Chemject International, Inc. v. Southwestern Bell Telephone Company ( 2007 )

NUMBERS 13-04-567-CV AND 13-06-032-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

CHEMJECT INTERNATIONAL, INC., Appellant,

v.

SOUTHWESTERN BELL TELEPHONE

COMPANY, ET AL., Appellees.

On appeal from the 357th District Court of Cameron County, Texas.

MEMORANDUM OPINION

Before Justices Rodriguez, Garza, and Benavides Memorandum Opinion by Justice Rodriguez

This case involves the settlement of a class action lawsuit brought against appellee Southwestern Bell Telephone Company (SWBT). In appellate cause number 13-04-567-CV, by six issues, appellant Chemject International, Inc. (Chemject), an unnamed class member, appeals from the trial court's granting of SWBT's plea to the jurisdiction and motion to strike Chemject's motion to intervene and from the trial court's order granting a joint motion to establish a settlement administration. In appellate cause number 13-06-032-CV, by nine issues, Chemject appeals from the trial court's granting summary judgments in favor of SWBT and Class Counsel and denying Chemject's motion for new trial in a bill of review proceeding. ⁽¹⁾ We dismiss cause number 13-04-567-CV and affirm the trial court's judgment in cause number 13-06-032-CV.

I. Background A. General Background

The underlying suit (Mireles lawsuit) is a class action lawsuit filed on July 31, 1998, by class representatives, appellees Jose Mireles and Patricia Genuchi (the Class), against appellant SWBT for damages arising out of "municipal charges" paid by approximately five million SWBT residential and business customers in Texas. ⁽²⁾ In December 1999 a cy pres settlement (Mireles Settlement) was reached. ⁽³⁾   The trial court tentatively approved the settlement and approved the form and content of notice sent to class members advising them about the settlement, their right to opt out, or object and to appear at a fairness hearing. After receiving this notice, Chemject chose not to opt out of the class, not to object to the settlement, and not to appear at the fairness hearing. On May 22, 2000, after class certification and settlement fairness hearings on April 27 and May 4, 2000, the trial court certified the Class for settlement purposes and approved the settlement. ⁽⁴⁾  

R. Michael Northrup and Homer Max Wiesen, unnamed class members, challenged the propriety of the settlement by objecting to the settlement in the trial court and by appealing the judgment. ⁽⁵⁾ From these appeals this Court handed down two opinions, one on June 14, 2001, and the second on February 21, 2002. In Northrup v. Southwestern Bell Tel. Co. (Northrup I), 72 S.W.3d 1 (Tex. App.-Corpus Christi 2001, no pet.) (op. on reh'g), we held "that in class action cases where the 'settlement class' device is used-i.e., where the class is certified simultaneously with or subsequent to the settlement of the class action-pre-settlement intervention is not required in order for an unnamed class member to have standing to appeal." Id. at 4-5. In Northrup v. Southwestern Bell Tel. Co. (Northrup II), 72 S.W.3d 16 (Tex. App.-Corpus Christi 2002, pet. denied, in part, and dismissed, in part, as improvidently granted), this Court did not find the form of notice, by newspaper publication and by direct mail to SWBT customers as an insert in regular monthly telephone bills, to be defective. Id. at 19. Furthermore, we concluded that the trial court did not abuse its discretion in holding the cy pres distribution was fair, id. at 20, and affirmed the trial court's order approving the class action settlement. Id. at 22. The Texas Supreme Court issued its final order on February 6, 2004, and this Court's mandate issued on February 25, 2004.

B. Background Specific to Settlement Administration and Intervention Issues in Appellate Cause Number 13-04-567-CV

On March 24, 2003, after this Court's opinions were handed down in 2001 and 2002 but before its mandate issued in 2004, Chemject filed a petition in intervention and a motion to set aside the settlement agreement. It sought to have the settlement agreement and judgment declared void based on information discovered and events occurring during the appeal. On April 8, 2003, SWBT filed its plea to the jurisdiction and motion to strike Chemject's pleadings arguing that the trial court lacked jurisdiction to grant the relief requested.

