In a case that has us scratching our heads, the San Antonio Court of Appeals has denied USAA’s petition for writ of mandamus in a no-answer default judgment case in which USAA clearly (in our view) met the Craddock standard for setting aside the judgment. It obviously bothered Justice Meza, who dissented from the court’s decision and penned an opinion explaining precisely how the majority got it wrong.
In re United Services Automobile Association (No. 04-26-00512-CV; September 16, 2026) arose from a no-answer default judgment against USAA in a dispute over a homeowner’s insurance claim. The homeowners filed suit against USAA in December 2025, alleging contractual, statutory, and extra-contractual claims. Plaintiffs served USAA through its registered agent Corporation Services Company (CSC) on December 12, 2025. On February 20, 2026, USAA had not answered the lawsuit, so Plaintiffs filed a motion for a no-answer default judgment. The trial court granted the motion on March 3. Three weeks or so later, USAA filed a motion to set aside the default judgment and, in the alternative, motion for new trial. The company argued that the citation had been inadvertently routed to the wrong department and, consequently, went awry. The trial court denied the motions on April 9, followed by USAA’s motion to reconsider on April 20. USAA sought mandamus relief.
In an order signed by Justice McCray and joined by Chief Justice Martinez, the court of appeals denied relief without explanation. Justice Meza dissented. She argued that USAA satisfied the Craddock test, and the trial court abused its discretion by not granting USAA’s motion to set aside the default judgment. The Craddock test has three factors: “(1) the failure to answer was a mistake, and not intentional, (2) there was a meritorious defense, and (3) the plaintiff would not suffer injury by granting the motion.”
First, Justice Meza opined, the declarations of USAA’s two witnesses, “if true, negate[d] intentional or consciously indifferent conduct by USAA and are not controverted by” Plaintiffs.” As SCOTX has held, the “controlling fact is the ‘absence of an intentional failure to answer rather than a real excuse for not answering” (citation omitted). Additionally, “the defendant’s excuse does not need to even be a good one to suffice” (citations omitted). In this case, the employee who typically routed court filings for USAA was on vacation. The employee covering for her mistakenly routed Plaintiffs’ petition to the auto claims department rather than the litigation department. The auto claims department employee who got the email with the petition couldn’t look at it because it was marked “privileged.” Consequently, the petition never reached the litigation department to begin with. In the absence of intentions not to answer, Justice Meza would have ruled that USAA met the the first standard.
Moving to the second prong, requiring USAA to set up a meritorious defense in its motion to set aside the default judgment, Justice Meza would have held that USAA made a prima facie showing that Plaintiffs’ claim was denied because the policy specifically excluded their claims for damage to their home’s foundation. “USAA’s assertions and supporting document,” Justice Meza wrote, “are sufficient to satisfy Craddock’s second element because they would constitute a defense to [Plaintiffs’] claim and the assertion is more than conclusory” (citations omitted).
As to the third element, no injury to Plaintiffs, USAA argued that only a few weeks “passed between the filing of its motion and the entering of the no-answer summary judgment order, so there was not a loss of witnesses or valuable evidence as would delay or injure [Plaintiffs].” Additionally, Plaintiffs didn’t even address the second and third prongs of the test in their response to USAA’s motion for reconsideration of the trial court’s denial of its motion. According to Justice Meza, Plaintiffs failed to carry their burden to show they suffered an injury. USAA satisfied the Craddock factors.
But did USAA have an adequate appellate remedy? Justice Meza thought so. Here the order granting default judgment didn’t dispose of the damages issue and was not final. It further left open whether a hearing on damages would occur. Nevertheless, USAA found itself in a compromised position because it couldn’t prove its defense, which would absolve it of liability altogether. “Under these circumstances,” Justice Meza opined, “appellate review following final judgment does not provide an adequate remedy. If the denial of the motion for new trial is ultimately determined to have been erroneous, the parties and the courts will have devoted substantial resources to proceedings conducted without affording USAA the opportunity to litigate a defense it was entitled to assert under Craddock.” Otherwise, Justice Meza cautioned, this case might end up being tried twice, increasing “the public and private costs” to do it.
We don’t usually write up stand-alone dissents this way, but this one merits attention. The facts clearly establish that USAA didn’t intend to not to answer (why would they?) and responded just as soon as it got word of the suit from the CSC. It further appears that Plaintiffs made no attempt to rebut USAA’s evidence on two of the three Craddock factors (what rebuttal could they have made?). Something’s not right here, and Justice Meza’s opinion, which begins by saying “[t]his case presents a straightforward opportunity to preserve the orderly administration of justice,” lays out the reasons why. We don’t know whether this case will continue up the ladder or go back to the trial court, but (unless there’s something we don’t know behind the scenes) it ought to be reversed on principle.
