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Johnny Carroll Individually and as Trustee of the Johnny Carroll

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					                 No. 08-0644




   IN THE SUPREME COURT OF TEXAS




     Johnny Carroll, Individually and as
      Trustee of the Johnny Carroll Trust


                  Petitioner,


                      v.




  Letha Frances Carroll and Donald Carroll,


                Respondents.




From the Tenth Court of Appeals, Waco, Texas




PETITIONER'S PETITION FOR REVIEW




                           WHITAKER, CHALK, SWINDLE
                           & SAWYER, L.L.P.


                           WILLIAM BRENT SHELLHORSE
                           State Bar No. 24008022


                           3500 City Center, Tower II
                           301 Commerce Street
                           Fort Worth, Texas 76102-4186
                           (817) 878-0500
                           (817) 878-0501 (FAX)
                           ATTORNEYS FOR PETITIONER
                       IDENTITY OF PARTIES AND COUNSEL


The following is a complete list of parties to the trial court's and the court of appeals'
order from which this Petition for Review is taken, and the names and addresses of all
trial and appellate counsel:


Defendant/Petitioner
Johnny Carroll, individually and as trustee of
the Johnny Carroll Trust




       A. Trial Counsel                            B. Counsel in the Court of Appeals
       Patrick Barkman                             Appellate Counsel: same as trial counsel
       State Bar No. 24001236
       13 North Main
       Cleburne, Texas 76033
       Telephone (817) 558-4719
       Facsimile (817) 645-1313


       Mr. Carroll was also pro se
       during a portion of the lawsuit.




                                     C. Counsel in the Supreme Court
                                     Whitaker, Chalk, Swindle & Sawyer, L.L.P.
                                     William Brent Shellhorse
                                     State Bar No. 24008022
                                     3500 City Center, Tower II
                                     301 Commerce Street
                                     Fort Worth, Texas 76102-4186
                                     Telephone (817) 878-0523
                                     Facsimile (817) 878-0501
Plaintiff/Respondent
Letha Frances Carroll


      A. Trial Counsel                            B. Appellate Counsel
      S. Clinton Nix                              Appellate Counsel:
      Bradbury, Nix & Fowlkes, LLP         Bennett Brantley Aufill, III
      Texas Bar No. 15043300                      State Bar No. 01428800
      P.O. Box 59                                 58-B West Elm Street
      Abilene, Texas 79604                        Hillsboro, Texas 76645
      Telephone (325) 673-7317                    Telephone (254) 582-9725
      Facsimile (325) 673-3833                    Facsimile (254) 582-5503
      (Original trial counsel but new counsel
      substituted in prior to appeal)


      Bennett Brantley Aufill, III
      State Bar No. 01428800
      58-B West Elm Street
      Hillsboro, Texas 76645
      Telephone (254) 582-9725
      Facsimile (254) 582-5503
      (Substituted Counsel)


                                     C. Counsel in the Supreme Court
                                     Unknown


Plaintiff/Respondent
Donald Carroll


      A. Trial Counsel                            B. Appellate Counsel
      S. Clinton Nix^                             Appellate Counsel: same as trial counsel
      Bradbury, Nix & Fowlkes, LLP
      Texas Bar No. 15043300
      P.O. Box 59
      Abilene, Texas 79604
      Telephone (325) 673-7317
      Facsimile (325) 673-3833



                                     C. Counsel in the Supreme Court
                                           same as trial counsel


                                             n
                            TABLE OF CONTENTS




IDENTITY OF PARTIES AND COUNSEL                                          i


TABLE OF CONTENTS                                                   iii


INDEX OF AUTHORITIES                                                iv


KEY TO REFERENCES                                                   vi


STATEMENT OF CASE                                                    1


STATEMENT OF JURISDICTION                                            1
    Dissent                                                          1
    Conflict Jurisdiction                                            1
    Judicial Importance                                              2


ISSUES PRESENTED                                                     2
    I. Statement of Facts/Procedural History                         3
    II. Summary of Argument                                          8
    III. Argument                                                    9
          A. Is Denial by Operation of Law A Merit Based Decision    9
          B. Implied Finding Improper and Violates Due Process      10
          C.   Implied Finding Improper on This Record              12
          D. Restricted Appeal                                      15




                                       in
                               INDEX OF AUTHORITIES


 Federal Cases                                                                         pAGE


  Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80, 86, 108 S. Ct. 896, 899-900, 99 L.Ed.2d
 75, 82 (1988)                                                            1, 10,11, 14, 15, 16


 State Cases                                                                          pArr


 Carroll v. Carroll, No. 10-07-00006-CV, 2008 Tex. App. LEXIS 3492 (Waco, May 14,
 2008, pet. requested)                                                                 1,7,14


 McKanna v. Edgar, 388 S.W.2d 927, 929-30 (Tex. 1965)                                       2

 Craddock v. Sunshine Bus Lines, 143 Tex. 388, 133 SW2d 124 (Tex. 1939)                  2,10

Alexander v. Lynda's Boutique, 134 S.W.3d 845, 848-49 (Tex. 2004)                          14

Cliffv. Huggins, 724 S.W.2d 778, 779 (Tex. 1987)                                            2

Cont'l Cas. Co. v. Davilla, 139 S.W.3d 374, 379 (Tex. App.—Fort Worth 2004, pet.
denied)                                                                                    15


General Elec. Co. v. Falcon Ridge Apts., 811 S.W.2d 942, 944 (Tex. 1991)             2,10,11
                                                                                       15,16


LBL Oil Co. v. International Power Servs., Ill S.W.2d 390 (Tex. 1989)              14,15,16,

Limestone Constr. v. Summit Commer. Indus. Props., 143 S.W.3d 538, 546 (Tex.
App.—Austin 2004, no pet.)                                                                12


Mathis v. Lockwood, 166 S.W.3d 743 (Tex. 2005)                                   2,10,12,15

Smith v. Holmes, 53 S.W.3d 815, 817 (Tex. App.—Austin 2001, no pet)                       12

Wells Fargo Bank, N.A. v. Erickson, 2008 Tex. App. LEXIS 4509, at *22 (Tex.
App.—Corpus Christi June 19, 2008, no pet.) (Memorandum Opinion)                          16

Fid. & Guar. Ins. Co. v. Brewery Constr. Co., 186 S.W.3d 571, 574 (Tex. 2006)             10



                                             IV
In re Lynd Co., 195 S.W.3d 682, 684 (Tex. 2006)                       9, 10, 11,12,15

In the Matter ofthe Marriage ofBrenda May Parker, 20 S.W.3d 812, 817-18 (Tex.
App.—Texarkana 2000, no pet.)                                                        10

In the Matter ofthe Marriage ofLisa Ann Runberg, 159 S.W.3d 194, 200 (Tex.
App.—Amarillo 2005, no pet.)                                                         10

John v. Marshall Health Servs., 58 S.W.3d 738, 742 (Tex. 2001)                      7,8

L.M. Healthcare, Inc. v. Childs, 929 S.W.2d 442, 444 (Tex. 1996)                      9

Lopez v. Lopez, 757 S.W.2d 721, 723 (Tex. 1988)                               14,15,16

State Statutes                                                                  Page

Tex. Gov't Code Ann. §22.001(6)                                                    3>14

Tex. Gov't Code § 22.001(a)(l)                                                        2

State Rules                                                                     Page

Tex. R. Civ. P 306a                                                          3, 8, 9, 15

Tex. R. Civ. P 329b(c)                                                               10

Tex. R. Civ. P. 21a                                                                  14

Tex. R. Civ. P. 245                                                                  15

Tex. R. Civ. P. 71                                                                     7

Texas Rule of Civil Procedure 239a                                                 3>15
                                KEY TO REFERENCES


The references to the Record in this Petition for Review are as follows:

Clerk's Record                                    CR

Reporter's Record                                 RR [page]: [line]- [page]: [line]

Exhibit                                           Ex




                                             VI
                                     STATEMENT OF CASE


       This underlying lawsuit was filed against Johnny Carroll, in his individual capacity and that

of trustee, by his mother and brother. The honorable Lee Harris was the trial judge. The judgment

appealed from is a default judgment from an October 3, 2006 trial in which Petitioner neither

appeared nor participated. The reason is that Petitioner did not appear or participate was that he did

not receive notice ofthe hearing. Further, Petitioner was not provided notice ofthe defaultjudgment


until on or about December 4, 2006.


       Petitioner Johnny Carroll requested a new trial and filed a separate sworn pleading that he


did not receive notice of trial, as well as the date he actually received notice of the judgment. Judge

Harris conducted an evidentiary hearing after the motion for new trial had been overruled by


operation of law but before losing plenary power over the judgment.


