Court Opinion

ID: 4051126
Source: CourtListenerOpinion
Date Created: 2016-09-29 01:28:42.929563+00
Date Added: 2024-06-11T14:27:21.961783
License: Public Domain

ACCEPTED
                                                                                       13-14-00462-CV
                                                                          THIRTEENTH COURT OF APPEALS
                                                                                CORPUS CHRISTI, TEXAS
                                                                                   3/27/2015 4:43:11 PM
                                                                                      DORIAN RAMIREZ
                                                                                                 CLERK

                          CAUSE NO. 13-14-00462-CV
                                                    FILED IN
                                            13th COURT OF APPEALS
                                         CORPUS CHRISTI/EDINBURG, TEXAS
          IN   THE COURT OF APPEALS FOR THE THIRTEENTH
                                             3/27/2015 4:43:11 PM
                COURT OF APPEALS DISTRICT OF TEXAS,
                                              DORIAN E. RAMIREZ
                                                     Clerk
                   CORPUS CHRISTI-EDINBURG, TEXAS

               ALAMO HOME FINANCE, INC. AND GONZALEZ
                        FINANCIAL HOLDINGS, INC.,
                                    Appellants

                                        vs.

                   MARIO DURAN AND MARIA DURAN,
                                    Appellees

                ON APPEAL FROM THE 92ND JUDICIAL
            DISTRICT COURT OF HIDALGO COUNTY, TEXAS
                            CAUSE NO. C-265-09-A

       APPELLANT'S REPLY BRIEF TO "BRIEF OF APPELLEES
             MARIO DURAN AND MARIA DURAN AS
                    TO ALAMO HOME FINANCE, INC."

TO THE HONORABLE JUSTICES OF THE THIRTEENTH COURT OF APPEALS
OF THE STATE OF TEXAS, CORPUS CHRISTI/EDINBURG, TEXAS:

      NOW COMES ALAMO HOME FINANCE, INC. ("ALAMO"), Appellant, and

files this its Reply Brief to "Brief of Appellees Mario Duran and Maria Duran As To

Alamo Home Finance, Inc." pursuant to Rules 38.3 and 38.6(c), Tex. R. App. P.; and
in support thereof would respectfully show this Honorable Court as follows:

                                          I.

   ALAMO IS NOT PRECLUDED FROM CHALLENGING ON APPEAL
     THE INPERSONA]\1 JURISDICTION OF THE TRIAL COURT

      Under the headings that "Appellant has clearly failed to preserve error", and

that it "cannot switch horses mid-stream" (Appellees' Brief, at 9), Appellees urge that

ALAMD may not now challenge the underlying service of citation:

      Before the trial court. Tax Lender [ALAMO] took the position that its
      registered agent was properly served: "Movant admits that its registered
      agent, Corporation Service Company d/b/a CSA-La'wyers Incorporated
      Service Company was properly served with citation.'1'1 C.R. 41
      (emphasis added). Before this Court, [ALAMO] now asserts that it was
      not properly served. Regardless of the merits, one problem exists with
      [ALAMO's] current lack of service arguments: in law, just as in life, a
      litigant cannot switch horses in mid-stream [citations omitted].

      It is well settled that parties are restricted on appeal to the theory upon
      which the case was tried in the lower court [citations omitted]. Thus, "it
      is well settled that a case will not be reviewed by the appellate court on
      a different theory from that on which it was tried" [citing Tex-Hio
      Partnership v. Garner, 106 S.W.Sd 886, 896 (Tex. App.-Dallas 2003,
      no pet.)]...

      A party cannot complain of errors before the appellate court, without
      first having complained before the trial court...If an appellant complains
      of trial court errors for the first time on appeal, such complaints are not
      present before the reviewing court [citations omitted]...