On June 15, 2004, with the appellate process being complete, SWBT and the Class filed a joint motion to establish a settlement administration in accordance with the settlement agreement, an act they claimed was a ministerial act. On June 17, 2004, the trial court signed an order granting the joint motion. On July 19, 2004, Chemject filed an emergency motion to reconsider and vacate the June 17 order asserting that because the terms of the agreement, as well as circumstances and events occurring since the judgment was signed on May 4, 2000, the trial court's signing of the order was more than merely a ministerial act. On September 17, 2004, SWBT filed a motion for an order clarifying the June 17 order. On September 23, 2004, the trial court signed an order granting SWBT's plea to the jurisdiction and motion to strike and striking Chemject's petition in intervention, and on September 24, 2004, the trial court entered an order clarifying its order establishing settlement administration.

On October 22, 2004, Chemject appealed from the following orders: (1) the June 17 and September 23, 2004 orders establishing a settlement administration; and (2) the September 23, 2004 order granting SWBT's plea to the jurisdiction and motion to strike Chemject's petition in intervention.

C. Background Specific to Bill of Review in Appellate Cause Number 13-06-032-CV

On May 3, 2004, before the trial court ruled on its petition in intervention, Chemject filed a petition for bill of review as a class action on behalf of approximately 5 million SWBT customers, challenging the Mireles settlement. Seeking to have the judgment declared void, Chemject alleged in its bill of review that false representations were made to the trial court and in the class action settlement notices which prevented Chemject and the Class from pursuing meritorious claims against SWBT. ⁽⁶⁾ In October 2004, Class Counsel and SWBT filed motions for summary judgment on Chemject's bill of review, arguing, among other things, that Chemject failed to adduce sufficient evidence to prove the elements for a bill of review, including extrinsic fraud. On November 29, 2004, the trial court denied with prejudice Chemject's bill of review and granted summary judgment for SWBT. The trial court denied with prejudice Chemject's petition for a bill of review and granted summary judgment for Class Counsel on March 21, 2005, declaring that "this summary judgment is a final judgment, and concludes this case." On May 19, 2005, the trial court entered an order denying Chemject's motion for a new trial that it had filed on April 19, 2005, and striking the exhibit attached to Chemject's motion. ⁽⁷⁾ Chemject appealed from the orders denying its bill of review and granting summary judgments and from the order striking the exhibit to the motion for new trial. ⁽⁸⁾

II. Chemject's Petition in Intervention Appellate Cause Number 13-04-567-CV

By six issues, Chemject generally asserts that the trial court had the duty, authority, and jurisdiction to act in this matter, that the settlement agreement and judgment are void, and that the order establishing administration substituted the recipient of proceeds under a class action settlement and was, therefore, not a ministerial act but an impermissible modification of the judgment.

A. Plenary Jurisdiction

By its first and third issues, Chemject asserts that the trial court had the duty, authority, and jurisdiction to rule on the merits of its petition in intervention and its motion to have the class action settlement and agreed judgment declared void because of changed circumstances. We disagree.

As a general proposition, "[a] non-party may . . . successfully intervene post-judgment provided that both the plea is filed and the judgment is set aside within thirty days from judgment." Malone v. Hampton, 182 S.W.3d 465, 468 (Tex. App.-Dallas 2006, no pet.) (citing In re Barrett, 149 S.W.3d 275, 279 (Tex. App.-Tyler 2004, orig. proceeding). "Furthermore, a plea in intervention comes too late if filed after judgment and may not be considered unless and until the judgment has been set aside." Texans United Educ. Fund v. Texaco, Inc., 858 S.W.2d 38, 40-41 (Tex. App.-Houston [14th Dist.] 1993, writ denied); see First Alief Bank v. White, 682 S.W.2d 251, 252 (Tex. 1984) (per curiam) (orig. proceeding) (citing Comal County Rural High School Dist. No. 705 v. Nelson, 158 Tex. 546, 314 S.W.2d 956 (1958)). More importantly, however,

[a]ny document, other than a motion to enforce or clarify, filed after the expiration of the trial court's plenary jurisdiction, would be a nullity as a suit ends when the trial court's plenary power over the proceeding ends. The very purpose of limiting a trial court's plenary power over a proceeding is to foreclose the possibility of suit continuing indefinitely even through a final judgment has been obtained.

Malone, 182 S.W.3d at 470. Likewise, "[j]udicial action taken after the expiration of the court's jurisdiction is a nullity, and any orders signed outside the court's plenary jurisdiction are void." Id. at 468 (citing State ex rel. Latty v. Owens, 907 S.W.2d 484, 485-86 (Tex. 1996)); see In re Dickason, 987 S.W.2d 570, 571 (Tex. 1998) (per curiam) (orig. proceeding).