       The appeal was before the Court of Appeals Tenth District of Texas. The justices on said


panel were Chief Justice Gray, Justice Vance, and Justice Reyna. The appellate court modified the


default judgment by deleting the award of exemplary damages, but affirmed the remainder of the


judgment, which is in excess of $1,000,000.00. Chief Justice Gray dissented, without issuing a

written opinion.    The court of appeals opinion may be cited as Carroll v. Carroll, No.

10-07-00006-CV, 2008 Tex. App. LEXIS 3492 (Waco, May 14, 2008, pet. requested).

                               STATEMENT OF JURISDICTION


       This Court has jurisdiction on any of the following grounds:


       Dissent Jurisdiction.


Chief Justice Gray dissented, without written opinion. This Court has appellate jurisdiction in cases


in which there is a dissent in the court of appeals. See Tex. Gov't Code § 22.001 (a)(l).
        Conflict Jurisdiction.


        -Court of Appeals' decision conflicts with due process requirements. Peralta v. Heights


Med. Ctr., Inc., 485 U.S. 80, 86,108 S. Ct. 896, 899-900, 99 L.Ed.2d 75, 82 (1988); GeneralElec.


Co. v. Falcon Ridge Apts., 811 S.W.2d 942, 944 (Tex. 1991).


        - Court ofAppeals' decision conflicts with requirements for new trial. Craddock v. Sunshine


Bus Lines, 143 Tex. 388,133 SW2d 124 (Tex. 1939) (establishing standard for new trial) and Cliff


v. Huggins, 724 S.W.2d 778, 779 (Tex. 1987) (extending Craddock to post-answer default.).


        - Court ofAppeals' decision conflicts with prior decision on presumption ofreceipt ofnotice.


See Mathis v. Lockwood, 166 S.W.3d 743 (Tex. 2005).


        - Court of Appeals' decision conflicts with this Court's holding on what satisfies "error on


face of the record" under a restricted appeal. General Elec. Co. v. Falcon Ridge Apts., 811 S.W.2d


942, 944 (Tex. 1991); McKanna v. Edgar, 388 S.W.2d 927, 929-30 (Tex. 1965).


       Judicial Importance.


 This case involves an error or errors of law by the court of appeals, and that error is of such


importance to the jurisprudence of the state that the error requires correction. Tex. Gov't Code Ann.


§22.001 (6). Specifically, the issues of due process, what constitutes the "record" when a Rule 306a


motion is overruled, and whether the absence of a docket notice by the clerk, as required by Texas


Rule of Civil Procedure 239a , is error on the face of the record on a restricted appeal.


                                      ISSUES PRESENTED


1.     Is the overruling of a motion by operation oflaw a merit-based action from which an implied


       finding should arise?


2.     When the trial court does not rule on a Tex. R. Civ. P 306a motion, alleging untimely notice
       of a judgment, does an implied finding against the movant as to the date notice violate due

       process?


3.     Is there a presumption that a party received notice of a default judgment and, if so, is it

       rebuttable?


4.     When a movant files a sworn Tex. R. Civ. P 306a motion that he did not timely receive

       notice of trial and notice of the resulting default judgment, does the trial court's failure to

       rule on the 306a motion allow the court of appeals to imply a finding as to the date of actual

       notice where there is an absence of evidence to support the implied finding or when an

       alternate date is established as a matter of law?

5.     Does sending notice to an address not supplied by the Defendant and not his regular place

       of employment reasonably provide notice to a Defendant, as required by due process?

6.     In a restricted appeal when jurisdiction^ facts are involved and there is a duty to ensure

       notice is given and that such notice is reflected in the record, is there error on the face of the

       record if the record fails to affirmatively indicate when notice was sent?

7.      When a movant establishes a prima facie case that he did not receive notice of trial and

       timely notice ofjudgment, may the Court of Appeals consider the evidence presented post-

        trial to determine a restricted appeal.

                            T. Statement of Facts/Procedural History


        Petitioner Johnny Carroll ("Johnny") was sued in both his individual capacity and that of

trustee. Johnny timely filed apro se answer (CR 21 -22), demanded a jury trial and paid the jury fee

 (CR 26). An amended answer was filed on March 21, 2006, at which time Johnny was represented

 by counsel (CR 84 -85).
        On August 23, 2006, the trial court allowed Johnny's counsel to withdraw. (CR 137-38)


Although the August 23 order lists pending settings, it does not mention any pending trial setting.


(CR 137-38). The Motion to Withdraw provides Johnny's last known address. (CR 125) The


Clerk's Record is devoid of any order setting trial for October 3,2006. Likewise, the Clerk's Record


is devoid of any notice of an October 3, 2006 trial being sent to Johnny. The Clerk's Record does,


however, contain an order setting a Motion for Contempt hearing for October 3, 2006 (CR 148).


        At the post-judgment hearing, Respondent Donald Carroll's counsel1 introduced evidence

that notice of trial was sent to Johnny at Heritage Lending in Dallas, Texas. (EX 2) This was an


address Respondent Donald Carroll's wife found on the internet. (2 RR 56:22 - 57:12) Prior to the


trial notice going out, Respondent and Johnny's former counsel discussed the Heritage Lending


address. (EX 1) After withdrawing due to an inability to communicate with his client, Johnny's


counsel indicated that efforts to contact Johnny at the Heritage Lending address resulted in "I have


had very little luck contacting" Johnny at the Heritage Lending location. (EX 1) It was the P.O. Box,


not Heritage, that counsel provided as Johnny's last known address. (CR 125)


        Johnny was not an employee of Heritage Lending, he was an independent contractor working


in the mortgage business.    (2 RR 24:7 - 22) Johnny did not have an office at Heritage, he had


temporary use of a cubicle that he shared with others. (2 RR 42:3-15, 24:17-22) Heritage did not


have a mail system for its independent contractors, mail was periodically thrown on a desk and


people had to come sort through it. (2 RR 47:4-24,25:6-25). Johnny did not routinely receive mail


at Heritage other than junk mail marked "loan officer" or "occupant." (2 RR 46:17-47:3, 25:6-25)




        'Although counsel originally represented both Respondents below. Respondent Letha Carroll
dismissed counsel, engaged new counsel and also asked for a new trial.
Further, Respondent Donnie Carroll admits he caused mail being sent to Johnny's post office box

to be forwarded to another post office box in another city, (2 RR 54:9-55:16, CR 127-28),which was

occurring, at least sporadically, even after Johnny filed his motion for new trial. (2 RR 48:19-49:15)

       When Johnny did not appear at trial, a defaultjudgment was signed on October 3,2006. (CR

149) Plaintiffs counsel filed a certificate of last known address listing Heritage Lending in Dallas,

Texas. (CR 150) This was not Johnny's last known address supplied to the Court by Johnny's

withdrawn counsel in connection with the Motion to Withdraw (CR 125), not the address used or

provided by Johnny in his filings (CR 21,26), the address customarily used by opposing counsel to

contact Johnny (CR 20,23,28,36,76-78,79,81), or the address used by the Court to notify Johnny

of a previous trial setting. (CR 118).

        Johnny was did not receive notice oftrial setting or the default judgment until December 4,

2006. (CR 165) He testified that he was asked by Heritage to stop his temporary use of the cubicle

and while in the process of moving, he found a notice from the court clerk with a bunch of

magazines and other things stack up in another cubicle. (2 RR 35:1-9) There is nothing showing

when Johnny received notice, like a green card, and no notation in the docket showing when notice

of the default was sent to Johnny. Even Respondent Letha Carroll did not have notice of the

judgment until December 5,2006. (CR 166) Respondent Donnie Carroll admits not informing her

of the judgment. (2 RR68:1-69:20)


       Johnny filed his motion for new trial on January 3,2007. (CR 159-161) He filed his notice

of appeal on that same day. (CR 167-168) On January 5,2007 he filed a sworn motion pursuant to
Texas Rule ofCivil Procedure 306(a), which was denominated an Amended Motion for New Trial.2

(CR162-166) The January 5,2007 sworn motion demonstrates Johnny's lack ofnotice as to the trial

setting,3 as well as the date he first received notice of the default judgment.4

       The trial court conducted a hearing on March 7, 2007 after which the trial court took the

matter under advisement. (CR 169) At the time of the evidentiary hearing, the motion for new trial

had already been overruled by operation of law, but the court still retained plenary power. The trial

court took no action on the 306a motion.

        On appeal, the appellate court held that the overruling of the 306a motion, by operation of

law, was an "implied refusal" by the trial court to find that Johnny had received notice of the

judgment more than twenty 20 after the judgment had been signed. Carroll v. Carroll, No. No.

