David Riley v. Mid-Century Insurance ( 2005 )

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Opinion issued June 16, 2005

    In The

Court of Appeals

For The

First District of Texas

  NO. 01-04-00750-CV

____________

DAVID RILEY, Appellant

V.

MID-CENTURY INSURANCE COMPANY, Appellee

On Appeal from the County Civil Court at Law No. 3

Harris County, Texas

Trial Court Cause No. 790872

MEMORANDUM OPINION

          Appellant, David Riley, challenges a summary judgment granted in favor of appellee, Mid-Century Insurance Company (“Mid-Century”), in his bill of review proceeding to set aside a default judgment that was rendered against him in the underlying lawsuit. In two issues, Riley contends that the trial court erred in granting summary judgment for Mid-Century.

          We affirm.

Factual and Procedural Background

          On or about March 3, 1995, Riley was involved in an automobile collision with a car driven by Winston Gay, who incurred personal injuries, lost wages, and property damages. Mid-Century, Gay’s insurer, reimbursed Gay and, subsequently, as Gay’s subrogee, filed the underlying lawsuit against Riley.

           In the underlying lawsuit, Mid-Century, on September 19, 1997, filed a motion requesting that the trial court authorize service of citation on Riley by attaching such citation to the door at “2400 Briarwest Boulevard, #1104, Houston , Texas, 77077, Defendant’s usual place of abode.” Mid-Century’s motion incorporated two affidavits executed by Harris County Deputy Constable S. Peng. In his first affidavit, executed on May 19, 1997, Peng described four unsuccessful attempts to personally serve Riley at the 2400 Briarwest location. Furthermore, Peng testified that he verified with Riley’s roommate that 2400 Briarwest, #1104, was Riley’s correct address. In his second affidavit, executed on July 22, 1997, Peng described four unsuccessful efforts to serve citation on anyone over 16 years of age at the 2400 Briarwest location. Peng also testified that the apartment manager confirmed that Riley still resided at 2400 Briarwest, #1104, with his girlfriend. Peng then requested a court order authorizing substituted service of citation by attaching the citation and original petition to the door of Riley’s “usual place of abode,” described as 2400 Briarwest Boulevard, #1104.

          On September 22, 1997, the trial court executed an order that authorized service of citation on Riley by attaching the citation to the door at 2400 Briarwest, #1104. Subsequently, on October 6, 1997, Constable Peng served citation upon Riley by attaching a copy of the citation, Mid-Century’s original petition, and the trial court’s order to the front door of 2400 Briarwest, #1104. On October 9, 1997, Peng filed his return reflecting service upon Riley. Thereafter, on December 5, 1997, the trial court rendered a default judgment in favor of Mid-Century, awarding Mid-Century $4,486.22 in damages, interest, and costs of court.

          Subsequently, on April 1, 2003, Riley filed a petition for bill of review in the instant cause, asserting that the December 5, 1997 default judgment was wrongfully obtained because he was not served with citation.

          On February 23, 2004, Riley filed a motion for summary judgment, asserting that, (1) on October 6, 1997, he no longer resided at 2400 Briarwest, #1104, Houston, Texas, and that, (2) in February 2002, he first learned about the default judgment when he read a copy of his credit report. In support of his summary judgment motion, Riley attached (1) Constable Peng’s return reflecting service on October 6, 1997, by attaching a copy of the citation, Mid-Century’s petition, and the trial court’s order on the door of 2400 Briarwest, #1104; (2) his own affidavit, in which he testified that, as of October 6, 1997, he had moved from 2400 Briarwest, #1104, was never apprised of the “doorhanger citation,” and was not apprised of the default judgment until he had purchased his credit report in 2002; (3) the affidavit of Julianna Riley, who testified that, as of October 6, 1997, Riley had moved from 2400 Briarwest, #1104, and was residing with her in a house located at 1922 Westlake Boulevard, Houston, Texas; (4) two SBC telephone bills, dated September 29, 1997, and October 29, 1997, respectively, reflecting that Riley’s mailing address was 1922 Westlake Boulevard, Houston, Texas; and (5) a credit report, dated February 17, 2002, that contained a reference to the December 5, 1997 judgment.