M, at 10-12.
      One of the problems with this argument is that there is not one iota of legal

authority to back it up in the context of this case. While it is generally true that

"parties are restricted on appeal to the theory upon which the case was tried in the

lower court", this case was not tried in the lower court — and Appellees, since the

default judgment was entered, have been doing everything in their power (or almost

everything in their power, short of filing timely briefs) to prevent the case from being

tried in the lower court. A mere precatory clause of one sentence in the original

motion for new trial, which was filed by ALAMO's previous attorney, does not

constitute trial of the case in the lower court. The fact that the original motion for

new trial involved only the Craddock ground, while the instant appeal involves both

Craddock and jurisdictional grounds, most certainly does not suggest an

"inconsistency" of approach, since ALAMO has never asked for, has never received,

and does not expect to receive any form of relief based on the proposition that service

of citation in the lower court was proper. Quite the contrary: service was improper

to the point of being non-existent. ALAMO's original motion for new trial was

simply neutral on the matter of inpersonam jurisdiction, which points up the fact that

the real issue here is preservation of error (as further discussed below), rather than

"changing horses in mid-stream."

      Most assuredly none of the cases cited by Appellees in their brief support their
position here. InDavisv. Campbell, 572 S.W.2d 660 (Tex. 1978) the Texas Supreme

Court simply observed, unremarkably, that "[p]arties are restricted on appeal to the

theory on which the case was tried", and it said this in the context of analyzing an

actual theory on which the case had been tried to a jury. Davis, at 661-662. So too

Mitchell Energy Corporation v. Bartlett, 958 S.W.2d 430 (Tex. App.-Fort Worth

1997, writ denied) involved a theory of damages actually tried to a jury, and included

the observation that "[h]aving elected to submit their case on the theory of permanent

injury to property, and having received an award based on that theory, appellees are

limited to that theory on appeal." Mitchell Energy, at 444.

      To like effect are Tex-Hio Partnership v. Garner, 106 S.W.3d 886, 896 (Tex.

App.-Dallas 2003, no pet.) ("It is well settled that a case will not be reviewed by the

appellate court on a different theory from that on which it was tried"); Boatner v.

Providence-Washington Insurance Company, 241 S.W. 136, 140 (Tex. Comm'n.

App. 1922, judgment adopted) ("The law forbids the assumption of an attitude on

appeal inconsistent with that taken at the trial, and on appeal litigants are restricted

to the theory upon which the cause was prosecuted or defended in the court below");

Vaughn Building Corporation v. Austin Company, 620 S.W.2d 678,683 (Tex. Civ.

App.-Dallas 1981), affirmed, 643 S.W.2d 113 (Tex. 1982) ("[T]he parties are

restricted on appeal to the theory on which the case was tried in the lower court...As
a corollary, a litigant cannot assume an attitude on appeal contrary to that taken at the

trial [citing Boatner, supra]")', and Trinity Universal Insurance Company v.

Brainard, 153 S.W.Sd 508, 513 (Tex. App.-Amarillo 2004, modified on other

grounds, 216 S.W.Sd 809 (Tex. 2006).("However, on appeal, parties are restricted to

the theory on which the case was tried.").

       It should be noted that Appellees do not urge (nor is it the case) that this throw-

away line by ALAMO's former counsel constitutes a "judicial admission." Of course,

even were we to assume arguendo that this line constitutes an admission of being

"properly served", it would be an admission only of having been "properly served"

with Plaintiffs' Original Petition (not with Plaintiffs' Second Amended Petition),

which, as discussed in Appellant's Brief, the process server and Appellees' own

counsel freely and expressly admit was the case ; again as discussed. Plaintiffs'

Original Petition herein does not name, purport to name, or attempt to name ALAMO

or any one affiliated with ALAMD as a Defendant in the case, such that ALAMO

would not have been required to respond to such "proper service" in any event.

      However, it would not be necessary to reach that point even ifAppellees had

raised it in their brief because this line is not a judicial admission, nor could it be—it

was superceded by ALAMO's First Amended Motion for New Trial filed on August

       'Brief of Appellant ALAMO HOME FINANCE, INC., at 4, 5, App. I; R.R., at 10.

                                            5
11,2014 (C.R., at 49), which not only omits this line but expressly challenges the trial

court's in personam jurisdiction. It is of course axiomatic that, even were we to

extend Appellees the courtesy of considering former counsel's line as being one

contained in a "pleading", it is well settled that "although the pleadings in a case are

regarded as judicial admissions, when a pleading has been abandoned, superceded,

or amended it ceases to be a judicial pleading and ceases to be a judicial admission."

