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A default judgment should be set aside and a new trial ordered in any case in which the failure of the defendant to answer before judgment was not intentional, or the result of conscious indifference on his part, but was due to a mistake or an accident; provided the motion for a new trial sets up a meritorious defense and is filed at a time when the granting thereof will occasion no delay or otherwise work an injury to the plaintiff.
Plaintiffs, a driver and passenger, were injured when their car collided with a bus owned by the defendant bus company. Plaintiffs alleged that the bus driver negligently operated the bus at an unlawful speed and in a reckless manner. The defendant bus company forwarded the citation in the case to its insurer where it became lost while the insurer dealt with hundreds of claims from a storm. The insurer discovered the citation on the day that a default judgment was rendered for the driver and the passenger. The defendant filed a motion to set aside the judgment. The motion was overruled by the trial court but reversed by the Court of Civil Appeals. Plaintiffs brought error to the Supreme Court.
Did the appeals court err in reversing the trial court’s default judgment in favor of the plaintiffs?
The court held that the appeals court did not err in reversing the trial court’s default judgment in favor of the driver and passenger because the bus company’s failure to answer the complaint was unintentional. The default judgment was set aside and a new trial held because the failure to answer was due to mistake and the insurer acted quickly upon discovery of the citation by notifying the other parties’ attorney and offering to try the case on its merits. Under principles of equity, the bus company’s motion for a new trial was to be granted if it set up a meritorious defense and if the granting thereof would not have occasioned delay or otherwise worked an injury to the driver and passenger.