Reversed and Remanded and Memorandum Opinion filed February 28, 2013.

In The

Fourteenth Court of Appeals

NO. 14-12-00130-CV

DREVER WATERSTONE, L.P. AND CONCIERGE 

ASSET MANAGEMENT, LLC, Appellants

V.

JACQUELINE RHODES, Appellee

On Appeal from the 215th District Court

Harris County, Texas

Trial Court Cause No. 2011-39329

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

In this appeal from a no-answer default judgment, appellants Drever 

Waterstone, L.P. (―Drever‖) and Concierge Asset Management, LLC (―CAM‖),

assert that the trial court erred in denying their motion for new trial. Because 

Drever and CAM sufficiently established that their failure to answer was not 

intentional or the result of conscious indifference, we reverse and remand.
2

BACKGROUND

Appellee Jacqueline Rhodes sued Drever, CAM, and Waterstone Place, an 

apartment complex in Stafford, Texas, on June 30, 2011. She sued these 

defendants under a negligence theory for personal injury she allegedly sustained at 

the Waterstone Place apartments. Specifically, Rhodes alleged the following facts 

as the basis of her claim:

On or about August 22, 2010, while on Defendants’ premises located 

at 516 Stafford Springs Ave., Stafford, Texas, Plaintiff, Jacqueline 

Rhodes, suffered serious and permanent bodily injury as a direct result 

of an occurrence caused by a dangerous condition on Defendants’ 

premises that Defendants and/or their respective agents, servants, 

employees knew of or in the exercise of ordinary cause [sic], should 

have known existed. Defendants and their agents, servants, and 

employees negligently allowed the creation and continued existence 

of this condition, so as to make Defendants’ premises a dangerous 

place. Further, Defendants, by act and/or omission, failed to warn 

Plaintiff of the condition on the premises, despite the fact Defendants 

and their agents, servants and employees knew or in the existence of 

ordinary care, should have known of the existence of the condition 

and the likelihood that this condition would cause serious injury to 

inivitees, to whom Defendants owed a non-delegable duty of care. 

The record reflects that Drever’s and CAM’s registered agent was served 

with the suit and citation on July 12, 2011. When Drever and CAM failed to 

answer the suit, Rhodes moved for default judgment on liability on August 22, 

2011. The trial court granted Rhodes’s interlocutory default judgments on liability 

against these defendants on September 14, 2011. On October 21, the trial court 

conducted a post-default hearing on damages. The trial court signed what 

purported to be a final judgment on October 24, 2011, finding Drever and CAM 

jointly and severally liable for damages to Rhodes in the amount of $382,127.59, 

plus post-judgment interest. 
3

Drever and CAM filed a verified motion to set aside the default judgment 

and motion for new trial (the ―motion‖) on January 20, 2012. In this motion, they 

argued that they were entitled to a new trial because their failure to appear and 

answer was not intentional or the result of conscious indifference. In support of 

this argument, they attached affidavits from Claudia Crocker, their registered 

agent; Jenifer Paneral, CAM’s senior vice president and chief operating officer; 

and Janet Medrano, an insurance broker for Drever and CAM with knowledge of 

this matter. 

In her affidavit Crocker swore to the following. On July 12, 2011, she

received a copy of Rhodes’s petition and citations for Drever and CAM. That 

same day, her legal assistant emailed them to CAM’s controller, Scott Vance, via 

email. On September 23, 2011, she received a postcard from the Harris County 

District Clerk directed to CAM stating that an interlocutory default judgment had 

been entered against it on September 14, 2011. Her legal assistant forwarded this 

postcard, via email, to Vance on September 26. On October 31, 2011, Crocker 

received a second postcard notice from the Harris County District Clerk that an 

interlocutory default judgment had been entered against Drever and CAM on 

October 24. Her legal assistant forwarded this notice, again via email, to Vance on 

October 31. She was not notified by anyone prior to January 17, 2012 that a final 

default judgment had been entered against Drever and CAM.