10-07-00006-CV, 2008 Tex. App. LEXIS 3492 at *6-*7(Waco, May 14, 2008, pet. requested).

Based on this "implied finding," the Court of Appeals treated Johnny's motion for new trial as

untimely. See id. at *!-* 10. As a consequence of the finding the motion for new trial untimely, the

Court of Appeals treated Johnny's appeal as untimely and deemed his appeal as a restricted appeal.

See id. As a further result of holding the motion for new trial untimely, the appellate court refused

to consider any of the sworn pleadings and testimony establishing the absence of notice and the

actual date Johnny received notice of the judgment as part of its restricted appeal analysis. See id.

                                 II. SUMMARY OF ARGUMENT




        2See TEX. R. ClV. P. 71; see also John v. Marshall Health Servs., 58 S.W.3d 738, 742 (Tex.
2001) (recognizing separate filing of motion for new trial and a 306a motion and that a 306a motion may
be filed anytime while trial court has plenary power).

        3lt is also alleged in his January 3, 2007 Motion for New Trial.

        4Johnny was pro se at the time of the October trial.
        The court appeals refused to consider Petitioner's appeal from the denial of his motion for

new trial because the trial court failed to rule on his Tex. R. Civ. P 306a motion. Despite aprima


facie case via a sworn motion, the trial court allowed the Tex. R. Civ. P 306a motion to be overruled

by operation of law, just as the motion for new trial had been overruled.

        By allowing the motions to be overruled by operation oflaw, the court ofappeals erroneously

indulged an "implied finding" against Petitioner. Based on this implied finding, the lack of notice

and the denial of the motion for new trial escapes judicial review and violates Petitioner's due


process right. The courts below erred by failing to grant a motion for new trial based on the evidence

establishing Petitioner's right to a new trial. The court ofappeals erred by "implying findings" based

on the trial court's inaction and then finding the motion for new trial untimely, treating the appeal

as a restricted appeal, and refusing to consider evidence offered at the motion for new trial.

                                          TTT. ARGUMENT


        Petitioner Johnny Carroll ("Johnny") did not receive notice of an October 3,2006 trial setting

(CR 165).    Johnny also did not receive notice of the October 3, 2006 default judgment until


December 4,2006 (CR 165-66; 2 RR 35:1 -9). Johnny timely filed a motion for new trial on January


3,2007 and also timely filed a sworn Tex. R. Civ. P 306a motion on January 5,2007. (CR 159-66)

See John v. Marshall Health Servs., 58 S.W.3d 738,742 (Tex. 2001) (holding that a separate 306a

motion, filed after a motion for new trial, is timely so long as filed while trial court has plenary

power); In re Lynd Co., 195 S.W.3d 682, 684 (Tex. 2006) (same).


        On March 7, 2007, after the motion for new trial had been overruled by operation of law,5




        5A motion for new trial is overruled by operation on the 76th day following judgment. See TEX.
R. Civ. P 329b(c). Using the substituted date, the motion was denied 18 days before the hearing.


                                                    7
the trial court conducted an evidentiary hearing and took the matter under advisement (CR 169).

The trial court lost plenary power twelve days later. See L.M. Healthcare, Inc. v. Childs, 929 S.W.2d

442, 444 (Tex. 1996). The court of appeals denied Johnny's request for a new trial reasoning that

because the trial court had refused to act on his Tex. R. Civ. P 306a motion, Johnny's appeal was

untimely.


                  A. Is Denial bv Operation of Law A Merit Based Decision

       All post-judgment motions are not created equal, some require sworn pleadings and some

require an evidentiary hearing. Likewise, all actions on post-judgment motions are not the same.

When a motion is overruled as the result of a sheer lapse of time, this is not the same as a trial court

affirmatively acting on a motion. It is an automatic, ministerial disposition in the absence of action.

While the trial court's affirmative denial of a motion may, in some instances, give rise to implied

findings, a trial court's inaction should not. Denial by operation of law is not a merit-based action,

it is purely a time-based disposition.

        Although this Court has allowed an implied finding on the date ofnotice when the trial court

grants a new trial, this Court has not authorized implied findings as to the date a party receives

notice when the trial court allows a motion to be overruled by operation of law. See In re Lynd Co.,

195 S.W.3d at 685. As applied in this case, creating such an implied finding violates due process

because it hampers Johnny with undue burdens in attacking an adverse judgment. See General Elec.

Co. v. Falcon Ridge Apts., 811 S.W.2d 942, 944 (Tex. 1991).

                    R. Implied Finding Improper and Violates Due Process


        If the answer to the question why a defendant did not appear at trial is a failure to receive

notice, the judgment generally must be set aside. See Fid. & Guar. Ins. Co. v. Drewery Constr. Co.,
186 S.W.3d 571,574 (Tex. 2006) (citations omitted).6 Johnny established a violation ofdue process,


that his motion for new trial was timely, and his right to a new trial under Craddock, based on lack

of notice. It was, therefore, a violation of due process and an abuse of the trial court's discretion to

allow the motion for new trial to be overruled. See Mathis v. Lockwood, 166 S.W.3d 743, 745-46

(Tex. 2005) (dispensing with elements of Craddock test when defaulted party not given notice of

trial setting); Lopez v. Lopez, 757 S.W.2d 721, 723 (Tex. 1988) (same); In the Matter of the

Marriage ofLisa Ann Runberg, 159 S.W.3d 194,200 (Tex. App.—Amarillo 2005, no pet.) (same);

In the Matter of the Marriage of Brenda May Parker, 20 S.W.3d 812, 817-18 (Tex.

App.—Texarkana 2000, no pet.) (same); Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80, 86,108 S.

Ct. 896, 899-900, 99 L.Ed.2d 75, 82 (1988).


        These constitutional safeguards should apply equally to a failure to timely receive notice of

the judgment, so that a party is receives notice at a meaningful time and in a meaningful manner that

would give him an opportunity to be heard and protect his interests, including on appeal. See

Peralta, 485 U.S. at 86. While Texas Rule of Civil Procedure 239a provides a safeguard by

imposing an obligation on the court clerk to (i) send notice of the judgment and (ii) "note the fact

of such mailing on the docket," the evidence is that Johnny did not receive the letter on December

4,2006, at a temporary business location where he shared a cubicle with others. (2 RR 35:1 -9,42:3-


15,24:17-22)


        Just as with notice ofa trial, there should be no presumption that notice ofa defaultjudgment




          6There is no presumption of service in this case because Respondent did not transmit notice of
the trial in accordance with TEX. R. Civ. P. 21 a. Service was apparently be standard mail, as opposed to
certified or registered mail. (EX 2) There is no green card, so no presumption should arise. See Mathis
v. Lockwood, 166 S.W.3d 743, 745-46 (Tex. 2005).
was properly sent or received, when the record is silent as to when notice was received and receipt

is denied until a date certain (December 4, 2006). The court of appeals' implied finding had a

devastating domino effect on Johnny's appeal. Effectively, the court of appeals' decision allows the

trial court's inaction on the motion for new trial and the 306a motion wholly escape judicial review

and denies Johnny his right to due process. As applied in this case, creating such an implied finding

violates due process because it hampers Johnny with undue burdens in attacking an adverse

judgment. See General Elec. Co., 811 S.W.2dat944.


                         C.   Implied Finding Improper on This Record


        Even an implied finding, if one exists, can be challenged. In re Lynd Co., 195 S.W.3d at

686. The court of appeals stated that the trial "court heard conflicting testimony on the issue of

whether Johnny received notice on December 4 or within twenty days after judgment." Johnny's

motion for new trial was "prima facie case that [he] lacked timely notice." In re Lynd Co., 195

S.W.3d at 684; Limestone Constr. v. Summit Commer. Indus. Props., 143 S.W.3d 538, 546 (Tex.

App.—Austin 2004, no pet.); Smith v. Holmes, 53 S.W.3d 815, 817 (Tex. App.—Austin 2001, no

pet). The trial court was obliged to accept Johnny's statements as true. See Limestone Constr., 143

S.W.3d at 546; Smith, 53 S.W.3d at 817.

        At best, the record shows notice was sent to an address where Johnny had temporary use of

a cubicle that he shared with others and that he did not routinely receive mail at that location. (2 RR

46:17-47:3, 25:6-25) The evidence also shows that Respondents attempted to serve Johnny with a

Motion for Contempt at the Heritage Lending location, a hearing on which was to occur on the same

date as the proposed trial. (CR 139-141) Admittedly Johnny could not be served with notice of the

Contempt hearing at the Heritage Lending as of October 3, 2006. (RR 4:17-18).


