to the trial court for further proceedings on the issues of unliquidated and additional
damages. See Holt Atherton, 835 S.W.2d at 86 (“[W]hen an appellate court sustains a no evidence
point after an uncontested hearing on unliquidated damages following a no-answer default
judgment, the appropriate disposition is a remand for a new trial on the issue of unliquidated
damages.”).
Rebeca C. Martinez, Justice
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