Paneral attested to the following in her affidavit. Drever owned the 

Waterstone Place apartments at the time of the alleged accident made the basis of 

this suit. CAM managed the day-to-day operations of these apartments. On July 

12, 2011, Paneral received an email from CAM’s controller, Vance, which 

included copies of Rhodes’s petition and citations to Drever and CAM. That same 

day, using her iPad, she sent an email to Drever’s and CAM’s insurance broker,
4

Janet Medrano. As was her ―regular practice,‖ it was her intention to forward the 

suit papers to Medrano for ―further handling and appointment of defense counsel 

to represent CAM’s and Drever’s interests.‖ At the time she sent the email to 

Medrano, she intended to forward Rhodes’s petition and the citations to Medrano, 

and she believed that her email transmission included these documents as 

attachments. Although Paneral’s email did not include the suit papers as 

attachments, the ―string of prior emails [in this email] referenced the citations.‖ 

She did not discover until January 17, 2012, that the petition and citations were not 

attached to this email to Medrano.1 

Finally, Medrano provided the following information in her affidavit. On 

July 12, 2011, she received an email from Paneral, in which Paneral stated that she

believed the ―Rhodes claim‖ had been settled last year and requested that Medrano 

check her files. The subject line to and the inquiry in this email referenced only 

the Rhodes claim; the email had no attachments.2 Medrano reviewed her loss data 

report and quickly responded to Paneral by emailing her that the Rhodes claim 

remained open. Because Medrano never received the petition and citations for this 

suit, she was unaware of the Rhodes proceedings. Medrano first learned about the 

default judgment on January 18, 2012. At no time before January 18, 2012 was 

 

1

Paneral further attested that: (1) on September 26, 2011, Crocker’s legal assistant 

emailed Vance a copy of the postcard notice regarding the interlocutory declaratory judgment 

entered against CAM on September 14; (2) on October 31, Crocker’s legal assistant emailed 

Vance a copy of the second postcard notice regarding the interlocutory judgment entered against 

CAM and Drever on October 24, 2011; and (3) neither she, nor any other employee of CAM or 

Drever, was notified by anyone prior to January 17, 2012 that a final default judgment had been 

entered against CAM and Drever.

2

Paneral did not respond further to Medrano’s update. An earlier email from Crocker’s 

legal assistant to CAM’s controller, Vance, referencing ―citations regarding Criaco v. 

Waterstone One addressed to Drever Waterstone and one addressed to CAM‖ was contained 

within the body of the July 12, 2011 email. Medrano believed that the Criaco matter was 

unrelated to the Rhodes claim. She later discovered that Criaco was Rhodes’s attorney. 
5

she or any other employee of the insurance agency notified that a final default 

judgment had been entered against CAM and Drever.

Drever and CAM also asserted in their motion that they had a meritorious 

defense to Rhodes’s claims. They attached employee affidavits to their motion, 

setting out the factual basis of a meritorious defense to Rhodes’s premises-liability 

claim. These affidavits established that the defendants lacked actual or 

constructive knowledge of a dangerous condition on their property potentially 

giving rise to liability. Finally, Drever and CAM alleged that granting a new trial 

would not injure Rhodes because they promptly filed their motion after learning 

that the default judgment had been entered against them, they stood ready to 

participate in all necessary hearings and a trial on the merits, and they offered to 

reimburse Rhodes for her reasonable and necessary costs incurred in obtaining the 

default judgment. Rhodes responded to the motion, asserting only that Drever’s 

and CAM’s failure to answer resulted from conscious indifference. 

Rhodes’s notice of nonsuit as to Waterstone Place was signed by the trial 

court on January 23, 2012, rendering the previously entered default judgment 

against Drever and CAM final that day. On January 31, 2012, the trial court 

denied Drever’s and CAM’s motion to set aside the default judgment and motion 

for new trial.3 This appeal timely ensued. 

ANALYSIS

In their first issue, Drever and CAM assert that the trial court retained 

plenary jurisdiction to entertain their motion for new trial because they did not 

receive actual notice of the final judgment in this case until January 2012. In their 

second issue, they contend that the trial court erred in denying their motion 

 

3 Drever and CAM subsequently filed a motion to reconsider, which was denied by the 

trial court on February 14, 2012.
6

because they satisfied the Craddock4requirements for granting a new trial after 

entry of a no-answer default judgment. 