                                                  10
       The only evidence in the record of Johnny's receipt of the notice of default and trial setting

was his testimony that he found the clerk's letter on December 4,2006. Receipt and transmittal are

not the same. See Mathis, 166 S.W.3d at 745. While compliance with Texas Rule 239a may create

a presumption oftransmittal and, therefore, receipt, the prerequisites forprimafacie proofof service

were not met. In the absence of docket notation, a certificate of service, or green card showing

receipt of notice of the default judgment, no presumption exists or should exist that notice of trial

was received. See Mathis, 166 S.W.3d at 745. Just as with notice of a trial, there should be no

presumption that notice of a default judgment was sent or received, when the record is silent as to

when notice is sent and receipt is denied until a date certain (December 4, 2006).

        Even a presumption ofreceipt can be rebutted. See id. Evidence that a notice was sent does

not establish that notice was received or create conflicting evidence on the issue of receipt. See id.

 Even if the trial court disbelieved Johnny as to the date he received notice of the judgment, in the
 absence ofprimafacie proofto create a presumption as to the date ofreceipt, there is no affirmative

 evidence that notice of the judgment occurred timely. See id. On this record, Johnny's appeal was

 timely and he is entitled to a new trial and should not barred from doing so based on an improper

 "implied finding."

         Furthermore, notice must be in a meaningful manner that would give Johnny an opportunity

 to be heard and protect his interests. See Peralta, 485 U.S. at 86. The circumstances of this case

 demonstrate that sending a notice to Heritage Lending did not provide notice to Johnny in a

 meaningful manner that would reasonably notify ofthe trial or thejudgment, so that he could protect

 his interests. (2 RR 56:22 - 57:12, 24:7 - 22, 42:3-15, 47:4-24, 25:6-25, 46:17-47:3, 54:9-55:16,

  48:19-49:15) To indulge an inference that notice was timely and meaningful on this record is error.


                                                   11
                                         P. Restricted Appeal


       Even if Johnny's appeal is a restricted appeal, the appellate court improperly concluded that

no error existed on the face of this record. What constitutes the "record," when the trial court does

not grant a 306a motion is a question ofjudicial importance in this case.

       The court of appeals characterized the record as "silent regarding whether proper notice [of

the trial] was provided to Johnny." Carroll, 2008 Tex. App. LEXIS 3492, at *12. The appellate

court then relied on Alexander v. Lynda's Boutique, 134 S.W.3d 845, 848-49 (Tex. 2004) and

General Elec, 811 S.W.2d at 943-44 to concluded that silence did not establish error on its face.

General Elec, 811 S.W.2d at 943-44. The court's reliance on these opinions is misplaced and

conflicts with this Court's holdings.

        While the General Electric Court held silence as to notice was not evident error, it did so in

the context of a motion to dismiss for want of prosecution. See id. The General Electric Court

expressly distinguished its holding from cases involving jurisdictional facts and also from cases

where a duty exists to affirmatively reflect notice on the record. See id. As one example, the

General Electric Court noted cases involving default judgments because the record is required to

affirmatively reflect notice was sent. See id at 943 (citing LBL Oil Co. v. International Power

Servs., Ill S.W.2d 390 (Tex. 1989) (per curiam) (no certificate as to service of motion for default

judgment as required by Tex. R. Civ. P. 21a); Lopez v. Lopez, 757 S.W.2d 721 (Tex. 1988) (per

curiam) (no certificate as required by Tex. R. Civ. P. 245)).

        This case involves both jurisdictional facts7 and a duty imposed by Texas Rule of Civil



        7It is undisputed that a Rule 306a(5) is jurisdictional in nature. See Cont'l Cas. Co. v. Davilla,
139 S.W.3d 374, 379 (Tex. App.—Fort Worth 2004, pet. denied).

                                                     12
Procedure 245 on the clerk to affirmatively send and reflect transmittal notice of the default

judgment service on the docket. Therefore, it the record is silent as to notice, it is error on the face

of the record in this case under General Electric, LBL Oil Co., and Lopez}

        The court of appeals' characterization as to "silence in the record" on the issue of notice is

based on its refusal to consider testimony offered at the March 7,2007 hearing. That evidence does

not show "silence" of notice, it shows whatever notice was sent in a manner that deprived Johnny

of due process. See Peralta, 485 U.S. at 86. Further, there is not a presumption of proper notice of

a trial setting in the absence of compliance with Rule 21a. See Mathis, 166 S.W.3d at 745. The

record, as shown at the hearing, shows that the notice of the trial setting was not sent in a manner

that would create a presumption ofreceipt under Rule 21 a. The trial notice, in addition to being sent

to a suspect address, was not sent by either registered or certified mail, as required by Rule 21a in

order to create a presumption of receipt. See Mathis, 166 S.W.3d at 745. Thus, the record before

the trial court evidenced error on its face.

         The evidence adduced at the March 7 hearing was clearly before the trial court, as a result

 of Johnny's sworn Rule 306a motion. See In re Lynd Co., 195 S.W.3d at 685 (holding court has

jurisdiction to conduct hearing based on filing of sworn motion). Thus, the concerns underlying

 extrinsic evidence first admitted in the trial court are not raised and should not preclude the court of

 appeals from considering such evidence as part of the "record." See General Elec, 811 S.W.2d at

 944.

         Johnny proffered evidence in the time and manner prescribed by the Texas rules and case



          "Several courts of appeals have held Texas Rule of Civil Procedure 239a is administrative and
 the clerk's failure to comply with the rule cannot be considered on a restricted appeal.

                                                     13
law, the trial court improperly failed to act on his motions. As a result of the trial court's inaction,

the court ofappeals refused to consider the very evidence that would establish whether the trial court

erred, as well as whether Johnny had been provided proper notices as required by due process. Once

a defendant has made an appearance in a cause, he is entitled to proper notices of trials and other

matters under the Fourteenth Amendment to the federal constitution. See LBL Oil Co., Ill S.W.2d

at 390-91; Lopez, 757 S.W.2d at 723; see also Peralta, 485 U.S. at 84-85.

        The law should promote, not frustrate, attempts to correct erroneous judgments. See Wells

Fargo Bank, N.A. v. Erickson, 2008 Tex. App. LEXIS 4509, at *22 (Tex. App.—Corpus Christi June

19,2008, no pet.) (Memorandum Opinion). By failing to consider the testimony offered at the post-

trial hearing as part of the record, the court of appeals improperly hampered Johnny with undue

burdens in attacking an adverse judgment. See General Elec, 811 S.W.2d at 944 (citing Peralta,

485 U.S. at 86). It extinguished his right to present evidence to challenge the denial of due process.

                                               PRAYER


        Petitioner requests that this Court grant review and order a new trial or, in the alternative,

remand to Court of Appeals with instructions.



                                                         Respectfully submitted,


                                                         WHITAKER, CHALK, SWINDLE
                                                         & SAWYER, L.L.P.




                                                By:_
                                                         WILLIAM BRENT SHELLHORSE
                                                         State Bar No. 24008022


                                                         3500 City Center, Tower II
                                                         301 Commerce Street



                                                    14
                                                      Fort Worth, Texas 76102-4186
                                                      (817)878-0523
                                                      (817) 878-0501 (FAX)
                                                      ATTORNEYS FOR PETITIONER




                                  CERTIFICATE OF SERVICE


        This is to certify that on the undersigned date, a true and correct copy of the foregoing
Petition for Review was sent by U.S. mail, postage prepaid, certified mail, return receipt requested
to:




       Bradbury, Nix & Fowlkes, LLP                   Bennett Brantley Aufill, III
       Texas Bar No. 15043300                         State Bar No. 01428800

       P.O. Box 59                                    58-B West Elm Street

       Abilene, Texas 79604                           Hillsboro, Texas 76645
       Telephone (325) 673-7317                       Telephone (254) 582-9725
       Facsimile (325) 673-3833                       Facsimile (254) 582-5503




Signed this             day of November, 2008.




                                                                  Brent Shellhorse




                                                 15
                 No. 08-0644




   IN THE SUPREME COURT OF TEXAS




      Johnny Carroll, Individually and as
      Trustee of the Johnny Carroll Trust


                  Petitioner,


                      v.



   Letha Frances Carroll and Donald Carroll,


                 Respondents.



 From the Tenth Court of Appeals, Waco, Texas




APPENDIX IN SUPPORT OF PETITIONER'S
         PETITION FOR REVIEW




                           WHITAKER, CHALK, SWINDLE
                           & SAWYER, L.L.P.


                           WILLIAM BRENT SHELLHORSE
                           State Bar No. 24008022


                           3500 City Center, Tower II
                           301 Commerce Street
                           Fort Worth, Texas 76102-4186
                           (817) 878-0500
                           (817) 878-0501 (FAX)
                           ATTORNEYS FOR PETITIONER
                 APPENDIX TABLE OF CONTENTS



Trial Court's Judgment                        TAB 1



Court of Appeals' Opinion                     TAB 2
                                                  NO. 43,916 L.

