CE Acquisition, LLC v. On-Site Construction

Summary

The Ninth Court of Appeals of Texas reversed a default judgment against CE Acquisition, LLC and remanded for a new trial. The court held that CE Acquisition satisfied all three Craddock requirements because its failure to answer was not consciously indifferent, it presented a meritorious defense, and granting a new trial would not cause undue delay or prejudice to On-Site Construction.

Holdings

1. CE Acquisition satisfied the first Craddock factor because its uncontroverted affidavit, if true, established that it lacked knowledge of the suit and that its failure to answer was accidental rather than intentional or consciously indifferent.
2. CE Acquisition satisfied the second Craddock factor by presenting an uncontroverted affidavit and related defenses that, if believed, could cause a factfinder to reach a different result at a new trial.
3. CE Acquisition satisfied the third Craddock factor because it moved for a new trial promptly and agreed to pay On-Site's attorney's fees incurred through the hearing, demonstrating that a new trial would not cause undue delay or prejudice.
4. Because CE Acquisition satisfied all three Craddock factors, the trial court abused its discretion by denying the motion for new trial.

Questions Presented

1. Whether the trial court abused its discretion by denying CE Acquisition's motion for new trial under the three-part Craddock test.
2. Whether CE Acquisition established that its failure to answer was not intentional or the result of conscious indifference, that it had a meritorious defense, and that granting a new trial would not cause On-Site injury or undue delay.

Disposition

reversed_and_remanded