Reversed and Remanded and Memorandum Opinion filed April 14, 2015.

In The 

Fourteenth Court of Appeals 

NO. 14-14-00125-CV

ROBERT DUNLAP, Appellant 

V.

SUNTHENOIL, LLC, Appellee 

On Appeal from the 215th District Court 

Harris County, Texas 

Trial Court Cause No. 2013-41128 

M E M O R A N D U M O P I N I O N 

 Appellant Robert Dunlap asks us to reverse the no-answer default judgment 

against him on the grounds that (1) service was defective, (2) he was never served, 

(3) the judgment does not conform to the pleadings, and (4) the plaintiff neither 

alleged nor proved that the condition precedent to its recovery of liquidated 

damages had occurred. Because we conclude that Dunlap satisfied the elements of 

the Craddock test for setting aside a no-answer default judgment, we reverse the 
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judgment and remand the case for new trial. 

I. BACKGROUND

 Sunthenoil, LLC sued Dunlap for breach of contract, seeking actual damages 

and liquidated damages as provided in the parties’ agreement. In the contract, the 

parties stated that Sunthenoil had provided Dunlap with presentations and business 

plans to be used in raising funds for investment from foreign sources, and that 

Sunthenoil additionally would loan Dunlap $640,900 for ninety days so that 

Dunlap could purchase a Swiss shell company into which the foreign funds could 

be deposited. Dunlap was to use the foreign funds for two transactions that the 

parties referred to as “Future Investments.” Specifically, Dunlap was to purchase 

an interest in Sunthenoil for $9 million and invest a further $7.5 million in another 

company. Dunlap was to complete these transactions not later than August 20, 

2012. The parties agreed that if Dunlap obtained the foreign funds required for the 

Future Investments but did not complete the transactions, then he would pay 

Sunthenoil $10 million as liquidated damages. 

 Sunthenoil alleged in its pleading that it had fully performed its contractual 

obligations, and sought damages of $640,900 for Dunlap’s failure to repay the 

loan, and a further $10 million as provided under the contract’s liquidated-damages 

provision. Finally, Sunthenoil alleged in its pleading that all conditions precedent 

had been performed or had occurred. The process server repeatedly attempted to 

personally serve Dunlap at his home or business, but was unsuccessful. Sunthenoil 

therefore obtained a court order authorizing it to serve Dunlap by alternative 

means. 

 After the process server filed a return of service showing compliance with 

the order’s terms, Sunthenoil moved for a no-answer default judgment. The trial 

court granted the motion, awarding Sunthenoil the full amount of damages 
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requested. 

 Dunlap moved for a new trial on the ground that he was never served, and 

thus, his failure to answer was neither intentional nor the result of conscious 

indifference, but instead was due to accident or mistake. The trial court denied the 

motion, and Dunlap filed this appeal. 

II. THE CRADDOCK TEST

 Although Dunlap presents four issues for our review, it is unnecessary for us 

to address them all. Because we conclude that he satisfied all of the elements of 

the Craddock test, we do not address his remaining issues. See Craddock v. 

Sunshine Bus Lines, Inc., 134 Tex. 388, 393, 133 S.W.2d 124, 126 (1939).

Under Craddock, a trial court must set aside a default judgment if (a) “the 

failure of the defendant to answer before judgment was not intentional, or the 

result of conscious indifference on his part, but was due to a mistake or an 

accident”; (b) “the motion for a new trial sets up a meritorious defense”; and 

(c) granting the motion for a new trial “will occasion no delay or otherwise work 

an injury to the plaintiff.” Id. We review the denial of a motion for new trial for 

abuse of discretion. Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922, 926 (Tex. 

2009) (per curiam) (citing Cliff v. Huggins, 724 S.W.2d 778, 778 (Tex. 1987)). 

The trial court abuses its discretion in denying a defaulting party’s motion for new 

trial if the elements of the Craddock test have been met. Id. (citing Old Republic 

Ins. Co. v. Scott, 873 S.W.2d 381, 382 (Tex. 1994) (per curiam)). 

A. Dunlap established that his failure to answer was neither intentional nor 

due to conscious indifference. 

 The first Craddock element is satisfied when (1) the defendant’s factual 

assertions, if true, negate intentional or consciously indifferent conduct by the 

defendant; and (2) the plaintiff does not controvert those factual assertions. See 
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Sutherland v. Spencer, 376 S.W.3d 752, 755 (Tex. 2012) (citing In re R.R., 209 

S.W.3d 112, 115 (Tex. 2006) (per curiam)); Dir., State Emps. Workers’ Comp. 