Leonard v. Coastal States Crude Gathering Company, 2003 WL 21067090 (Tex.

App.-San Antonio 2003, no pet.), at *6; see also Drake Insurance Company v. King,

606 S.W.2d 812, 817 (Tex. 1980) (pointing out that if a pleading is amended,

statements inthe pleading cease to be judicial admissions) and Kirby Highland Lakes

Surgery Center, LLP v. Kirby, 183 S.W.3 d 891,903 (Tex. App.-Austin 2006, no pet.)

(citing Drake, supra, for this proposition, at fn. 4).

      Appellees point out that, pursuant to Rule 329b(b), Tex. R. Civ. P., "[o]ne or

more amended motions for new trial may be filed without leave of court before any

preceding motion for new trial filed by the movant is overruled and within thirty days

after the judgment or other order complained of is signed", and that ALAMO's First

Amended Motion for New Trial—even though filed during the period of the trial

court's plenary jurisdiction—is untimely under that rule. Fair enough—but that goes

only to the issue of whether the amended motion preserves error. As the Texas
Supreme Court observed in Jackson v. Van Winkle, 660 S.W.2d 807 (Tex. 1983),

"[w]hether a late-filed motion for new trial will be considered is within the discretion

of the trial court." Jackson, at 808. The Court later overruled Jackson in part in the

case ofMoritz v. Preiss, 121 S.W.Sd 715 (Tex. 2003), holding that "[a] trial court's

order overruling an untimely new trial motion cannot be the basis of appellate

review" but that "the trial court may, at its discretion, consider the grounds raised in

an untimely motion and grant a new trial under its inherent authority before the court

loses plenary power [citing Jackson, supra}". M^oritz, at 720. And the Court

specifically pointed out that "[w]e overrule Jackson only to the extent that it allows

appellate review of a trial court's decision to deny an untimely new trial motion."

Id., at 721.

       In other words, an untimely amended motion for new trial is not "void"—if it

were, the trial court would not have discretion to consider the grounds raised in it, as

the Texas Supreme Court expressly states it does. However, since no new trial was

granted here, we must return to what Appellees themselves concede (Appellees'

Brief, at 10, 16) is the core issue: whether the rules regarding preservation of error

preclude the consideration of in personam jurisdiction, and specifically the defects

of service, in the instant appeal.

       Fortunately Texas law guides us quite plainly on this point. In Garduza v.
Castillo, 2014 WL 2921650 (Tex. App.-Dallas 2014, no pet.) the appellant challenged

a default divorce decree based on an amended pleading with which he had not been

served. The appellant was pro se at trial and during certain post-trial proceedings

leading up to his appeal; he filed a form motion for new trial but failed to raise any

arguments regarding service until the appellate phase. The appellate court

nonetheless reversed, rejecting the appellee's argument that there had been a failure

to preserve error. The court acknowledged that ordinarily under Rule 33.1, Tex. R.

App. P. a party must present to the trial court a timely request, motion or objection,

state the specific grounds therefor, and obtain a ruling. Garduza, at * 3 (citing to In

reLMI, 119 S.W.3d 707, 711 (Tex. 2003)). The court further observed, however,

that the issue of defective service of citation can properly be raised for the first time

on appeal. Id. (citing Wilson v. Dunn, 800 S.W.2d 833, 837 (Tex. 1990); Benefit

Planners, LLPv. RenCare,Ltd., 81 S.W.Sd 855, 857-858 (Tex. App.-San Antonio

2002, pet. denied)). So too in Lee Hoffpauir, Inc. v. Kretz, 431 S.W.Sd 776

(Tex. App.-Austin 2014, no pet.) the appellate court considered a challenge to a

default judgment rendered in an underlying action involving theories of negligence,

breach of contract, and DTPA violations. The plaintiffs, Kenneth Kretz and Elayne

Kretz, attempted to serve defendant Lee Hofipauir, Inc. ("Hofipauir") through the

district clerk's office via registered or certified mail. The return of service and
attached "green card" reflected the name and signature of a Ms. Alice Bird, although

the registered agent for service of process was Mr. Lee Hoffpauir, the defendant's

principal. The court observed that "it is undisputed that she [Bird] is the office

manager for Hoffpauir, Inc., but what is significant for this appeal is that she, not Mr.