The trial court's May 2000 order and judgment approving the settlement was the final judgment in this case. Chemject's plea in intervention was filed on March 24, 2003, well after the thirty day extension of plenary power that is allowed under rule 329b. See Tex. R. Civ. P. 329b(c), (d) & (e) (providing trial court's plenary power is thirty days or up to 105 days with appropriately filed motions). Even had the trial court's plenary power been extended to 105 days, it would have expired in early September 2000. Chemject's filings after the trial court's plenary power expired had no legal effect and were a nullity. See In re Dickason, 987 S.W.2d at 571; Malone, 182 S.W.3d at 468. The trial court, therefore, had no duty, no authority, and no jurisdiction to rule on Chemject's plea in intervention and its motion to void the settlement agreement and the agreed judgment. Additionally, any orders signed outside the trail court's plenary jurisdiction were void. See In re Dickason, 987 S.W.2d at 571; Malone, 182 S.W.3d at 468.

B. Appeal Without Intervention

Chemject also appears to be arguing that, as an unnamed class member, it did not need to intervene in order to appeal. In Northrup I, we held that in class action cases where the class is certified simultaneously with or subsequent to the settlement of the class action, pre-settlement intervention is not required in order for an unnamed class member to have standing to appeal. Northrup I, 72 S.W.3d at 4-5, 14. However, even assuming without determining that Chemject could have appealed without intervening below, this argument fails. ⁽⁹⁾  

Texas Rule of Appellate Procedure 26.1(a)(2) provides that the notice of appeal must be filed within thirty days after the judgment is signed, except, among other things, it must be filed within ninety days after the judgment is signed if a motion to modify is timely filed. Tex. R. App. P. 26.1(a)(2); see id. at rule 26.1(d) (setting out that if any party timely files a notice of appeal, another party may file a notice within an applicable period stated above or fourteen days after the first filed notice of appeal, whichever is later). The final judgment approving the settlement was entered on May 4, 2000, with a nunc pro tunc order entered on May 22, 2000. Chemject did not participate in the Northrup appeals. Its appeal from the final judgment was not timely. We overrule Chemject's first and third issues.

C. Due Process

In its second issue, Chemject generally contends, without supporting authority, that the striking of its petition in intervention would constitute a due process violation. See Tex. R. App. P. 38.1(h) (setting out that contentions are to be supported by clear and concise arguments with appropriate citations to authorities and to the record). However, Chemject filed a separate bill of review proceeding. We address the appeal of that proceeding below. Chemject has not explained why the bill of review does not satisfy its due process needs. Thus, this argument is not persuasive, and we overrule Chemject's second issue.  

Because of the disposition of the first three issues, we need not address Chemject's remaining issues in this appeal, cause number 13-04-567-CV. See Tex. R. App. P. 47.1.  

III. Bill of Review Proceeding Appellate Cause Number 13-06-032-CV

Having concluded that the trial court's plenary power had expired, Chemject's challenges to the settlement agreement could only be raised in a bill of review. See Coleman v. Sitel Corp., 21 S.W.3d 411, 413 (Tex. App.-San Antonio 2000, no pet.) (citing Tex. R. Civ. P. 329b(f); Plains Growers, Inc. v. Jordan, 519 S.W.2d 633, 636-37 (Tex.1974); Ex parte Balazik, 631 S.W.2d 198, 199 (Tex. App.-Fort Worth 1982, orig. proceeding)). In Chemject's bill of review proceeding, summary judgments were granted in favor of SWBT and Class Counsel, and this appeal, cause number 13-06-0032-CV, ensued.

By nine issues, Chemject contends the trial court erred in granting summary judgment because (1) SWBT and Class Counsel failed to show that no genuine issue of material fact exists and that they were entitled to judgment as a matter of law, (2) Chemject brought forth more than a scintilla of probative evidence to raise a genuine issue of material fact as to the challenged element of the claims, (3) due process and equal protection rights were violated, and (4) the trial court abused its discretion when it denied Chemject's motion for new trial without an evidentiary hearing and struck Wiesen's deposition testimony and attached documents.