A. Plenary Jurisdiction of the Trial Court

As noted above, the trial court signed a final default judgment against 

Drever and CAM on October 24, 2011.5 At that time, Waterstone Place was still a 

named defendant in the case. The October 24, 2011 default judgment does not 

dismiss or otherwise dispose of any claims against Waterstone Place and 

specifically references only Drever and CAM. Rhodes filed a notice of nonsuit as 

to Waterstone Place on January 23, 2012, which was signed by the trial court that 

same day. Until this nonsuit was signed, the default judgment rendered against 

Drever and CAM was interlocutory. See In re Burlington Coat Factory 

Warehouse of McAllen, 167 S.W.3d 827, 829 (Tex. 2005) (orig. proceeding) 

(stating that there is no presumption of finality following a summary or default 

judgment); In re Bro Bro Props., Inc., 50 S.W.3d 528, 530 (Tex. App.—San 

Antonio 2000) (orig. proceeding) (determining that default judgment failing to

dismiss or otherwise dispose of claims against some defendants was not a final 

judgment). Thus, the trial court had plenary power to set aside the default 

judgment and grant a new trial at the time their motion was filed and for thirty days 

from January 23, 2012, the date that the nonsuit rendered the default judgment 

final. See Tex. R. Civ. P. 329b(a), (d). Accordingly, Drever and CAM’s first issue 

is without merit and is overruled.

 

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

5

The judgment states, ―All relief requested by Plaintiff, but not expressly granted herein, 

is hereby denied.‖ However, such ―Mother Hubbard‖ clauses are not an indication of finality in 

the absence of a trial on the merits. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 203–04 (Tex. 

2001).
7

B. Craddock Motion for New Trial

We review a trial court’s refusal to grant a new trial for an abuse of 

discretion. Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922, 926 (Tex. 2009) 

(per curiam). A trial court is required to set aside a default judgment and grant a 

new trial if (1) the defendant’s failure to answer before judgment was not 

intentional or the result of conscious indifference on his part, but was due to a 

mistake or accident, (2) the motion sets up a meritorious defense, and (3) granting 

the motion will ―occasion no delay‖ or otherwise injure the plaintiff. Sutherland v. 

Spencer, 376 S.W.3d 752, 755 (Tex. 2012) (quoting Craddock v. Sunshine Bus 

Lines, Inc., 134 Tex. 388, 133 S.W.2d 124, 126 (1939)). If a defaulting parting 

moving for new trial meets the Craddock test, a trial court abuses its discretion by 

failing to grant a new trial. Id. Because adjudication on the merits is preferred, 

new trials should be liberally granted when the Craddock elements are met. See 

Holt Atherton Inds., Inc. v. Heine, 835 S.W.2d 80, 86 (Tex. 1992); Titan Indem. 

Co. v. Old S. Ins. Grp., Inc., 221 S.W.3d 703, 708 (Tex. App.—San Antonio 2006, 

no pet.). 

1. Failure to Answer

We look to the knowledge and acts of the defendants to determine whether 

they satisfied their burden regarding the first Craddock element. Dir., State Emp. 

Workers’ Comp. Div. v. Evans, 889 S.W.2d 266, 269 (Tex. 1994). A defendant 

satisfies its burden regarding this element when its factual assertions, if true, 

negate intentional or consciously indifferent conduct by the defendant, and the 

factual assertions are not controverted by the plaintiff. In re R.R., 209 S.W.3d 112, 

115 (Tex. 2006) (per curiam). Consciously indifferent conduct occurs when ―the 

defendant knew it was sued but did not care.‖ Fid. & Guar. Ins. Co. v. Drewery 

Constr. Co., 186 S.W.3d 571, 576 (Tex. 2006). 
8

Generally, ―some excuse, although not necessarily a good one, will suffice 

to show that a defendant’s failure to file an answer was not because the defendant 

did not care.‖ R.R., 209 S.W.3d at 115. As described above, Drever and CAM 

attached three affidavits to their motion to establish that they were not 

―consciously indifferent‖: one from their registered agent, Crocker, one from 

CAM’s senior vice president and chief operating officer, Paneral, and one from 

CAM’s and Drever’s insurance broker, Medrano. These affidavits establish that 

CAM’s personnel received Rhodes’s original petition, but unintentionally did not 

attach the petition to an email to their insurance broker as was their usual practice. 