Hoffpauir, signed the card." Hoffpauir, at 777-778. There, as here, Hoffpauir did

not file an answer, and the Kretzes moved for and obtained a default judgment

awarding them over a half million dollars in damages. Hoffpauir thereafter timely

filed a motion for new trial with affidavits intended to establish the Craddock

elements, but did not initially complain of defective service. The district court,

without a hearing, denied the motion, and Hoffpauir appealed. Id., at 778.

      The appellate court reversed. Without reaching the Craddock points, the

appellate court agreed with Hoffpauir that service was defective in several respects,

and it dismissed the Kretz' argument that Hoffpauir had waived this basis for

challenging the judgment by not asserting it in the motion for new trial. Id.

      In that regard the appellate court returned, as so many Texas courts have, to the

Texas Supreme Court's 1990 decision in Wilson, supra, and that opinion's excellent

exegesis of the importance of strict adherence to the rules regarding service of

citation. As explained in Hoffpauir:

      Wilson involved a no-answer default judgment taken against a defendant
       who had been served through substituted service and who had actually
       received the citation and suit papers, but the substituted service had not
       been obtained in compliance with Texas Rule of Civil Procedure 1 06(b).
       As in the present case, the defendant (Dunn) filed a motion for new trial
       that did not complain about defective service but raised the issue on
       appeal.

       The Texas Supreme Court held that defective service required reversal
      of the default judgment, observing that "[f]or well over a century the
      rule has been firmly established in this state that a default judgment
      cannot withstand direct attack by a defendant who complains that he was
      not served in strict conformity with applicable requirements." Nor did
      Dunn's actual notice of the citation and petition change the analysis, the
       supreme court added, because "[a]ctual notice to a defendant, without
      proper service, is not sufficient to convey upon the court jurisdiction to
      render default judgment against him" because "jurisdiction is [instead]
       dependent upon citation issued and served in a manner provided for by
       law." Having disposed of these contentions, the supreme court turned
      to the issue of whether Dunn had been required to preserve his
      defective-service complaint by raising it in his motion for new trial. The
      entirety of the court's analysis of that question consisted of the
       following observation: "Rule 324"—the rule of civil procedure
      providing that a new trial motion is required to preserve for appeal
      certain complaints related to factual insufficiency of the evidence or "[a]
       complaint on which evidence must be heard"—"imposes no such
      requirement for preservation of such error."

Id., at 778-779 (fiis. omitted).

      The appellate court further rejected the Kretz' argument that the post-Wilson

enactment of current Rule 33.1 of the Texas Rules of Appellate Procedure somehow

abrogates or supercedes this point in Wilson\ the Kretzes cited to the appellate court's

own holding in Elite Towing, Inc. v. LSI Financial Group, 985 S.W.2d 635, 644

                                           10
(Tex. App.-Austin 1999, no pet.) for the proposition that the 1997 changes to the

Texas Rules of Appellate Procedure were intended in part to "require that parties who

are unable to preserve error prior to judgment must do so through a post-judgment

motion" (even though Rule 324, Tex. R. Civ. P. does not include complaints of

defective service leading to a no-answer default judgment among the points that must

be raised in a motion for new trial). Id., at 780. The court disagreed, however,

pointing out that Wilson specifically dealt with a defective sendce complaint,

and—as Wilson recognized—"failure to lawfully serve a defendant means that the

trial court lacks personal jurisdiction over him or her... ." Id. The appellate court

concluded that "the current Texas Rules of Appellate Procedure have not abrogated

Wilson 's holding that a defendant may raise a defective service complaint for the first

time on appeal, and certainly not where, as here, the plaintiff failed to serve the

defendant altogether." Id.