A. Standard of Review

When a trial court's order granting summary judgment does not state the grounds upon which it was granted, the judgment must be affirmed if any of the grounds advanced in the summary judgment motion are meritorious. ⁽¹⁰⁾ Branton v. Wood, 100 S.W.3d 645, 647 (Tex. App.-Corpus Christi 2003, no pet.) (citing Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989)); Boren v. Bullen, 972 S.W.2d 863, 865 (Tex. App.-Corpus Christi 1998, no pet.). Because the propriety of a summary judgment is a question of law, we review the granting of a traditional motion for summary judgment de novo. Branton, 100 S.W.3d at 646 (citing Natividad v. Alexsis, Inc., 875 S.W.2d 695, 699 (Tex. 1994)); Tex. Commerce Bank Rio Grande Valley v. Correa, 28 S.W.3d 723, 726 (Tex. App.-Corpus Christi 2000, pet. denied)). To prevail on a traditional motion for summary judgment, the moving party has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995) (per curiam). Only when the movant meets this burden does the burden shift to the nonmovant to raise a genuine issue of material fact. See M.D. Anderson Hosp. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000) (per curiam); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979). In determining whether there is a genuine issue of material fact, evidence favorable to the nonmovant is taken as true, and all reasonable inferences and doubts are resolved in favor of the nonmovant. Branton, 100 S.W.3d at 646. A traditional summary judgment is proper if the movant conclusively disproves at least one element of each of the plaintiff's causes of action or conclusively establishes each element of an affirmative defense to each of the plaintiff's claims. Velsicol Chem. Corp. v. Winograd, 956 S.W.2d 529, 530 (Tex. 1997) (per curiam); Cathey, 900 S.W.2d at 341. The non-movant has no burden to respond to a traditional motion for summary judgment unless the movant conclusively establishes its cause of action or defense. Willrich, 28 S.W.3d at 23.  

B. Extrinsic Fraud

In its first two issues, Chemject contends that extrinsic fraud existed to support its bill of review. We disagree.

1. The Law

To prevail on a bill of review, Chemject must "allege and prove: (1) a meritorious defense to the cause of action alleged to support the judgment, (2) which [it] was prevented from making by the fraud, accident or wrongful act of the opposing party, (3) unmixed with any fault or negligence of [its] own." Baker v. Goldsmith, 582 S.W.2d 404, 405-07 (Tex. 1979); Mowbray v. Avery, 76 S.W.3d 663, 682 (Tex. App.-Corpus Christi 2003, pet. denied). In addition to the foregoing requirements, "[o]nly extrinsic fraud will support a bill of review." King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 752 (Tex. 2003); see Tice v. City of Pasadena, 767 S.W.2d 700, 702 (Tex. 1989).

Extrinsic fraud "is fraud that denied a party the opportunity to fully litigate at trial all the rights or defenses that could have been asserted." King Ranch, 118 S.W.3d at 752. "Extrinsic fraud is collateral fraud in the sense that it must be 'collateral' to the matter actually tried and not something which was actually or potentially in issue in the trial." Temple v. Atchambo, 161 S.W.3d 217, 224 (Tex. App.-Corpus Christi 2005, no pet.) (citing Montgomery v. Kennedy, 669 S.W.2d 309, 312 (Tex. 1984)); see Manley v. Parsons, 112 S.W.3d 335, 337-38 (Tex. App.-Corpus Christi 2003, pet. denied).

Intrinsic fraud, on the other hand, is any fraud relating to "the merits of the issues that were presented and presumably were or should have been settled in the former action." King Ranch, 118 S.W.3d at 752 ("Issues underlying the judgment attacked by a bill of review are intrinsic and thus have no probative value on the fraud necessary to [support] a bill of review."). Intrinsic fraud is "inherent in the matter considered and determined before the trial court where the fraudulent acts pertain to an issue involved in the original action, or where the acts constituting the fraud were, or could have been litigated therein." Temple, 161 S.W.3d at 224 (quoting Montgomery, 669 S.W.2d at 313). Intrinsic fraud encompasses concealed testimony, perjured testimony, fraudulent instruments, "or any other matter which was actually presented to and considered by the trial court in rendering the judgment assailed." King Ranch, 118 S.W.3d at 752 (providing that the underlying issues resolved by a judgment are considered intrinsic); Tice, 767 S.W.2d at 702; McIntyre v. Wilson, 50 S.W.3d 674, 680 (Tex. App.-Dallas 2001, pet. denied) (setting out that concealing evidence and presenting false evidence constitute intrinsic fraud).