          Mid-Century, on March 9, 2004, filed its own motion for summary judgment, arguing that it was entitled to summary judgment as a matter of law because (1) the record affirmatively established strict compliance with the manner and mode of service; (2) Riley failed to file his bill of review within the residual four-year statute of limitations ; and (3) Riley’s 13-month delay in filing his bill of review after he first learned of the default judgment constituted laches. In support of its summary judgment motion, Mid-Century attached (1) Constable Peng’s first affidavit executed on May 19, 1997; (2) Peng’s second affidavit executed on July 22, 1997; and (3) Peng’s return of service. Although Riley filed a response to Mid-Century’s summary judgment motion on April 1, 2004, he did not attach any additional evidence to his response.

          On March 18, 2004, the trial court, without specifying the grounds on which it relied, signed an order denying Riley’s motion for summary judgment. On April 2, 2004, the trial court, without specifying the grounds on which it relied, signed an order granting Mid-Century’s motion for summary judgment.

Standard of Review

          To prevail on a summary judgment motion, a movant has the burden of proving that it is entitled to judgment as a matter of law because there is no genuine issue of material fact. Tex. R. Civ. P. 166a(c); Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 23 (Tex. 1990); Farah v. Mafrige & Kormanik, 927 S.W.2d 663, 670 (Tex. App.—Houston [1st Dist.] 1996, no writ). When a defendant moves for summary judgment, it must either (1) disprove at least one element of the plaintiff’s cause of action or (2) plead and conclusively establish each essential element of its affirmative defense, thereby defeating the plaintiff’s cause of action. Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995); Farah, 927 S.W.2d at 670.

          A defendant moving for summary judgment on the affirmative defense of limitations has the burden to conclusively establish that defense. KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). Thus, the defendant must conclusively prove when the cause of action accrued and negate the discovery rule, if it applies and has been pleaded or otherwise raised by the plaintiff. Id. If the movant establishes that the statute of limitations bars the action, the non-movant must then adduce summary judgment proof raising a fact issue in avoidance of the statute of limitations. Id.

          When reviewing a summary judgment, we assume that all evidence favorable to the non-movant is true and indulge every reasonable inference and resolve all doubts in favor of the non-movant. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). Furthermore, when a summary judgment does not specify or state the grounds on which the trial court relied, the non-movant on appeal must negate any grounds on which the trial court could have relied, and we will affirm the summary judgment on appeal if any of the grounds presented in the motion is meritorious. See Harwell v. State Farm Mut. Auto. Ins. Co., 896 S.W.2d 170, 173 (Tex. 1995); Mellon Serv. Co. v. Touche Ross & Co., 17 S.W.3d 432, 435 (Tex. App.—Houston [1st Dist.] 2000, no pet.). In other words, a non-movant is required to show that each ground alleged in the motion for summary judgment was insufficient to support summary judgment. Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995).

          When both parties move for summary judgment, we review the summary judgment evidence presented by both sides. Comm’rs Ct. of Titus County v. Agan, 940 S.W.2d 77, 81 (Tex. 1997); Cigna Ins. Co. of Tex. v. Rubalcada, 960 S.W.2d 408, 411-12 (Tex. App.—Houston [1st Dist.] 1998, no pet.). “The proper scope for a trial court’s review of the evidence for a summary judgment encompasses all evidence on file at the time of the hearing or filed after the hearing and before judgment with permission of the court.” Judwin Props., Inc. v. Griggs & Harrison, 911 S.W.2d 498, 503 (Tex. App.—Houston [1st Dist.] 1995, no writ).

Statute of Limitations

          In his second issue, Riley argues that the trial court erred in granting Mid-Century’s summary judgment motion against him on Mid-Century’s affirmative defense of limitations because he did not “have knowledge that a judgment had been entered against him less than four years after Entry of Judgment.” Riley correctly notes that a bill of review must be brought “no later than four years after the cause of action accrues.” However, Riley asserts that the discovery rule deferred the accrual of his bill-of-review action until he knew, or through the exercise of reasonable diligence should have known, of the facts giving rise to the action. Riley concludes that, because his “cause of action did not accrue until [he] knew about the judgment and that did not happen until 2002,” he brought his bill of review “well within the statute of limitations.”