      Appellees' curious argument, to the effect that recognizing the service and

return of citation in this case as the hopelessly bungled job that it was is somehow

"unconstitutional", need not long detain us. Appellees do not cite a single case in

their brief suggesting that any aspect of the Texas rules regarding service and return

of citation is in violation of either the United States or Texas Constitutions. This is

understandable, since no case has ever held that these rules give a defendant too much

                                           11
due process, or a plaintiff too little. Indeed, Appellees do not even suggest a

particular clause or section of either constitution which is supposed to have been

violated. The four pages ofAppellees' Brief which are devoted to the constitutional

issue are most charitably described as filler.

      In short, ALAMO need do nothing more than it already has done to present to

this Honorable Court the fatal deficiencies inAppellees' attempted service of citation

on it in the underlying case. These defects are fully briefed and discussed in

ALAMO's Appellant's Brief herein, and include (but are by means limited to) the

unrebutted and unrebuttable failure ofAppellees to cause ALAMO or its registered

agent to be served with any petition or complaint in which it was named—or, indeed,

in which anyone other than Co-Appellant GONZALEZ FINANCIAL HOLDINGS,

INC. was named—as a Defendant. The trial court never acquired in personam

jurisdiction over ALAMO, and the default judgment must be set aside accordingly.

                                          II.

                  ALAMO IS ENTITLED TO A NEW TRIAL
                   UNDER THE CRADDOCK STANDARDS

      Appellees urge that "[wjhile Tax Lender [ALAMD] claims it did not act with

conscious indifference. Home Owner [Appellees] initially questions whether it has

properly briefed this issue. It has completely failed to discuss or otherwise explain

                                          12
what legally constitutes legal indifference, sufficient to warrant a new trial."

Appellees' Brief, at 35. This argument is not only meritless, but borders on the

specious.

      ALAMO set forth plainly and succinctly the absence of conscious indifference

on its part, and that of its principal Mr. Augustus Arellano, as follows:

      On Monday, June 16,2014 ALAMO filed its Motion for New Trial and
      its affidavit in support thereof. C.R., at 39-46, 47-48 (App. III). The
      affidavit attached in support of this motion was that of Mr. Augustus
      Arellano, President of ALAMO, who stated under oath that he first
      learned of the underlying lawsuit by DURAN on or about June 4,2014
      when he received a copy of the final default judgment from the Hidalgo
      County District Clerk, prior to which he had no knowledge that this
      lawsuit was pending against ALAMO; he had received no
      correspondence from ALAMO's registered agent informing ALAMO of
      the lawsuit. Thus, the failure ofALAMO to answer or otherwise appear
      in the case prior to the entry of the default judgment against it was a
      bona fide accident or a mistake, and not intentional or the result of
      conscious indifference...

Appellant's Brief, at 5-6. And:

      The uncontradicted affidavit of Mr. Arellano, ALAMO' s principal,
      clearly establishes the absence of intent or conscious indifference in
      ALAMO's "failure" to appear prior to the entry of a default
      judgment—ALAMO had no notice whatsoever of the fact that it had
      been sued. Indeed, even if we were to indulge in the fiction that
      ALAMO had been properly "served" by serving Corporation Service
      Company as its registered agent, notwithstanding the numerous
      discrepancies discussed hereinabove, andihatthat sendce was sufficient
      without the instruments of citation even having been forwarded to
      ALAMO, it would avail DURAN nothing: again, ALAMO would have
      been constructively informed only of the pendency of a lawsuit between

                                          13
       DURAN and GONZALEZ, involving no other parties whatsoever. The
       first prong of Craddock clearly is satisfied.

Id., at 16. Appellees' suggestion that ALAMO has not adequately addressed the

matter of "conscious indifference" is simply not to be taken seriously.