2. Notice

Chemject first argues that there is evidence of extrinsic fraud because SWBT and Class Counsel allegedly made intentional, material and affirmative misrepresentations in the settlement notice sent to Chemject and the Class. Chemject specifically complains of the following alleged misrepresentations in the notice:

SWBT does not keep any of the municipal fees it collects - all of the money goes to the municipalities;

   Class Counsel has conducted sufficient discovery so as to investigate the facts and applicable law regarding the matters in the Lawsuit;

More importantly, discovery in the Lawsuit revealed that it would be extraordinarily difficult, if not impossible, to identify the specific amounts that individual Settlement Class members might recover even if the Lawsuit were successful;

In addition, Class Counsel has determined that the amounts that might be recovered in individual Settlement Class members would be quickly consumed by the overall notice and administration costs necessary to facilitate settlement, because the Settlement Class is exceptionally large (it is estimated at more than five million members), and because the amount of possible recovery varies greatly but generally is not a large sum of money; and

Discovery determined that SWBT cannot independently identify which Class Members suffered what damages. The administrative costs associated with trying to identify and then confirm individual recoveries on a case-by-case basis would exhaust any recovery.

(Emphasis in original.) Chemject further asserts that because these allegedly false statements were contained in a notice approved and agreed to by SWBT, sent by SWBT to class members in their regular SWBT phone bill, and are only confirmable from the records in the sole possession SWBT, SWBT is guilty of extrinsic fraud perpetrated on each member of the class. Chemject also argues that because SWBT, the Mireles plaintiffs, and their respective counsel made these false statements to the district court by including them in the notice approved by the court and affirmed the statements at oral hearings and in pleadings, these false statements are a fraud on the court.

We note that the trial court and this Court approved the notice about which Chemject now complains. Following a fairness hearing the trial court approved the notice. ⁽¹¹⁾ Thus, the notice matter was presented to and considered by the trial court in rendering the judgment assailed. See King Ranch, 118 S.W.3d at 752. Additionally, Northrup challenged settlement issues on appeal, including issues related to the adequacy of the notice to the class members, the calculation of attorney fees, the fairness of the settlement, the designation of cy pres beneficiaries, and the adequacy of representation. See Northrup II, 72 S.W.3d at 19-21. And this Court approved the class notice in Northrup II. See id. The fraud now alleged by Chemject relates to the merits of the issues presented; the same notice issues presumably settled in the former action. See King Ranch, 118 S.W.3d at 752. We conclude, therefore, that the alleged misrepresentations in the notice asserted by Chemject are intrinsic in nature. They have no probative value on the fraud necessary to support a bill of review. Id.

3. Alleged Fraudulent Representations by Class Counsel

Chemject also contends that Class Counsel made various misrepresentations to the members of the Class about the discovery conducted during the Mireles suit, the nature and history of the case, and the benefits of the Mireles Settlement. However, even if these allegations were true, they cannot support a bill of review as a matter of law. The purported fraud must be undertaken by the opposing party, and Chemject, by this argument, is not complaining of actions of the opposing party. Rather it is complaining of actions of counsel for the class of which Chemject is an unnamed member. See Alexander v. Hagedorn, 148 Tex. 565, 226 S.W.2d 996, 1001 (Tex. 1950) (defining extrinsic fraud as "[a] wrongful act committed by the other party to the suit which . . . prevented the losing party either from knowing about his rights or defenses, or from having a fair opportunity of presenting them upon the trial") (emphasis added)). Alleged fraud by a party's own attorney is not sufficient to support a bill of review. King Ranch, 118 S.W.3d at 745; Transworld Fin. Servs. v. Briscoe, 722 S.W.2d 407, 408 (Tex. 1987) (explaining that extrinsic fraud is a wrongful act committed by "the other party to the suit" and holding that "a bill of review petitioner who alleges that he suffered an adverse judgment because of the fraudulent or wrongful acts of his attorney is not excused from the necessity of pleading and proving extrinsic fraud on the part of his opponent"); Gracey v. West, 422 S.W.2d 913, 916 (Tex. 1968). Similarly, negligence, lack of diligence by Class Counsel, or allegations related to Class Counsel's valuation of the claims prior to settlement are insufficient as a matter of law to support a bill of review. See, e.g., Borgerding v. Griffin, 716 S.W.2d 694, 699 (Tex. App.-Corpus Christi 1986, no writ) (improper valuation of marital assets would not support a bill of review).