           A petition for a bill of review must be filed within the residual four-year statute of limitations. Tex. Civ. Prac. & Rem. Code Ann. § 16.051 (Vernon 1997); Caldwell v. Barnes, 975 S.W.2d 535, 538 (Tex. 1998); Law v. Law, 792 S.W.2d 150, 153 (Tex. App—Houston [1st Dist.] 1990, writ denied). This Court has previously held that the only exception to the four-year limitations period is for the petitioner to show extrinsic fraud. Law, 792 S.W.2d at 153 (emphasis added). Extrinsic fraud is fraud that denied a party the opportunity to fully litigate at trial all the rights or defenses that the party was entitled to assert. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 752 (Tex. 2003); Tice v. City of Pasadena, 767 S.W.2d 700, 702 (Tex. 1989) (orig. proceeding); Law, 792 S.W.2d at 153. It is wrongful conduct practiced outside of the adversary trial, such as keeping a party away from court, making false promises of compromise, or denying a party knowledge of the suit, that affects the manner in which the judgment is procured. Ince v. Ince, 58 S.W.3d 187, 190 (Tex. App.—Waco 2001, no pet.) (citing Alexander v. Hagedorn, 226 S.W.2d 996, 1002 (Tex. 1950)); Law, 792 S.W.2d at 153. Extrinsic fraud is collateral fraud in the sense that it must be collateral to the matter actually tried and not something that was actually or potentially at issue in the trial. Law, 792 S.W.2d at 153. Fraudulent failure to serve a defendant with personal service, in order to obtain a judgment against him without actual notice to him, has been held to be extrinsic fraud. Layton v. Nationsbanc Mortgage Corp., 141 S.W.3d 760, 763 (Tex. App.—Corpus Christi 2004, no pet.); Lambert v. Coachmen Indus. of Tex., Inc., 761 S.W.2d 82, 87 (Tex. App.—Houston [14th Dist.] 1988, writ denied); Forney v. Jorrie, 511 S.W.2d 379, 384-85 (Tex. Civ. App.—San Antonio 1974, writ ref’d n.r.e.).

          Here, the default judgment in the underlying lawsuit against Riley was rendered on December 5, 1997. The record shows that Riley did not learn of the judgment until February 17, 2002—over four years after the default judgment was entered. In his affidavit attached to his own summary judgment motion, Riley testified that he first learned of the default judgment after obtaining a credit report dated February 17, 2002. However, the record shows that Riley did not argue extrinsic fraud in his original bill of review petition, in his motion for summary judgment, or in his response to Mid-Century’s motion for summary judgment. At best, he argued that Constable Peng did not confirm that Riley still resided at 2400 Briarwest, #1104, on October 6, 1997, when Peng posted the citation, Mid-Century’s original petition, and the trial court’s order authorizing substituted service on the front door. However, Riley points to no evidence in the record showing that Mid-Century prevented him from participating in the lawsuit by fraudulently failing to serve him with personal or substituted service in order to obtain judgment without actual notice to him. See Forney, 511 S.W.2d at 384-85.

          Although a bill of review is an equitable proceeding, the fact that an injustice may have occurred is not sufficient to justify relief by bill of review. Wembley Inv. Co. v. Herrera, 11 S.W.3d 924, 927 (Tex. 1999); see Alexander, 226 S.W.2d at 998. Because Riley’s bill of review was not filed within the four-year limitations period and because Riley did not raise a genuine issue of fact regarding extrinsic fraud, we hold that the trial court did not err in granting Mid-Century’s summary judgment motion on the basis of limitations.

          We overrule Riley’s second issue.

Conclusion

          Having held that the trial court did not err in granting Mid-Century’s summary judgment motion on the grounds of limitations, we need not address Riley’s first issue in which he argues that the default judgment against him in the underlying lawsuit was wrongfully obtained because service by the “doorhanger method” was “not proper under the statute.”

          We affirm the judgment of the trial court.

                                                                        Terry Jennings

                                                                        Justice

Panel consists of Chief Justice Radack and Justices Jennings and Hanks.