       No stronger, of course, is Appellees' following argument: "Apparently

completely unknown to Tax Lender [ALAMO], when a defaulting defendant's excuse

is his reliance on an agent, he must demonstrate that both he and his agent were free

of conscious indifference." Appellees' Brief, at 38 (emphasis in the original), citing

to Memorial Hospital System v. Fisher Insurance Agency, Inc., 835 S.W.2d 645

(Tex. App.-Houston [14a Dist] 1992, no writ) and this Honorable Court's opinion

in Sharm, Inc. v. Martinez, 900 S.W.2d 777 (Tex. App.-Corpus Christi 1995, no

writ). Appellees go so far as to offer the following lengthy quote from Memorial

Hospital regarding their contention:

       When a party relies on an agent or representative to file an answer, the
       party must establish that the failure to answer was not intentional or the
       result of conscious indifference of either the party or the agent. Thus,
       the movant cannot be relieved from a default judgment on the ground
       that it turned the petition over to its insurer and relied upon the insurer
       to file an answer, in the absence of showing why the insurer failed to
       answer. Fisher offers no reasonable explanation of why its insurance
       carrier failed to represent its interest in the present case. Furthermore,
       conscious indifference can be defined as the failure to take some action

       2Although Appellees refer to Sharm as a "no writ" case, the judgment was in fact vacated
in October, 1995.

                                              14
       which would seem indicated to a person of reasonable sensibilities under
       the same circumstances. It is reasonable to assume that when a prudent
       person is served with a petition concerning a lawsuit and is relying on
       his agent to represent his interest, he is going to make sure that his agent
       is using due diligence in handling the lawsuit. Fisher has not shown that
       its failure to file an answer was not intentional or the result of conscious
       indifference.

Memorial Hospital, at 652.

       By the very language quoted byAppellees, this rule applies when a party relies

on an agent or representative to file an answer. Our case is not a situation in which

ALAMO received a citation, turned it over to its insurer, and expected the insurer to

handle the filing of an answer. ALAMO never received a citation -which it might have

delivered to its insurer, to its lawyer, or to anyone else. As the court in Fisher

explained, "[i]t is reasonable to assume that when a prudent person is served with a

petition concerning a lawsuit and is relying on his agent to represent his interest, he

is going to make sure that his agent is using due diligence in handling the lawsuit...

." Id. (emphasis added). This rule applies, in other words, where the prudent

defendant is aware that it has been sued, of the need for some action to be taken, and

of the need to do something to monitor the activities of those on whom it is relying

to file an answer on its behalf—which must be done by the date certain that was listed

on the citation that the defendant already reviewed (or had an opportunity to review).

That never happened here, because ALAMO never had the chance to make it happen.

                                            15
       This Honorable Court's opinion in Sharm, supra likewise involved a

defaulting defendant who actually received a citation and then relied on an insurer or

other representative to file an answer: "When a defendant's excuse for failure to file

is his reliance on a third party agent or attorney to file his answer or to notify him of

a trial setting, he must similarly prove that the third party's failure was due to

accident or mistake and was not intentional or the result of conscious indifference."

Sharm, at 782 (emphasis added).

       Here it is undisputed that ALAMO's registered agent never received any

petition or citation implicating ALAMO, and ALAMO itself never received anything

whatsoever. What, exactly, would Appellees have ALAMO do—call CSC every

morning and ask to be allowed to go through its wastebaskets, looking for a petition

that doesn 't name ALAMO as a defendant but involves a transaction that ALAMO

might have been involved in, so that ALAMD can determine whether it should

investigate and monitor further? Appellees' argument has no application whatsoever

to this set of facts, and is utterly without merit.

       Appellees further argue—once again incorrectly—that the meritorious defense

set up by ALAMO is insufficient, because, even if the affidavit statements are

accepted as true (which, of course, is assumed for Craddock purposes), those

statements and the two-year limitations defense pointed out in Appellees' Brief

                                            16
pertain only to some, but not all, of the asserted causes of action. This is wrong for

at least two reasons. First, it is of course axiomatic that the "meritorious defense"

prong of Craddock need not apply to all claims and causes of action asserted; "it is

well settled that the meritorious defense prong is satisfied if it would cause a different

result upon retrial" Milestone Operating, Inc. v. ExxonMobil Corporation, 2013
WL 4007817 (Tex. App.-Houston [14th Dist.] 2013, no pet.), at *3 (emphasis in the

original). In fact, this Honorable Court recognized this mle in Sutherland v.

