Opinion
No. 09-09-00531-CV
Submitted on May 20, 2010.
Opinion Delivered September 9, 2010.
On Appeal from the 9th District Court Montgomery County, Texas, Trial Cause No. 09-02-01089-CV.
Before McKEITHEN, C.J., GAULTNEY and KREGER, JJ.
MEMORANDUM OPINION
Key Financial Corporation appeals a default judgment granted in favor of Priority Services, Inc. d/b/a Priority Homes Builders. Because the trial court erred in signing a nunc pro tunc default judgment correcting a vacated default judgment after an answer had been filed, we reverse the trial court's judgment and remand the cause to the trial court for further proceedings consistent with this opinion.
PRIORITY'S CLAIM
Priority Services, Inc. d/b/a Priority Homes Builders filed suit against Key Financial Corporation, and three of its employees, in their individual capacities. Priority alleged that it owned certain real property, and that potential buyers Eric and Rhonda Williams entered into a contract to purchase the property. The Williams contracted with Key Financial for Key Financial to assist them in obtaining a mortgage lender for the purchase of the property. The sued employees allegedly represented to the Williams and Priority that the Williams were approved for financing and closing would occur. The closing, and two subsequently scheduled closings, did not occur. Subsequently, these employees allegedly represented to the Williams and Priority that the employees obtained a "clear to close," and a final closing would occur. These employees later informed the Williams and Priority that the closing could not occur. Priority learned that the "clear to close" and the credit approval had never issued.
Priority sued Key Financial and the three employees for negligent misrepresentation and common-law fraud. Priority alleged that in reliance on the defendants' representations, Priority did not entertain other buyer inquiries and removed the property from the listing service, thereby hindering the sale of the property. Priority claimed $25,000 in damages.
THE PROCEDURE IN THE TRIAL COURT
Priority filed the lawsuit on February 3, 2009, and sought to serve Key Financial through its registered agent for service. On March 10, 2009, Priority filed a motion for default judgment against Key Financial and set an oral hearing for March 18, 2009, to present evidence of damages. On March 16, 2009, two days before the scheduled hearing, the trial court signed a default judgment and awarded Priority $25,000. Priority notified the trial court of the scheduled damages hearing, and the next day the trial court issued an order vacating the March 16, 2009 default judgment. The trial court held the hearing on March 18, 2009. Priority presented evidence of damages, and asked the court to award $25,000 to be paid by Key Financial. Priority informed the court a nonsuit against the individual defendants would be filed. At the conclusion of the hearing, the trial court responded, "All right. I've signed it in full." The record does not include a default judgment signed at that time. Priority attempted to domesticate the vacated March 16, 2009 default judgment in Florida. Key Financial's general counsel became aware of the lawsuit, and Key Financial filed its answer on August 12, 2009.
Priority filed a notice of nonsuit as to the individual defendants, but the order signed by the trial court on August 20, 2009 dismissed the entire case without prejudice to Priority's right to refile the suit. On August 24, 2009, Priority filed a motion to reform the dismissal order to apply only to the individual defendants, and filed a motion for judgment nunc pro tunc to change the date of the vacated default judgment from March 16, 2009, to March 18, 2009, the date of the hearing on damages. Key Financial filed a response to the motions, and also filed a motion for new trial. The trial court granted Priority's motions and signed a nunc pro tunc default judgment. Key Financial filed an amended motion for new trial. After a hearing, the trial court denied the motion for new trial. In the trial court's Order Denying Defendant's First Amended Motion for New Trial, the trial court set a damages hearing on December 18, 2009, although the default judgment nunc pro tunc referred to the March 18, 2009 hearing. The trial court subsequently vacated the order and entered a Corrected Order Denying Motion for New Trial. Key Financial filed this appeal.
THE ISSUES
Key Financial presents two issues for our review. In its first issue, Key Financial contends the trial court erred in granting Priority's motion for entry of no-answer default judgment nunc pro tunc after Key Financial had filed its answer. In its second issue, Key Financial argues the trial court abused its discretion in denying Key Financial's motion for new trial because it satisfied the requirements established in Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex. 1939).
The trial court vacated the March 16, 2009 default judgment order and then did not sign another judgment until the nunc pro tunc judgment. Key Financial argues "there was no judgment in place" prior to the filing of its answer. Priority responds that the trial court issued an oral ruling granting Priority's motion for default judgment at the March 18 hearing, and that Key Financial's answer was filed after that default judgment. Key Financial maintains the hearing transcript does not support a finding that a judgment was orally rendered at the hearing on March 18, 2009.
ANALYSIS
The purpose of a judgment nunc pro tunc is to correct clerical mistakes in the record of the judgment, not judicial errors. See Escobar v. Escobar, 711 S.W.2d 230, 231 (Tex. 1986); see also TEX. R. CIV. P. 316. Whether an error in a judgment is a judicial or clerical error is a question of law. Finlay v. Jones, 435 S.W.2d 136, 138 (Tex. 1968). A clerical error is a mistake preventing a judgment, as entered in the official record, from accurately reflecting the judgment that was rendered. Universal Underwriters Ins. Co. v. Ferguson, 471 S.W.2d 28, 29-30 (Tex. 1971). Conceivably a judgment nunc pro tunc may be issued in appropriate circumstances to correct the date an order was signed if the original date is shown to have been incorrect. In re Taylor, 113 S.W.3d 385, 393 (Tex. App.-Houston [1st] 2003, no pet.). However, Rule 316 may not be used to simply backdate the signing of a written judgment that was not in fact signed earlier. See id. (citing Jaurequi Partners, Ltd. v. Grubb Ellis Commercial Real Estate Servs., 960 S.W.2d 334, 337 (Tex. App.-Corpus Christi 1997, pet. denied)).
