EQUITABLE GENERAL INSURANCE COMPANY OF TEXAS, Petitioner, v. Thomas YATES, Respondent, 684 S.W.2d 669

McGEE, Justice. This is an appeal from a

summary judgment rendered in favor of petitioner, Equitable General Insurance Company of Texas, against respondent, Thomas Yates. The issue presented is whether the trial court abused its discretion in granting Yates’ motion for new trial conditioned upon the payment of $500 by Yates to opposing counsel for their attorney’s fees. The court of appeals held that the trial court had no authority to grant a motion for new trial based on such a condition and that the subsequent final order overruling Yates’ motion for new trial, based on his failure to pay the attorney’s fees, was error. 672 S.W.2d 822.

We disagree; however, for the reasons stated herein, we affirm the judgment of the court of appeals. Thomas Yates was awarded compensation by the Industrial Accident Board for injuries sustained while employed by Schepps Dairy. Both the insurance carrier, Equitable General Insurance Company of Texas and Yates filed suit to set aside the award. Equitable General filed a motion for

summary judgment on the grounds that Yates had failed to file his claim for workers’ compensation within six months from the day of injury. Yates did not file a response to the

summary judgment motion until the day of the hearing; no motion for leave of court to file was tendered. The trial court refused to consider the late filed response, granted Equitable General’s motion for

summary judgment and on March 29, 1983 rendered judgment setting aside the award. Yates filed a motion for new trial alleging substantially the same grounds as were in his response to the

summary judgment. On May 9, 1983 an interlocutory order was rendered which provided that the motion for new trial would be granted upon the payment of $500 by Yates to the opposing counsel as attorney’s fees for preparing and presenting a response to Yates’ motion for new trial. The order also stated that a final judgment overruling the motion for new trial would be rendered upon Yates’ failure to pay opposing counsel. Yates did not pay the $500; however, on June 8, 1983 he filed a response to the interlocutory order.

In an affidavit, attached to the response, Yates claimed that he was “financially unable to raise or to pay Five Hundred Dollars.... ” No contest to this oath was filed. A final judgment was rendered denying the motion for new trial on June 9, 1983. A bill of exception perfected the next day states that the trial court, after the affidavit of inability was filed, overruled the motion for new trial. A trial court has long been vested with great discretion in ruling upon a motion for a new trial and, absent manifest abuse of discretion, its action will not be disturbed on appeal. Neunhoffer v.

State, 440 S.W.2d 395, 397 (Tex.Civ.App.—San Antonio 1969, writ ref’d n.r.e.). The latitude of the trial court’s discretion is addressed in Rule 320, which provides: “New trials may be granted and judgment set aside for good cause, on motion or on the court’s own motion on such terms as the court shall direct.” Tex.R.Civ.P. 320. A conditional grant of a motion for new trial based on a party’s payment of costs is well within the trial court’s discretion.

This is especially well established when a default judgment has been rendered and a subsequent motion for new trial is granted, conditioned upon payment of the costs in obtaining the default judgment. Town v. Guerguin, 93 Tex. 608, 610, 57 S.W. 565, 566 (1900). In particular, trial courts are permitted to grant new trials conditioned upon the payment of attorney’s fees, expenses for witnesses, travel and other costs incurred in obtaining the default judgment. United Beef Producers, Inc. v. Lookingbill, 532 S.W.2d 958, 959 (Tex.1976).

Conditional grants of new trial in default judgment cases are governed by the equitable consideration of not causing any injury to the party obtaining the original judgment. Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 393, 133 S.W.2d 124, 126 (1939). Our determination of the present case should be guided by the same principles.

The trial court granted Yates’ motion for new trial conditioned upon his paying the opposing counsel $500 “as attorney’s fees for preparing and presenting the Response to Plaintiff’s Motion for New Trial....” We find the assessment was a proper equitable determination and the trial court was within its discretion to grant a new trial based on such a condition. The court of appeals relied on Continental Oil Co. v.

Henderson, 180 S.W.2d 998 (Tex.Civ.App.—Fort Worth 1944, writ ref'd w.o.m.) in holding that the trial court had no authority to make payment of all expenses for bringing the suit and attorney’s fees a condition in granting a motion for new trial. We agree. Continental Oil, however, determined that a new trial should have been granted as a matter of law based on newly discovered evidence. In addition, the attorney’s fees sought were for the entire trial, not just the expenses of preparing the motion for new trial.

Moreover and most importantly, the parties in Continental Oil took the proper procedural steps, and the expenses incurred were not the result of a failure to file timely responses. While we find that such conditional grants of new trial are permissible based on equitable considerations, in the present case the trial court abused its discretion in rendering final judgment and denying the new trial. Thomas Yates filed an affidavit of inability to pay and no contest was subsequently filed. An uncontested affidavit of inability to pay is conclusive as a matter of law. Pattison v.

Spratlan, 539 S.W.2d 60, 61 (Tex.), cert. denied, 429 U.S. 1001, 97 S.Ct. 531, 50 L.Ed.2d 612 (1976). Although we recognize the general rule that attorney’s fees are not costs, the assessed fees in the present case will be considered in light of Rule 145 and the rule’s intended purpose to guarantee a forum to those unable to pay court costs. Pinchback v. Hockless, 139 Tex. 536, 538, 164 S.W.2d 19, 20 (1942). Accordingly, the trial court abused its discretion by imposing such a monetary condition in the face of an uncontested affidavit of inability to pay. The judgment of the court of appeals is affirmed.

KILGARLIN, J., dissents with an opinion in which POPE, C.J., and SPEARS and GONZALEZ, JJ., join.