4. Alleged Fraudulent Representations by SWBT Counsel

Chemject also alleges that SWBT's counsel "knew that SWBT's database containing customer records goes back years, because SWBT's lead counsel had been involved in prior class actions when SWBT's secret databases were discovered"; that SWBT's attorneys presented witnesses "such as Ms. Lotridge and Mr. Torres, when they knew that their testimony was false or materially incomplete"; and that SWBT's attorneys "withheld critical documents." However, in Northrup II we held the following:

The record from the fairness hearing conducted in this case indicates that the trial court based its approval of the settlement on consideration of the appropriate factors. . . . [E]vidence was introduced showing that because of the way SWBT's records were kept, determining the exact amount of damages for each individual plaintiff would be time-consuming and excessively difficult. Moreover, the amount that would likely be owed to each plaintiff would have been very small-i.e., around one dollar. Dean Sherman, from Tulane University School of Law, appeared at the hearing and offered his expert opinion testimony that the settlement was fair.

Northrup II, 72. S.W.3d at 21. The issues regarding SWBT's counsel that Chemject now wants to re-open and re-litigate go to the merits of the settlement's fairness. Thus, Chemject's allegations constitute intrinsic fraud. Fraud that is "inherent in the matter considered and determined before the trial court where the fraudulent acts pertain to an issue involved in the original action, or where the acts constituting the fraud were, or could have been litigated therein." Temple, 161 S.W.3d at 224 (internal quotations omitted).

Issues one and two are overruled. Therefore, reviewing the granting of the rulings on the motions for summary judgment de novo, see Branton, 100 S.W.3d at 646, we conclude that SWBT and Class Counsel have established that there is no genuine issue of material fact regarding the element of extrinsic fraud and that they are entitled to judgment as a matter of law. See Tex. R. Civ. P. 166a(c); Cathey, 900 S.W.2d at 341.  

C. Motion for New Trial

By three issues, Chemject challenges the trial court's denial of its motion for new trial. Chemject first contends, in its ninth issue, that the trial court erred in striking Wiesen's deposition with exhibits that was attached to its motion for new trial.

On March 21, 2005, final judgment was entered in this bill of review proceeding. On April 4, 2005, pursuant to rule 202.1, the 362nd District Court of Denton Count, Texas, granted Chemject's petition for Wiesen's deposition before suit. See Tex. R. Civ. P. 202.1 (providing that a person may petition the court for an order authorizing the taking of a deposition to perpetuate testimony for use in an anticipated suit or to investigate a potential claim or suit). Neither SWBT nor Class Counsel received service of the petition or notice of the hearing on the petition. Wiesen's deposition by written questions was taken with notice only to Wiesen. Chemject informed the trial court that, pursuant to rule 202, it had sought the evidence "anticipating the possibility of a claim against the [class] plaintiff's counsel." On appeal, Chemject asserts that it only sought Wiesen's deposition to investigate a claim or suit, not in anticipation of a suit; thus, no notice to interested parties was required as SWBT urged. See id. at rule 202.3(a). ⁽¹²⁾ Chemject, however, offered the evidence obtained from Wiesen's deposition, not as part of an investigation or even in anticipation of a new lawsuit, but in support of its motion for new trial filed on April 22, 2005, in the existing lawsuit.

Wiesen's deposition was taken after final judgment had been entered and without notice to other parties in the lawsuit. It was then attached as evidence in support of Chemject's motion for new trial. Rule 202, which allows for depositions in certain instances with notice only to the deponent, is not applicable in this case. See id. at rule 202.1(b) & 202.3(a); see also id. cmt. 2 ("The bill of discovery procedure, which Rule 202 incorporates, is equitable in nature, and a court must not permit it to be used inequitably."). The trial court did not abuse its discretion, see City of Brownsville v. Alvarado, 897 S.W.2d 750, 753 (Tex. 1995) (providing that the admission and exclusion of evidence is committed to the trial court's sound discretion), but rather properly struck Wiesen's deposition by written questions with exhibits because the alleged new evidence resulted from the rule 202 deposition. Issue nine is overruled.

Having concluded that the trial court properly excluded Wiesen's deposition with exhibits, there was no newly-discovered evidence to support Chemject's motion for new trial. Thus, the trial court did not abuse its discretion in denying the motion. See Dir., State Employees Workers' Comp. Div. v. Evans, 889 S.W.2d 266, 268 (Tex. 1994) ("In reviewing a trial court's ruling on a motion for new trial, the standard is abuse of discretion."). Issues seven and eight which address the trial court's denial of Chemject's motion for new trial based on newly-discovered evidence and its refusal to hold an evidentiary hearing are also overruled.