Rhodes did not controvert CAM’s and Drever’s evidence that Paneral 

inadvertently failed to attach the suit papers to her email to Medrano, who was

responsible for the handling and appointment of defense counsel to represent 

CAM’s and Drever’s interests. Rhodes further did not controvert Medrano’s 

affidavit testimony that she never received the suit papers attached to the email she 

received from Paneral and thus was unaware of the suit.6 This excuse, if true, 

negated intentional or consciously indifferent conduct on their part. See 

Sutherland, 376 S.W.3d at 755–56. Thus, the trial court’s denial of Drever’s and 

CAM’s motion for new trial cannot be affirmed on the ground that their excuse for 

not answering was insufficient.7

 

6 Cf. Ferguson & Co. v. Roll, 776 S.W.2d 692, 697 (Tex. App.—Dallas 1989, no writ) 

(―[W]hen a defendant’s excuse is his reliance on a third party to file his answer or to notify him

of a trial setting, he must prove that the third party’s failure was due to accident or mistake and 

not intentional or the result of conscious indifference.‖).

7 CAM’s controller, Vance, and senior vice president and chief operating officer, Paneral, 

both received notices that interlocutory default judgments had been taken against CAM and 

Drever and did nothing. However, all of these notices were received after the default judgment

on liability was signed. Vance’s and Paneral’s failure to act on these notices does not factor into 

our Craddock analysis because only those actions taken before judgment are considered. 

Craddock, 133 S.W.32d at 126 (―[T]he 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 
9

2. Meritorious Defense and No Injury to Plaintiff

Regarding Drever’s and CAM’s meritorious defense, as detailed above, 

Rhodes alleged that she was an invitee injured by a dangerous condition on the 

defendants’ premises about which the defendants knew or should have know, i.e., a 

premises-liability claim by an invitee. Such a claim requires, among other things,

that the owner/operator of the premises had actual or constructive knowledge of 

the condition on the premises. See Towers of Town Lake Condo. Ass’n, Inc. v. 

Rouhani, 296 S.W.3d 290, 295 (Tex. App.—Austin 2009, pet. denied). Drever and 

CAM attached employee affidavits to their motion setting up the defense of lack of 

actual or constructive knowledge of the alleged condition on the premises. See id. 

In other words, they set up a meritorious defense in their motion, and the trial 

court’s denial of their motion cannot be affirmed on the ground that they failed to 

do so.

Turning to the injury prong of the Craddock test, CAM and Drever asserted 

in their motion that granting a new trial would not injure Rhodes. ―Once a 

defendant has alleged that granting a new trial will not injure the plaintiff, the 

burden of going forward with proof of injury shifts to the plaintiff.‖ Evans, 889 

S.W.2d at 270. Rhodes has not disputed this element of the Craddock test, either 

in her response to the motion or on appeal. Further, as discussed supra, Drever 

and CAM filed their motion before a final judgment was rendered in this case. 

They filed their motion promptly after learning that a default judgment had been 

granted against them. In their motion, they advised the trial court that they were 

ready to participate in all necessary hearings and a trial on the merits. Finally, 

Drever and CAM offered to reimburse Rhodes for her reasonable and necessary 

 

accident[.]‖ (emphasis added)). Rhodes also references several other ―notices‖ that were 

allegedly sent to CAM or Drever, but none of these ―notices‖ were provided during the critical 

post-citation, pre-judgment timeframe pertinent to our Craddock analysis. See id.
10

costs incurred in obtaining the default judgment. Injury to a plaintiff may be 

negated by an offer in the motion for new trial to pay costs incurred by a plaintiff 

in obtaining the default judgment. E.g., Europa Cruises Corp. v. AFEC Int’l, 809 

S.W.2d 783, 787 (Tex. App.—Houston [14th Dist.] 1991, no writ). The trial 

court’s denial of Drever’s and CAM’s motion cannot be affirmed on the ground of 

injury to the plaintiff.

We conclude that Drever and CAM have satisfied each component of 

Craddock. Accordingly, we hold that the trial court abused its discretion in 

denying their motion for new trial and sustain their second issue.

CONCLUSION

Because the trial court abused its discretion in denying Drever’s and CAM’s 

verified motion to set aside the default judgment and motion for new trial, we have 

sustained their second issue. We reverse the trial court’s judgment and remand for 

a new trial.

/s/ Adele Hedges

Chief Justice

Panel consists of Chief Justice Hedges and Justices Boyce and Donovan.