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Nichols v. Goodger

Court of Appeals of Texas, Third District, Austin

July 20, 2017

Lennis L. Nichols, Appellant
Brent Goodger and Patrice Goodger, Appellees


          Before Chief Justice Rose, Justices Puryear and Goodwin


          Jeff Rose, Chief Justice

         Lennis L. Nichols appeals from a post-answer default judgment rendered in favor of appellees Brent and Patrice Goodger on the Goodgers' claims for fraud in a real-estate transaction and violations of the Texas Deceptive Trade Practices Act (DTPA). The Goodgers' suit claimed that Nichols, in the course of selling the Goodgers a house in Caldwell County, had failed to disclose foundation and septic-system defects and roof damage. Nichols failed to appear for trial, and the district court rendered judgment for the Goodgers, awarding actual and exemplary damages. On appeal, Nichols challenges the propriety of the default judgment, the denial of his request for a jury trial, the denial of his motion for new trial, the legal and factual sufficiency of the evidence supporting the judgment, and the legal sufficiency of the evidence supporting the award of exemplary damages. We will affirm the trial court's judgment.


         In August of 2012, Nichols sold his house in Caldwell County to the Goodgers. As part of the sale, Nichols represented to the Goodgers that they would have the use of a water well and, in the statutorily required seller's disclosure, [1] Nichols indicated among other things that he was not aware of any damage to, defects in, or need to repair the house's roof, septic system, or foundation. After closing the sale, the Goodgers discovered that they did not have use of the water well and that the foundation, septic system, and roof were defective or in need of repair.

         After failed attempts to resolve the issue informally or through mediation, the Goodgers filed suit against Nichols for, among other claims, fraud and violations of the DTPA, alleging that Nichols had knowingly and intentionally failed to disclose the property's defects. The Goodgers' petition alleged that Nichols filed claims for roof and foundation damage in 2006 and 2011, respectively, but he failed to disclose this information or that the septic system was malfunctioning to the Nichols.

         Nichols, who was served with citation at an address in Oklahoma, retained counsel and filed an answer that included a jury request. Nichols also responded to the Goodgers' discovery requests and filed a motion to designate the house's builder and Nichols's pre-closing inspector as responsible third parties. Later, Nichols consented to his attorney's withdrawal from the case and thereafter, according to the Goodgers, Nichols became difficult to reach. In fact, the Goodgers assert, Nichols failed to appear for a scheduling hearing in January 2015, an attempted mediation in July 2015, a court-ordered mediation in August 2015, and a final judgment hearing in October 2015 despite phone calls and notices mailed to the Oklahoma address identified in Nichols's discovery responses as his home address. At trial, the Goodgers offered the affidavit of the mediator's scheduler, who testified that she called Nichols sixteen times to notify him of the court-ordered mediation date and sent notices via first-class mail which were marked "refused" by the carrier. Nichols has since testified that he left the mail sitting in his mailbox or refused it outright and that he did not get or respond to the phone calls or voicemail messages.

         When Nichols failed to appear on the scheduled trial date, the district court rendered default judgment against him, awarding the Goodgers $55, 985.07 in damages and attorney fees and $114, 000 as exemplary damages. The district court also held Nichols in contempt of court for failure to appear at the court-ordered mediation.

         After receiving notice of the judgment, Nichols hired a new attorney and filed a motion for new trial. At the hearing on that motion, Nichols testified that he was not indifferent to the court proceedings, but that he had expected notice of a trial to be delivered by a sheriff, in a manner similar to his service of process. According to Nichols, his belief stemmed from a conversation he had in early 2015 with the Goodgers' attorney in which he told her not to call him or send him any letters, but that he would appear in court when the sheriff gave him notice of a trial. But Nichols also acknowledged that the Goodgers' attorney had not agreed to have a sheriff deliver notice. The district court denied Nichols's motion for new trial.


         Nichols raises five issues on appeal, urging that the district court erred by (1) granting a post-answer default judgment against him when he had not received notice of the trial setting, (2) conducting a bench trial when Nichols had timely requested a jury trial, (3) denying Nichols's motion for new trial, (4) rendering judgment that was not supported by legal or factually sufficient evidence, and (5) awarding exemplary damages when there was no evidence that he acted with "actual knowledge."

         Default judgment

         In his first issue, Nichols argues that the district court erred in rendering default judgment against him because the court knew that Nichols did not have actual knowledge of the trial setting. In making this argument, Nichols relies on the Supreme Court's opinion in Peralta v. Heights Medical Center, Inc., which set aside, on due-process grounds, a pre-answer default judgment against a defendant who had not been served with notice of the case against him.[2] Here, however, Nichols was personally served with citation[3] and was mailed notices of other settings, including the trial setting. Once a party is properly served with citation, the Texas Rules of Civil Procedure allow a party to be notified of a trial setting by mail as long as the notice is given at least 45 days in advance of the trial setting.[4] The Goodgers submitted evidence that, at every stage of the process requiring Nichols's appearance, they sent notices by certified or regular mail to the address Nichols provided. That Nichols either ignored the mail or refused it outright, as he acknowledged, does not change the fact that he was, in fact, given rule-compliant notice of the trial setting.[5]Nichols's refusal to receive or read the notices-which he uses as the basis of his argument that he did not receive actual notice of the trial setting-constitutes constructive notice of the trial setting.[6]Constructive notice under these circumstances satisfies due-process concerns.[7] Having determined that Nichols was constructively notified of the trial setting, we overrule Nichols's first issue.

         Jury request

         In his second issue, Nichols maintains that the district court denied him his constitutional right to a trial by jury when it held a bench trial after Nichols had properly demanded a jury trial.[8] But the Texas Rules of Civil Procedure provide that "[f]ailure of a party to appear for trial shall be deemed a ...

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