   LETHA FRANCES CARROLL
                                                                         66* DISTRICT COURT
   and DONALD CARROLL
                                                           §
                                                           §
   V.
                                                                         IN AND FOR

  JOHNNY CARROLL,
                                                       §
  INDIVIDUALLY AND AS TRUSTEE                          ^
  OF THE JOHNNY CARROLL, TRUSTEE                       §                 'HILL COUNTY, TEXAS

                                                JUDGMENT


  PU» fff            ?■ '        ' Came t0 bC heaXd the ab°Ve numbered ^ styled c^se of action
  Plaintiffsappeared in person and by and through their attorney ofrecord, S.ClintonNix. Defendant"
  alhoughdulycitedtoaPpear,hasmadenoanswerherein.Withnopartyrequestingajurythiscause
 is heard by the Court, and after consideration ofthe evidence presented, the testimony oT'^taesses
 and argument of counsel, the Court finds that judgment should be rendered for the Sffi
         IT ISI THEREFORE ORDERED that Letha Frances Carroll and Donald Canoll Plaintiffs
 shall havejudgment against Johnny Carroll, individually and as Trustee of the Johnny Carroll Trust'
 Defendant, as follows:                                                                         ^usi,



         1. that Plaintiffs shall have judgment against Defendant for the sum

         2. that Plaintiffs shall have judgment for the amount of$_ /fr cCc. ^ as attorney's fees;

         3. that Plaintiffs shall have judgment for postjudgment interest of 6.25% per annum;

        4. that Plaintiffs shall have judgment for all costs of court;


damages-'                               judgment f°r the smmnt of                      f   exemplary



        6. that Plaintiffs shall have all writs necessary to enforce this judgment;

        7. that all relief not granted herein is denied.

        SIGNED on L/Cfe Q>A .3                                 , 2006.



                                               Judge presiding

                                           \



                                                                                           Page-149-
                                                                                                                           Page 1




                                                  5 of 8 DOCUMENTS


                 JOHNNY CARROLL, INDIVIDUALLY AND AS TRUSTEE OF THE JOHNNY
                 CARROLL TRUST, Appellant v. LETHA FRANCES CARROLL AND DONALD
                                                  CARROLL, Appellees


                                                   No. 10-07-00006-CV u-


                             COURT OF APPEALS OF TEXAS, TENTH DISTRICT, WACO

                                                2008 Tex. App. LEXIS 3492



                                         --May 14, 2008, Opinion Delivered
                                              May 14, 2008, Opinion Filed


SUBSEQUENT HISTORY:                As Corrected June 17,       finding of fraud is not supported by the pleadings or the
                                                               evidence; (4) the evidence is factually insufficient to
2008.
                                                               prove actual damages; and (5) Donald had no authority to
PRIOR HISTORY:             [*1]                                seek damages on Letha's behalf. We will modify the
   From the County Court at Law, Hill County, Texas.           judgment by deleting the award of exemplary damages
Trial Court No. 43,916. A. Lee Harris, Judge.                  and affirm the judgment as modified.


                                                               Background
DISPOSITION:         Affirmed as modified.

                                                                    The Johnny Carroll Trust was created for the benefit
                                                               of Letha (Johnny's mother) after her husband Ray's death.
JUDGES: Before Chief Justice Gray, Justice Vance, and
                                                               Letha and Donald (Johnny's brother) filed this suit
Justice Reyna. Chief Justice Gray dissents. A separate
                                                               alleging that Johnny [*2] had breached his fiduciary duty
opinion will not issue.
                                                               as   trustee   by    failing   to provide   an     accounting,     by
                                                               self-dealing, by allowing the waste of trust assets, and by
OPINION BY: FELIPE REYNA ~/
                                                               failing to file income tax returns. They requested that the
                                                               court remove Johnny as trustee and award damages for
OPINION
                                                               his alleged misconduct.

                                                                    The court removed Johnny from his position as
CORRECTED MEMORANDUM OPINION1
                                                               trustee   by   partial    summary judgment.          In    its   final
        1   We issue this corrected memorandum opinion         judgment signed October 3, 2006, the court awarded
        in place of the Court's original memorandum            Letha and Donald $ 1 million in actual damages, S 15,000
        opinion dated May 14, 2008 to correctly identify       in   attorney's     fees, and $    2.8   million    in    exemplary
        the trial court.                                       damages.


     Johnny Carroll, Individually and as Trustee of the             Johnny filed a motion for new trial on January 5,
Johnny Carroll Trust, brings this appeal from a default        2007 alleging: (1) he did not receive notice of the
judgment rendered in favor of Letha Frances Carroll and        October 3 trial setting; (2) he did not receive notice of the
Donald Carroll. Johnny contends in five issues that: (1)       default judgment until December 4; (3) there                     is no
the court erred by failing to grant his motion for new trial   evidence to support the amount of actual or exemplary
because he did not receive proper notice of the trial          damages awarded; and (4) Letha "did not consent to the
setting; (2) the court's award of exemplary damages is not     trial or the judgment." Johnny filed an amended motion
supported by the pleadings or the evidence; (3) the court's    two days later which contains the same allegations but
                                                                                                                                                                Page 2
                                                                 2008 Tex. App. LEXIS 3492, *2




further       alleges     that    the     judgment          is     against      the             judgment. If a motion for sanctions                        is
overwhelming weight of the evidence and is excessive.                                           pending when a final judgment is signed,
The    amended motion              is   also   supported           by    Johnny's               the trial court has until the expiration of its
affidavit and Letha's affidavit. Johnny filed his notice of                                     plenary power, 30 to 105 days, to enter an
appeal on January 8. [*3]                                                                       order on the motion or it loses jurisdiction
                                                                                                to do so. When a motion for sanctions is
      The court conducted a hearing on Johnny's motion                                          filed   following        the   entry       of    a     final
for new trial on March 7, 2007 but allowed the motion to                                       judgment,       the    motion     is    treated        as   a
be overruled by operation of law.                                                               motion to modify, correct, or reform the
                                                                                                existing judgment within the meaning of
Finality of Judgment
                                                                                                rule of civil procedure 329b(g).

      An issue not raised by the parties is whether the
                                                                                      Mantri, 153 S.WJd at 717-18 (citations omitted).
judgment is a final judgment. We raise the issue because,
the day after the court signed the judgment, the court
                                                                                             The Dallas Court has previously explained that a
signed an order setting a hearing on Letha's and Donald's
                                                                                      judgment is final when it disposes of all the parties and
motion for contempt which they filed because of Johnny's
                                                                                      claims raised by the "pleadings."               [*5] Jobe v. Lapidus,
failure to appear for a deposition.
                                                                                      874     S.W.2d    764,    765   (Tex.    App.-Dallas             1994,      writ
                                                                                      denied); accord In re Velte, 140 S.WJd 709, 711 (Tex.
      With some exceptions not here applicable, this Court
                                                                                      App.—Austin       2004,    orig.    proceeding).           However,         "[a]
has   jurisdiction        over    an     appeal      from        only     a   final
                                                                                      motion is not at the same level as a pleading," and "[a]
judgment. 2 Sanders v. City of Grapevine, 218 S.WJd
                                                                                      trial court's failure to rule on a motion has no bearing on
772, 776 (Tex. App.-Fort Worth 2007, pet. denied); N.P.
                                                                                      the finality of a judgment." Jobe, 874 S. W.2d at 765-66;
v.    Methodist         Hosp.,     190     S.WJd       217,         225       (Tex.
                                                                                      accord Velte, 140 S. WJdat 711.
App.--Houston [1st Dist.J 2006, pet. denied)', see also
Lehmann v. Har-Con Corp., 39 S.WJd 191,                                 195 (Tex.
                                                                                             The same principles apply here. Letha's and Donald's
2001) (generally, "an appeal may be taken only from a
                                                                                      pending motion        for contempt        did    not       make the trial
final judgment"). "A judgment is final for purposes of
                                                                                      court's judgment interlocutory. See Lane Bank Equip. Co.
appeal if it disposes of all pending parties and claims in
                                                                                      v. Smith S. Equip., Inc., 10 S.WJd 308, 312 (Tex. 2000);
the record." Lehmann, 39 S.WJd at 195; see also N.P.,
                                                                                      Mantri, 153 S.WJd at 717-18. Rather, the trial court had
190 S.WJd at 225. Because this issue affects this Court's
                                                                                      only until the expiration of its plenary power to rule on
jurisdiction, we may address it sua sponte. See N.P., 190
                                                                                      the motion. Because the court did not rule on the motion,
S.WJd at 225;            Tanner v.       Karnavas,      86 S.WJd              737,
                                                                                      it lost jurisdiction to do so thirty days after the judgment.
743-44 &nJ (Tex. App.-Dallas 2002, pet. denied).
                                                                                      And therefore, because the judgment is final, we have
                                                                                      jurisdiction over this appeal. See Lehmann, 39 S.WJd at
          2      This     [*4] Court also has jurisdiction over
                                                                                      195; Sanders, 218 S.WJd at 776; N.P., 190 S.WJd at
          certain appeals from interlocutory orders, but only
                                                                                      225.
          when explicitly provided by statute. Tex. A&M
           Univ. Sys. v. Koseoglu, 233 S. W. 3d 835, 840 (Tex.
                                                                                      Scope of Appeal
          2007).

