The Texas Supreme has granted review of a Dallas Court of Appeals decision affirming a default judgment against a residential landlord in a suit brought by a tenant.
Huffman Asset Management, LLC and Prairie Capital, LLC v. Maurice Colter and Ni-Ida Colter (No. 24-0205; granted September 5, 2025); No. 05-22-00779-CV; November 7, 2023) arose from a residential lease dispute. The Colters leased an apartment in Denton from Prairie Capital, through its management agency Huffman. Landlord represented that the apartments in the complex were not prone to insect infestations, but, according to Tenants, theirs was infested and that Landlord didn’t do anything about it. The roaches allegedly ruined their property to the tune of $2,700 in damages. Tenants asserted DTPA, fraud, non-disclosure, and negligence claims against Landlord and the management agency, and additional claims against Landlord for wrongful retention of their security deposit and breach of the lease.
Tenants unsuccessfully attempted to serve Defendants at three different addresses, including the one in the lease. (The process server provided an affidavit of due diligence stating that none of the defendants could be found at those addresses and that one of them was an apartment complex was an apartment building with secured access.) Tenants promptly amended their pleading to assert that the Texas Secretary of State may be served an Defendants’ agent for service, which they did. Process was subsequently returned to the SOS. Tenants moved for default judgment, which the trial court signed and awarded damages of $2,712 for property damage, $15,424 in DTPA damages, $1,000 for damages and statutory penalties for wrongful detention of their security deposit, and $4,667.24 in attorney’s fees. The trial court awarded each Tenant an additional $5,000 for mental anguish. The trial court sent notice of default judgment to the address Tenants submitted in their first amended certificates of last-known mailing address. Apparently, Defendants got the last notice because they filed a motion to transfer venue and for new trial a month after the trial court signed the default judgment. After a hearing, the trial court denied the motion for new trial and refused Defendants’ requested findings of fact and conclusions of law. Defendants appealed.
In an opinion by Justice Partida-Kipness, the court of appeals affirmed in part and reversed in part. First, the court determined that Tenants exercised reasonable diligence in attempting to serve Defendants at four different addresses and were entitled to use substituted service on the SOS to serve them as their agent for service of process. Here the SOS’s Whitney certificates confirmed that the SOS received service of process for each entity and, consequently, gave Defendants constructive notice of the lawsuit. The certificates also establish that the SOS forwarded process to Defendants’ registered agents and offices then on file with the SOS. The court thus held that Tenants and the SOS acted in accordance with statutory requirements.
Defendants asserted that the default judgment must be reversed because the trial court improperly awarded unliquidated damages based only on affidavit testimony and without a hearing and receiving evidence on damages. As the court observed, “[i]f a claim is unliquidated or not proved by an instrument in writing, the court must hear evidence as to damages.” TRCP 243. This requirement may be satisfied by affidavits in support of a motion for default judgment. Here, the court didn’t conduct a hearing on damages but considered the “pleadings, evidence and filings” before it, which included Tenants’ affidavits as to their damages, as well as the claims for mental anguish and statutory damages in their pleading. Consequently, the trial court did not err by failing to hold a separate hearing on damages. The court did, however, agree with Defendants that Tenants did not submit legally sufficient evidence to support their claim for mental anguish damages. Their only evidence was conclusory and did “not show the nature, duration, and severity of mental anguish, a substantial interruption in [Tenants’] daily routine, or a high degree of mental pain and distress that is greater than mere worry, anxiety, vexation, embarrassment, or anger.” There was also no evidence to support the $5,000 each Tenant requested. The court remanded the mental anguish damages issue to the trial court for new trial. And, since the trial court calculated its DTPA award based in part on the mental anguish damages award, the court remanded that as well.
The court turned next to whether it should set aside the default judgment and order a new trial in accordance with the factors established by Craddock v. Sunshine Bus Lines, Inc.. 133 S.W.2d 124, 126 (Tex. 1939). According to Craddock, the defaulting party must establish that “(1) the failure to appear was not intentional or the result of conscious indifference, but was the result of an accident or mistake, (2) the motion for new trial sets up a meritorious defense, and (3) granting the motion will occasion no delay or otherwise injure the plaintiff.” Defendants argued that they met these factors, Tenants that they didn’t. The court agreed with Tenants, pointing to Defendants’ failure to produce any evidence of the first factor or any excuse for failing to timely inform the SOS of a change of address for its registered office for service (if they did change it). The court concluded that Defendants’ own negligence prevented them from answering the lawsuit and that the trial court did not abuse its discretion by denying their motion for new trial.
Finally, Defendants asserted that venue was mandatory in Denton County and that the trial court improperly denied their motion to transfer venue. But since they didn’t answer the lawsuit in the first place, the venue issue was not properly before the court.
Oral argument has not been scheduled.