Spencer, 2012 WL 3761906 (Tex. App.-Corpus Christi-Edinburg 2012, no pet.), at

*2: "We conclude that the appellant's affidavits, iftme, set up meritorious defenses

in law which would negate all, or some, of Spencer's DTPA causes of action..."

(emphasis added). On the plain face of the record (Appellant's Brief, at 17), the

second prong of Craddock is satisfied before we even reach the affidavit.

      Second, however, the affidavit itself is, quite obviously, more than sufficient

to satisfy Craddock. As Mr. Arellano testified:

      The Plaintiffs allege that the failure to provide insurance on their
      properties was somehow the fault of Alamo Home Finance, Inc.
      However, when the Durans closed their loan with Alamo, they
      specifically stated they did not want insurance on the property because
      the properties were already insured. At the Plaintiffs' request, Alamo
      never contracted to purchase insurance on the Plaintiffs' behalf and
      never otherwise had a responsibility to do so.

C.R., at 60. If it is accepted as true—as it must be — that "when the Durans closed

                                           17
their loan with Alamo, they specifically stated they did not want insurance on the

property because the properties were already insured" (the alleged non-procurement

of insurance being the alpha and omega of the claims against ALAMO), Appellees

have conclusively erased liability as to all (not some) claims and causes of action:

ALAMD never contracted with Appellees to provide insurance, and the reason it did

not do so was because Appellees themselves stated they already had insurance on the

subject properties. To suggest that this does not establish a Craddock meritorious

defense is absurd.

      As Appellees pointed out on the second page of their response to ALAMD's

Motion for Submission, "Texas prefers adjudication on the merits." Just so—and that

is all ALAMO asks in this appeal. ALAMO has more than amply demonstrated its

entitlement to present its defense on the merits. ALAMO respectfully submits that

the default judgment entered against it in this case is erroneous and must be set aside.

                                      PRAYER

      WHEREFORE, PREMISES CONSIDERED, ALAMO respectfully prays that

the judgment of the trial court be reversed and remanded in its entirety to that court

for a new trial; and for such other and further relief, at law or in equity, to which

ALAMO might show itself justly entitled.

                                           18
                                       Respectfully submitted,

                                       THORNTON, BIECHLIN, SEGRATO,
                                        REYNOLDS & GUERRA, L.C.
                                       100 N.E. Loop 410, Suite 500
                                       San Antonio, TX 78216
                                       Telephone: 210/342-5555; 210/525-0666 fax

                                       By: sA^aushan E. Waters
                                       Vaughan E. Waters
                                       State Bar No. 20916700
                                       ATTORNEYS FOR APPELLANT
                                       ALAMO HOME FINANCE, INC.

                      CERTIFICATE OF COMPLIANCE

      Pursuant to Rule 9, Tex. R. App. P., the undersigned certifies that:

(1) Reply Brief of Appellant contains 4,337 words.

(2) Reply Brief of Appellant has been prepared in proportionally spaced typeface
      using Word Perfect in Times New Roman 14 point.

                                       s/ Vaughan E, Waters
                                      Vaughan E. Waters

                                         19
                         CERTIFICATE OF SERVICE

      I hereby certify that a true and correct copy of Reply to Brief ofAppellees as
to Alamo Home Finance, Inc. has been forwarded to the following this 27th day of
March, 2015.

      Via facsimile to 210/545-2130
      Mr. Adrian A. Spears
      941 Proton Rd.
      San Antonio, TX 7825 8
      Attorney for Appellant Gonzalez Financial Holdings, Inc.

      Via e-mail to beeneandricelaw@gmx.com
      Mr. Keith C. Livesay
      Livesay Law Office
      Brazos Suites No. 9
      517W.Nolana
      McAllen, TX 78504

      Via facsimile to 956/630-0383
      Mr. Francisco J. Rodriguez
      Law Offices of Francisco J. Rodriguez
      llllW.Nolana
      McAllen, TX 78504

      Attorneys for Appellees

                                      By: s/Vaushan E. Waters
                                      Vaughan E. Waters

                                        20