                                                                                             At the hearing on the motion for new trial, Johnny
      The procedural posture of this case is very similar to
                                                                                      invoked Rule of Civil Procedure 306a. That rule provides
that presented to the Dallas Court of Appeals in Mantri v.
                                                                                      in pertinent part:
Bergman, 153 S.WJd 715 (Tex. App.-Dallas 2005, pet.
denied).      There, the        court    considered     the        effect     of a
                                                                                                 If within twenty days after the judgment
pending       motion      for    sanctions      on    the        finality     of a
                                                                                               or other appealable         [*6] order is signed, a
judgment.
                                                                                               party    adversely      affected       by    it   or     his
                                                                                               attorney    has neither received            the       notice
               Unlike a pending cause of action, a
                                                                                               required by paragraph (3) of this rule nor
          pending       motion     for sanctions        does        not
                                                                                               acquired actual knowledge of the order,
          make     interlocutory         an    otherwise-final
                                                                                               then with respect to that party all the
                                                                                                                                                                      Page 3
                                                                 2008 Tex. App. LEXIS 3492, *6




            periods mentioned in paragraph (1) shall                                       a     notice        of     appeal       within        the     time
            begin on the date that such party or his                                       permitted          by Rule 26.1 (a),             may        file       a
            attorney received such notice or acquired                                      notice of appeal within the time permitted
            actual     knowledge           of        the        signing,                   by Rule 26. l(c). Restricted appeals replace
            whichever occurred first, but in no event                                      writ    of        error    appeals      to     the    court        of
            shall such periods begin more than ninety                                      appeals. Statutes pertaining                   [*8] to writ of
         days after the original judgment or other                                         error appeals to the court of appeals apply
         appealable order was signed.                                                      equally to restricted appeals.


TEX. R. CIV. P. 306a(4). The movant bears the burden of
proving: (1) the date he or his counsel first received
                                                                                  TEX. R. APP. P. 30.
notice or acquired actual knowledge of the judgment; and
(2) that this date was more than twenty days after the
                                                                                        Notice of appeal in a restricted appeal must be filed
judgment was signed. Id. 306a(5).
                                                                                  within six months after the date the judgment is signed.
                                                                                  TEX.    CIV.    PRAC.          &         REM.    CODE          ANN.         §       51.013
     The court heard conflicting testimony on the issue of
                                                                                  (Vernon 1997); TEX. R. APP. P. 26.1 (c). Johnny's notice
whether Johnny received notice on December 4 or within
                                                                                  of appeal is timely because it was filed a little more than
twenty days after judgment. Because the court allowed
                                                                                  three months after the judgment was signed.
the motion to be overruled by operation of law, the court
impliedly refused to find that Johnny received notice
                                                                                        It is undisputed that Johnny did not participate in the
more than twenty days after the judgment was signed. 3
                                                                                  trial which resulted in the default judgment against him.
See In re Estate of Wilson, No.                  06-07-00084-CV, 252
                                                                                  Therefore, the only issue for consideration is whether
S.W.3d       708,    2008 Tex.      App.    LEXIS 2482,              2008   WL
                                                                                  there are any errors apparent on the face of the record.
941778, at *1 n.2 (Tex. App.-Texarkana Apr. 9, 2008, no
                                                                                  Ilubicki v. Festina, 226 S. W.3d 405, 407 (Tex. 2007) (per
pet. h.)\     [*7J see also Gee v. Lewisville Mem'l Hosp.,
                                                                                  curiam).
Inc., 849 S.W.2d 458, 460 (Tex. App.-Fort Worth 1993,
writ denied) (discussing trial court's implied finding that                             The "record" for purposes of a restricted appeal is
hospital did not receive notice of judgment until more                            generally defined as the reporter's record and all papers
than twenty days after judgment). Thus, Johnny's motion                           on file with the trial court clerk before final judgment.
for new trial was untimely. See Wilson, 2008 Tex. App.                            See Alexander v.             Lynda's Boutique,                134 S.W.3d 845.
LEXIS 2482, 2008 WL 941778, at *1 n.2.                                            848-49 (Tex. 2004) (quoting Gen. Elec.                           Co.    v. Falcon
                                                                                  Ridge Apartments,            811 S.W.2d 942,              944 (Tex.             1991));
         3      Johnny does not challenge the trial court's
                                                                                  Wilson, 2008 Tex. App. LEXIS 2482, 2008 WL 941778, at
         implied refusal to find that he received notice
                                                                                  *1;    Cordero        v.     Am.         Home      Assurance            Co.,          No.
         more than twenty days after the judgment was
                                                                                  08-04-00109-CV, 2005 Tex. App. LEXIS 3385, 2005 WL
         signed.       See    In    re     Estate          of    Wilson,    No.
                                                                                  1077456, at *2 (Tex. App.-El Paso May 5, 2005, no
         06-07-00084-CV, 2008 Tex. App. LEXIS 2482,
                                                                                  pet.). As the Supreme Court                      [*9]    has explained, the
         2008 WL 941778, at                *2 (Tex. App.-Texarkana
                                                                                  appropriate     avenue             for    the    inclusion       of     additional
        Apr. 9,2008, no pet. h.).
                                                                                  evidence is by motion for new trial or the filing of an
                                                                                  equitable bill of review. Alexander, 134 S.W.3d at 848
    Because Johnny did not file a timely postjudgment
                                                                                  (citing Gen. Elec, 811 S. W.2d at 944).
motion, this is a restricted appeal under Rule ofAppellate
Procedure 30, which provides:
                                                                                        Although    the        "record"       in   a restricted          appeal         has
                                                                                  generally been described as including only those matters
              A party who did not participate—either
                                                                                  made part of the trial record before final judgment, we
        in     person    or    through          counsel-in          the
                                                                                  presume from the Supreme Court's reference to a motion
        hearing       that    resulted     in    the       judgment
                                                                                  for new trial     in Alexander and                 General Electric that
        complained of and who did not timely file
                                                                                  evidence admitted pursuant to a motion for new trial
        a     postjudgment         motion       or    request       for
                                                                                  made timely by an appropriate finding under Rule 306a
        findings of fact and conclusions of law, or
                                                                                  could also be included in such a record. 4 See id.
                                                                                                                                                                Page 4

                                                              2008 Tex. App. LEXIS 3492, *9




          4       We refer here only to motions for new trial                                    to a jury trial pursuant to his jury demand; (4) the
          made timely under Rule 306a because, if the party                                      court erred in awarding exemplary damages in
          complaining of the judgment filed a motion for                                         excess of the amount permitted by section 41.008

          new trial within 30 days after judgment, such                                          of the Civil Practice and Remedies Code; (5) the
          party would pursue a direct appeal rather than a                                       court erred in awarding actual damages "on the
          restricted         appeal.       See   TEX.   R.    APP.         P.    30              presumed       mismanagement            of     assumed           trust