Div. v. Evans, 889 S.W.2d 266, 268 (Tex. 1994) (citing Strackbein v. Prewitt, 671 

S.W.2d 37, 38–39 (Tex. 1984)). Dunlap satisfied this requirement with his factual 

assertion concerning his lack of knowledge that he was served. 

 Here, the trial court’s order for substituted service required Dunlap to be 

served in multiple ways. Among other methods, the process server was required to 

leave a copy of the citation and petition (1) with anyone over sixteen years of age 

at Dunlap’s home or business, or (2) securely attached to the front door of 

Dunlap’s home. The return shows that the process server attached the citation and 

petition to Dunlap’s front door, but in support of his motion for new trial, Dunlap 

stated, “To my knowledge, the petition was never left at my home . . . or at my 

office . . . .”1 

 If true, this statement negates intentional or consciously indifferent conduct, 

because it would mean that Dunlap did not know that he had been served as 

ordered by the trial court. See Evans, 889 S.W.2d at 269 (stating that when 

determining whether the first Craddock factor has been satisfied, courts must look 

to the defendant’s knowledge and actions). Thus, Dunlap’s denial of any 

knowledge that the petition was left at his home or business is the same as a 

statement that he did not know—or does not recall—being served as ordered. See 

Vespa v. Nat’l Health Ins. Co., 98 S.W.3d 749, 752 (Tex. App.—Fort Worth 2003, 

no pet.) (explaining that if the trial court orders substituted service, then service 

must be accomplished without deviation from the trial court’s order). And if 

 

1 Although evidence in support of a motion for new trial commonly is presented in the 

form of an affidavit, an unsworn declaration made in compliance with Texas Civil Practice and 

Remedies Code section 132.001 may be used in lieu of an affidavit. See TEX. CIV. PRAC. & REM.

CODE ANN. § 132.001 (West Supp. 2014). Dunlap’s motion for new trial was supported by such 

a declaration.
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Dunlap did not know or did not recall that he had been served, then he did not 

know that he was required to answer the suit. See Wilson v. Dunn, 800 S.W.2d 

833, 837 (Tex. 1990) (“Absent service, waiver, or citation, mere knowledge of a 

pending suit does not place any duty on a defendant to act.”).

 On these facts, we conclude that Dunlap’s uncontroverted statement denying 

knowledge that the substituted service had been performed is sufficient to establish 

that his failure to answer was neither intentional nor the result of conscious 

indifference. See Milestone Operating, Inc. v. ExxonMobil Corp., 388 S.W.3d 

307, 310 (Tex. 2012) (per curiam) (holding that a defendant satisfied the first 

Craddock element where its registered agent testified that he did not recall being 

served and the plaintiff did not controvert the testimony). Thus, the first Craddock 

element is satisfied. 

B. Dunlap set up a meritorious defense.

 To determine if a defendant has set up a meritorious defense, we look to the 

facts alleged in its motion and affidavit, regardless of whether they are 

controverted. See Evans, 889 S.W.2d at 270. 

 As previously discussed, Dunlap’s contract with Sunthenoil provided that if 

Dunlap obtained foreign funds sufficient to complete the Future Investments but 

failed to do so, then he would pay Sunthenoil $10 million as liquidated damages. 

Dunlap asserted that the liquidated-damages provision of the contract was never 

triggered, because he did not obtain the foreign funds. This fact, if true, constitutes 

a failure of a condition precedent to Sunthenoil’s right to liquidated damages. 

Because this constitutes a meritorious defense, Craddock’s second element is 

satisfied. 
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C. Granting the motion for new trial would not delay or injure Sunthenoil.

 Regarding the third element of the Craddock test, Dunlap asserted in his 

motion that a new trial would not delay or prejudice the parties in any manner, and 

that he was “willing and able to proceed with this cause as required” by the trial 

court. In addition, he offered to reimburse Sunthenoil its reasonable and necessary 

attorney’s fees incurred “in attending the default hearing if found to be fair and 

equitable” by the trial court. 

 Once Dunlap alleged that granting a new trial would not delay or prejudice 

Sunthenoil, the burden shifted to Sunthenoil to prove injury. See Dolgencorp, 288 

S.W.3d at 929. Because Sunthenoil did not dispute the absence of any injury, the 

third element of the Craddock test is satisfied. 

III. CONCLUSION

 Because each of the Craddock elements has been satisfied, the trial court 

abused its discretion in denying Dunlap’s motion for new trial. We accordingly 

reverse the judgment and remand the case for further proceedings consistent with 

this opinion. 

 

 /s/ Tracy Christopher

 Justice 

Panel consists of Justices Christopher, Donovan, and Wise.