The trial court vacated the March 16, 2009 default judgment. "A judgment that has been vacated has no legal effect" and "the matter stands precisely as if there had been no judgment." Pringle v. Moon, 158 S.W.3d 607, 610 (Tex. App.-Fort Worth 2005, no pet.); see also In re J.M.T., 999 S.W.2d 562, 563 (Tex. App.-Waco 1999, no pet.); P.V. Int'l Corp. v. Turner, 700 S.W.2d 21, 22 (Tex. App.-Dallas 1985, no writ); Ferguson v. Naylor, 860 S.W.2d 123, 127 (Tex. App.-Amarillo 1993, writ denied). At the time Key Financial filed its answer on August 12, 2009, no written default judgment was in effect. A defendant may answer any time before the trial court renders a default judgment. See Davis v. Jefferies, 764 S.W.2d 559, 560 (Tex. 1989). A no-answer default judgment may not be rendered when the defendant has an answer on file. See TEX. R. CIV. P. 239; Davis, 764 S.W.2d at 560.
Priority maintains nevertheless that the trial court issued an oral ruling granting the default judgment at the March 18, 2009 damages hearing, prior to Key Financial filing its answer. "A judgment routinely goes through three stages: (1) rendition, (2) signing, and (3) entry." Wittau v. Storie, 145 S.W.3d 732, 735 (Tex. App.-Fort Worth 2004, no pet.). A judgment is rendered when the trial court officially announces its decision in open court or by written memorandum filed with the clerk. S A Rest. Corp. v. Leal, 892 S.W.2d 855, 857 (Tex. 1995); Comet Aluminum Co. v. Dibrell, 450 S.W.2d 56, 58 (Tex. 1970). Rendition of judgment "is the judicial act by which the court settles and declares the decision of the law upon the matters at issue." Dibrell, 450 S.W.2d at 58 (quoting Coleman v. Zapp, 105 Tex. 491, 494 (1912)). While specific words of rendition are not required, the words stated by the trial court must clearly indicate the court's intention to render judgment at the time the court expresses the words. S Rest. Corp., 892 S.W.2d at 858.
In Oak Creek Homes, Inc. v. Jones, 758 S.W.2d 288 (Tex. App.-Waco 1988, no writ), the Waco Court of Appeals addressed a similar but we believe distinguishable circumstance. Oak Creek Homes appealed a default judgment. Jones, 758 S.W.2d at 289. Oak Creek Homes' answer was due by 10:00 a.m. on March 2, 1987, but was not filed by that time. Id. Later that day, the trial court heard Jones's proof for a default judgment. Id. At the conclusion of the evidence, the trial judge stated, "I'll grant all the relief you've asked for." Id. The trial judge noted on the docket sheet, "3-2-87. Default judgment" followed by the judge's signature. Id.
Oak Creek Homes' answer was filed the same day. Id. at 290. Later that afternoon, a written judgment was signed by the trial judge and then filed with the clerk. Id. Oak Creek Homes argued that at the time it filed an answer the trial court had not rendered judgment. Id. In holding that the pronouncement granting plaintiff "all the relief you've asked for" was clearly intended by the trial judge as the rendition of judgment, the Court cited the trial judge's immediate docket notation, "default judgment," followed by the judge's signature. Id. at 291.
In this case, the record is not so clear. At the end of the hearing on March 18, 2009, the trial judge stated, "All right. I've signed it in full." There is no record of what the judge signed, if anything. See S A Rest. Corp., 892 S.W.2 at 858; Dibrell, 450 S.W.2d at 58. The docket sheet entry for the March 16 default judgment stated the judge "signed" the judgment, and the docket sheet entry for the March 17 order vacating the March 16 default judgment stated the judge "signed" the order. The docket sheet entries for the orders granting the partial non-suit, granting the judgment nunc pro tunc, and denying plaintiff's motion for new trial also stated the orders were "signed." Although the docket sheet entry for the March 18 hearing states "Prove Up of Default Judgment" along with the judge's name, there is no indication that a default judgment was signed on that date. See Buffalo Bag Co. v. Joachim, 704 S.W.2d 482, 483-84 (Tex. App.-Houston [14th Dist.] 1986 writ ref'd n.r.e.) (considering docket sheet entry in determining whether judgment had been rendered).
CONCLUSION
A nunc pro tunc judgment is improper when there is no record of a prior judgment to correct. See Escobar, 711 S.W.2d at 231-32; see generally TEX. R. CIV. P. 316. Key Financial's intervening answer precluded a subsequent no-answer default judgment in favor of Priority. See TEX. RULE CIV. P. 239; Davis, 764 S.W. 2d at 560. The trial court erred in subsequently signing a nunc pro tunc judgment to correct a judgment that had been set aside and had no continuing legal effect. See Escobar, 711 S.W.2d at 231; Dibrell, 450 S.W.2d at 58-59. Issue one is sustained. We need not address appellant's second issue as it would provide no greater relief. See TEX. R. APP. P. 47.1. We reverse the trial court's judgment and remand the cause to the trial court for further proceedings consistent with this opinion.
REVERSED AND REMANDED.