          (restricted appeal available only to a party "who                                      property"; and (6) the court erred in awarding
          did     not timely             file a postjudgment motion or                           attorney's fees to Donald's counsel.
          request for findings of fact and conclusions of
                                                                                             "A party who seeks to alter the trial court's judgment
          law,     or    a        notice   of appeal       within    the        time
                                                                                       or other appealable order must file a notice of appeal."
          permitted by Rule 26.1 (a)"). While it would be
                                                                                       TEX. R. APP. P. 25.1 (c). Because Letha did not file a
          theoretically possible for a party to file                   [*10] a
                                                                                       notice    of appeal,       she    has   not   invoked          this   Court's
          motion for new trial made timely under Rule 306a
                                                                                       jurisdiction to address her points of error. See City of
          and pursue a direct appeal, such party would still
                                                                                       Houston      v.   Boyle,    148     S.WJd        171,    175       n.5    (Tex.
          be limited to a restricted appeal if that party did
                                                                                       App.-Houston [1st Dist.J 2004, no pet.);                      |*12] Gore v.
          not file a notice of appeal within 90 days after the
                                                                                       Scotland Golf, Inc., 136 S.WJd 26, 34 (Tex. App.-San
          judgment. Id. 26.1 (a) (notice of appeal must filed
                                                                                       Antonio 2003, pet. denied). Therefore, we dismiss her
          within 90 days after judgment if party timely files
                                                                                       points    for     want     of    jurisdiction.     See        Krumnow         v.
          a post-judgment motion).
                                                                                       Krumnow, 174 S.WJd 820, 826 (Tex. App.-Waco 2005,
    Here, Johnny relies in part on the testimony he                                    pet. denied).
offered       at the    hearing on his motion                for new trial.
                                                                                       Notice of Trial Setting
However, because his motion was untimely and because
he does not challenge the court's implied refusal to find
                                                                                             Johnny contends in his first issue that the court
that he received notice more than twenty days after the
                                                                                       abused its discretion by failing to grant his motion for
judgment was signed, this testimony should be treated no
                                                                                       new trial because he did not receive proper notice of the
differently than the affidavit of counsel in Alexander
                                                                                       trial setting. We have already determined that Johnny's
which counsel filed directly with the Supreme Court and
                                                                                       motion for new trial was untimely. Nevertheless, we will
which     the      Supreme           Court    refused   to    consider.          See
                                                                                       address the subsidiary issue presented, namely, whether it
Alexander, 134 S.WJd at 848. Therefore, we will not
                                                                                       is apparent from the face of the record that Johnny did
consider Johnny's testimony in this restricted appeal.
                                                                                       not receive proper notice of the trial setting. See TEX. R.
                                                                                       APP. P. 38.1 (e) ("The statement of an issue or point will
Letha's Appellate Points
                                                                                       be treated as covering every subsidiary question that is
    Although            the       judgment       appears     to     have        been   fairly included.").
rendered in Letha's favor, 5 she presents six points of
                                                                                             The record is silent regarding whether proper notice
error in her appellate brief 6 and requests reversal of the
                                                                                       was provided to Johnny. When the record is silent on this
judgment. However, Letha did not file a notice of appeal.
                                                                                       issue, "there is no error apparent on the face of the
          5        At trial, the same counsel who represents                           record." Alexander, 134 S.WJd at 849 (citing Gen. Elec,
          |*11] Donald in this appeal appeared before the                              811      S.W.2d    at    943-44).       Accordingly,          we      ovemile
          trial     court           as     Donald's     counsel        and        as   Johnny's first issue.

          attomey-in-fact for Letha pursuant to a power of
                                                                                       Donald's Authority
          attorney. We are given no explanation regarding
          why Letha is represented by different counsel on
                                                                                             Johnny contends in his fifth issue that Donald had
          appeal.
                                                                                       [*13] no authority to seek damages on Letha's behalf
          6       Letha's six points are: (1) the court erred in
                                                                                       This is a challenge to Donald's capacity to sue on Letha's
          awarding            a    default    judgment       without       proper
                                                                                       behalf. See Austin Nursing Or.,                  Inc.    v.    Lovato.      1~1
          notice to Letha or Johnny; (2) the court abused its
                                                                                       S.WJd 845, 849 (Tex. 2005).
          discretion by denying Johnny's motion for new
          trial; (3) the court erred by denying Johnny's right
                                                                                                                                   Page 5

                                              2008 Tex. App. LEXIS 3492, *13




    Under Rule of Civil Procedure 93(1), a challenge to          2007, pet. denied) (quoting Checker Bag Co. v.
                                                                 Washington, 27 S.WJd 625, 633 (Tex. App.-Waco 2000,
a plaintiffs capacity to sue must be raised in the trial
                                                                 pet.   denied)).    "The amount of evidence necessary to
court by verified pleading. TEX. R. CIV P. 93(1); Austin
                                                                 affirm a judgment is far less than that necessary to
Nursing Ctr., 171 S.W.3d at 849; Sixth RMA Partners,
                                                                 reverse a judgment." Id. (quoting Pulley v. Milberger,
L.P. v. Sibley, 111 S.W.3d 46, 56 (Tex. 2003). Such a
                                                                 198 S.WJd 418,             427 (Tex.     App.-Dallas 2006, pet.
complaint may not be raised for the first time on appeal.
                                                                 denied); Hvynh v. Nguyen, 180 S.WJd 608, 615 (Tex.
See Sixth RMA Partners, 111 S.WJd at 56; HCRA of
Tex.,    Inc.   v. Johnston,   178 S.WJd 861,     866   (Tex.    App.-Houston [14th Dist.J 2005, no pet.)).

App.--Fort Worth 2005, no pel).
                                                                        To prove the existence of an express trust, a plaintiff
                                                                 must show the existence of the intended trust property,
        Because Johnny did not challenge Donald's capacity
                                                                 object, and beneficiary with reasonable certainty. See
to sue on Letha's behalf in the trial court, he did not
preserve this issue for appellate review. Id. Accordingly,       Perfect Union Lodge No. 10 v. Interfirst Bank of San
                                                                 Antonio, N.A., 748 S.WJd 218, 220 (Tex. 1988;:
Johnny's fifth issue is overruled.
                                                                 Pickelner      v.    Adler,       229    S.WJd      516,    526     (Tex.
Validity of Trust                                                App.-Houston [1st Dist.J 2007, pet. denied); In re Estate
                                                                 ofBerger, 174 S.WJd 845, 848 (Tex. App.-Waco 2005,
     Johnny contends in his fourth issue that there is           no pet.).
factually insufficient evidence to support the court's
award of actual damages because Donald and Letha                                The requirement of certainty in the
failed to establish the existence of a valid trust. 7 Johnny's             material terms of the declaration of trust
primary complaint in this regard appears to be that                         extends to, and includes, the subject matter
Donald and Letha failed to adequately identify the                          or property embraced in the trust. It has
property subject [*14] to the trust. We construe this as an                 been     held   that    the   property    must    be
assertion that: (1) the evidence is factually insufficient to               identified with as much certainty as is
overcome the statute of frauds; and (2) the evidence is                     required in a deed of         [*16] conveyance,
factually insufficient to establish what property is subject                and that it must be sufficiently designated
to the trust.                                                               or identified to enable title thereto to pass
                                                                            to the trustee.
           7    Legal and factual insufficiency claims may be
           raised in a restricted appeal. Norman Commc'ns v.      Kurtz v.     Robinson,       279 S.WJd 949,          952 (Tex.      Civ.
           Tex. Eastman Co., 955 S.WJd 269, 270 (Tex.             App.-Amarillo 1955, writ refd n.r.e.) (quoting 89 C.J.S.
           1997) (per curiam); Whitaker v. Rose, 218 S.WJd        Trusts § 45(b) (1955)); accord 90 C.J.S. Trusts § 45
           216, 220 (Tex. App.-Houston [14th Dist.J 2007,
                                                                  (2002).
           no pet.).

                                                                       Thus, the Texas Trust Code contains a statute of
        When considering a factual sufficiency challenge . . .    frauds applicable to the creation of a "trust in either real
regarding an issue on which the appellant did not have            or personal property," which provides that such a trust "is
the burden of proof, we must consider and weigh all of            enforceable only if there is written evidence of the trust's
the evidence, not just the evidence that supports the             terms bearing the signature of the settlor or the settlor's
verdict. We may not pass upon the witnesses' credibility          authorized agent." TEX. PROP. CODE ANN. § 112.004
or substitute our judgment for that of the [factfinder],
                                                                  (Vernon 2007).
even if the evidence would clearly support a different
 result. We will set aside the verdict only if it is so                 The statute of frauds is an affirmative defense under
 contrary to the overwhelming weight of the evidence that         Rule of Civil Procedure 94. See TEX. R. CIV. P. 94; First
 the verdict is clearly wrong and unjust. Reversal can            Natl Bank in Dallas v. Zimmerman, 442 S.WJd 674,
 occur because the finding was based on weak or                   676-77 (Tex. 1969); Santa Fe Petroleum, L.L.C. v. Star
 insufficient evidence or because the proponent's proof,          Canvon Corp., 156 S.WJd 630, 641 (Tex. App.-Tyler
 although adequate if taken alone, is overwhelmed by the          2004, no pet.); Nicol v. Gonzales, 127 S.WJd 390, 393
 opponent's 1*15] contrary proof. Bossier Chrysler-Dodge          (Tex. App.-Dallas 2004, no pet.). As such, it must be
 II, Inc. v. Riley, 221 S.WJd 749, 753 (Tex. App.-Waco
                                                                                                                                                                      Page 6
                                                                     2008 Tex. App. LEXIS 3492, *16




affirmatively pleaded, or a party forfeits the right to assert                              interests."
it. Id. And this rule of forfeiture applies even to a deed
which allegedly contains an insufficient description of the                                          8    We presume that Donald here referred to a

[*17] property to be conveyed. See First Nat'l Bank, 442                                             40-acre tract in Bosque County which the CPA's

S.W.2dat 676; Nicol, 127 S.WJdat 393.                                                                July 1989 report valued at S 35,000.


      Mere,          Johnny       pleaded           only     a      general       denial.         According to Donald, the loss of assets was primarily

Therefore, he has forfeited the right to complain that                                      due to Johnny's mishandling of the trust corpus but also

Donald and Letha failed to provide factually sufficient                                     in part because of Letha's mishandling of some assets.

evidence to satisfy the statute of frauds. See First Nat'l                                  For example, Letha obtained a home equity loan secured

Bank,    442 S.W.2d at                 677;     Santa Fe Petroleum,                  156    by the family home in Whitney, which was subsequently

S.WJdat 641; Nicol, 127 S.WJdat 393.                                                        foreclosed on due to default. 9 Johnny failed to pay the ad
                                                                                            valorem taxes due on several other properties in Whitney,
      During          Donald's         testimony,           Donald         and     Letha    and    they   were    foreclosed         on.    And     Johnny        invested
offered in evidence a financial statement prepared by the                                   approximately $ 100,000 in a business venture in Russia
Carroll family's CPA which shows that in July 1989, after                                   which yielded no return and approximately $ 14,000 in a
all the debts and expenses had been paid in connection                                      lumber business which yielded no return. 10
with the probate of Ray Carroll's estate, "the net value of
[his] parents" {i.e., the net value of the assets owned by                                           9    The family home is identified in the financial

Letha and by Ray's estate) was $ 1,470,902. This report                                              statement as Block 32, Lots 4-5, City                       [*19] of

lists $ 1,823,920 in assets, including:                                                              Whitney, and was valued in 1989 at $ 60,000.
                                                                                                     10    These failed investments occurred sometime

              . $ 72,720 in cash on deposit in eight                                                 before      1995    because,          as     Donald        explained,

          different accounts;                                                                        Johnny      had    failed       to    provide       "any     type   of
                                                                                                     accounting" and Donald had been able to gather
                 . S 61,853 in two IRA's;                                                            only a limited amount of records up to 1995.


                          S       1,066,481           in         numerous                         Donald's    testimony       fell    far short         of conclusively
         receivables;                                                                       establishing what specific properties were subject to the
                                                                                            trust he created with his mother and brother in                           1987.
                 .    $       53,283    in    various         stocks       and              Nevertheless,        his    testimony           and      the     supporting
         mutual funds;                                                                      documentary evidence constitute probative evidence that
                                                                                            the trust was funded with assets worth approximately S
                 .        S     15,000        in      a      closely-held
                                                                                            1.8 million and that the trust properties remaining at the
         corporation;
                                                                                            time of trial were worth less than $ 100,000.

                 . $ 475,083 in numerous tracts of real
                                                                                                  Therefore, we cannot say that the court's award of
         property             (each    separately          listed    with     a
                                                                                            actual   damages      is    so   contrary       to    the    overwhelming
         general description {e.g., "Block 29, Lot 8,
                                                                                            weight of the evidence as to be clearly wrong and unjust.
         City of Whitney"); and
                                                                                            See    Bossier    Chrysler-Dodge,              221     S.WJd         at    753.
                                                                                            Accordingly, we overrule Johnny's fourth issue.
                 .    S       79,500   in    miscellaneous             |*18j
         personal property.
                                                                                            Fraud Finding

The     report       also       identifies      $    353,018          in    liabilities,          Johnny contends in his third issue that the court's
resulting in a net value of S 1,470,902.                                                    finding of fraud is not supported by the pleadings or the
                                                                                            evidence.
      Donald          testified         that.        because          of      Johnny's
mishandling           of the      trust      corpus,       the      only    properties            As with any other civil judgment, a default judgment
remaining "in the estate or trust" are "a few properties" in                                must be supported by the pleadings. TEX. R. CIV. P. 301:
Hill County worth approximately $ 20,000, a tract of real                                   Stoner v. Thompson, 578 S.W.2d 679, 682 (Tex. 1979):
estate in Bosque County, ^ and "some undivided mineral
                                                                                                                                          Page 7
                                                             2008 Tex. App. LEXIS 3492, *20




[*20]    Binder      v.    Joe,   193      S.W.3d          29,      32   (Tex.   Exemplary Damages

App.—Houston [1st Dist.J 2006, no pet.). A judgment
which    grants     relief not        sought     in    the    pleadings     is        Johnny contends in his second issue that the court's

erroneous absent a trial by consent. See Stoner,                          578    award of exemplary damages is not supported by the

S. W.2d at 682; Binder, 193 S. W.3d at 32. We review the                         pleadings [*22] or the evidence.

pleadings as a whole to determine whether the judgment
                                                                                      Donald cites Chapter 41        of the Civil Practice and
conforms to them. Raymond v. Raymond, 190 S.W.3d 77,
                                                                                 Remedies Code as the legal basis for the court's award of
83 (Tex. App.-Houston [1st Dist.J 2005, no pet.); Wilson
                                                                                 exemplary      damages.   Section    41.003 (a)   provides    in
v. McCracken, 713 S.W.2d 394, 395 (Tex. App.-Houston
                                                                                 pertinent part, "exemplary damages may be awarded only
[Nth Dist.J 1986, no writ).
                                                                                 if the claimant proves by clear and convincing evidence

     The Plaintiffs' Original Petition does not use the term                     that the harm with respect to which the claimant seeks

"fraud" or "defrauded." It identifies four specific ways in                      recovery of exemplary damages results from: (1) fraud;

which Johnny failed to comply with his duties as trustee,                        (2) malice; or (3) gross negligence." TEX. CIV. PRAC. &

namely: (1) never provided an accounting; (2) engaged in                         REM. CODE ANN. §41.003(a) (Vernon Supp. 2007).

self-dealing; (3) allowed waste to occur; and (4) failed to
                                                                                      We have already determined that Donald and Letha
file federal    income tax returns. The prayer for relief
                                                                                 did not allege a fraud claim in their petition. Nor did they
requests among other things: (1) removal of Johnny and
                                                                                 allege malice or gross negligence. Thus, the court's award
substitution of Donald as trustee; (2) that Johnny be
                                                                                 of exemplary damages is not supported by the pleadings.
"ordered       to   provide       a     thorough           and      complete
                                                                                 See Stoner, 578 S. W.2d at 682; Binder, 193 S. W.3d at 32.
accounting"; (3) that Johnny be ordered to turn over all
                                                                                 Accordingly, we sustain Johnny's second issue.
books and records of the trust; (4) that Donald and Letha
"recover all damages for loss of property and for assets of
                                                                                 Conclusion
the Trust due to [Johnny's]           [*21] breach of his fiduciary
duty"; and (5) attorney's fees.                                                       Donald    and   Letha   presented    factually   sufficient
                                                                                 evidence to support the court's award of S 1 million in
     After the court pronounced judgment in Donald's and
                                                                                 actual damages. However, their pleadings do not support
Letha's favor, the court announced, "The Court will find
                                                                                 the court's oral finding of fraud or its award of exemplary
that this judgment—or these matters were procured by
                                                                                 damages. Therefore, we modify the judgment by deleting
fraud and will order that that be a part of the Court's
                                                                                 the award of exemplary damages and affirm the judgment
judgment in order to see to it that certain bankruptcy
                                                                                 as modified.
issues may not be allowed to or used to discharge this
debt." '' Before that moment, the term "fraud" had not                                FELIPE REYNA
been used in these proceedings.
                                                                                     Justice
         11     Notwithstanding the court's insistence that a
         fraud finding be included in the judgment, the                              Before [*23] Chief Justice Gray,
         written    judgment          contains        no     such    finding.
         Nevertheless, Donald refers to this finding in his                          Justice Vance, and

         brief as one of the justifications for the court's
                                                                                     Justice Reyna
         award of exemplary damages.

                                                                                     (Chief Justice Gray dissents. A separate opinion will
     Donald's and         Letha's petition       asserts a claim for
                                                                                 not issue.)
breach of fiduciary duty. It does not allege a fraud claim.
Therefore, the court's oral pronouncement that Johnny
                                                                                     Affirmed as modified
committed fraud is erroneous because it is not supported
by the pleadings. Stoner, 578 S.W.2d at 682: Binder, 193                             Opinion delivered and filed May 14, 2008
S.WJd at 32.        Accordingly, we sustain Johnny's third
issue.

				
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