D. Due Process and Equal Protection

Finally, in its sixth issue Chemject brings the following due process and equal protection challenges:

Are [Chemject's] and the Mireles class member's constitutional due process and equal protection rights violated, if under Texas law:

(1) the false statements in the settlement notice, or false statements made to the court, are not considered extrinsic fraud for purposes of maintaining a bill of review action;

(2) Appellant's Amicus Curiae filings with the Texas Supreme Court are a res judicata bar to Appellant's bill of review claims; and/or

(3) a petition for bill of review cannot be maintained as a class action as a matter of law?

(Emphasis in original.) Chemject argues that if it "is not allowed to pursue its petition for bill of review, despite the substantial evidence it has presented, [Chemject] and the class will be left without a legal remedy for the loss of their legal rights that were fraudulently compromised and released in Mireles," and "[s]ince the Notice did not afford the class the opportunity to present their objections, or opt out, it failed to comply with due process." Chemject also asserts that "[i]n Mireles, there is no legitimate state interest in denying [Chemject] the ability to pursue its petition for bill of review, individually or as a class action, and [Chemject] and the class would be denied equal protection should that occur."

Chemject, however, has raised these constitutional issues for the first time on appeal; therefore, they are waived. City of San Antonio v. Schautteet, 706 S.W.2d 103, 104 (Tex. 1986) (per curiam) ("Even constitutional challenges not expressly presented to the trial court by written motion, answer or other response to a motion for summary judgment will not be considered on appeal as grounds for reversal."); Birdo v. Ament, 814 S.W.2d 808, 811 (Tex. App.-Waco 1991, writ denied) (concluding that even constitutional errors, such as due process complaints, are waived if not raised first in the trial court); see Wood v. Wood, 159 Tex. 350, 320 S.W.2d 807, 813 (Tex. 1959); Walker v. Employees Ret. Sys., 753 S.W.2d 796, 798 (Tex. App.-Austin 1988, writ denied).

Relying on Bunton v. Bentley, 153 S.W.3d 50 (Tex. 2004) (per curiam), Chemject asserts that it can raise constitutional issues for the first time on appeal. In Bunton, the supreme court concluded that Bunton's claim that exemplary damages were excessive in light of the actual harm could be raised for the first time on appeal to the supreme court. Id. at 53. The court determined that it could be raised at that time because the claim arose only after the court of appeals reduced the compensatory award and exemplary damages had to bear a reasonable relation to the defendant's conduct and to the actual harm suffered. Id.

In the present appeal, absence of extrinsic fraud was a ground presented by SWBT and Class Counsel as a basis for granting the motions for summary judgment. We affirmed on that basis rather than res judicata or the appropriateness of a class maintaining a bill of review action. See Branton, 100 S.W.3d at 647 (explaining that when a summary judgment does not state the grounds upon which it was granted, the judgment must be affirmed if any of the grounds advanced in the summary judgment motion are meritorious). Chemject has not explained how its constitutional claims arose from or how they bear a relationship to this determination. See Tex. R. App. P. 38.1(h) (providing contentions must be supported by clear and concise arguments with appropriate citations to authorities and to the record). Chemject's constitutional issues could have been presented to the trial court in Chemject's response to the motions for summary judgment. The constitutional issues it attempts to raise on appeal did not arise only after our affirmation of the summary judgment on the basis of no extrinsic fraud. Bunton, therefore, provides no authority for this issue.

Citing Pirtle v. Gregory, 629 S.W.2d 919, 920 (Tex. 1982) (per curiam), Chemject also argues that it would not be in the public interest-fundamental error-to deprive an entire class of 5 million citizens a remedy in a case where there has been fraud in the class action notice and on the court, "especially considering that the purpose for giving class members notice of a class action settlement is to fulfill constitutional due process requirements." Pirtle provides that "[f]undamental error survives today in those rare instances in which the record shows the court lacked jurisdiction or that the public interest is directly and adversely affected as that interest is declared in the statutes or the Constitution of Texas." Id. Nonetheless, based on our analysis of the issues presented in this appeal from the denial of a bill of review challenging an underlying class action lawsuit, this argument is not persuasive. See Briscoe, 722 S.W.2d at 407 ("The grounds upon which a bill of review can be obtained are narrow because the procedure conflicts with the fundamental policy that judgments must become final at some point."); Montgomery, 669 S.W.2d at 312 (stating bills of review are scrutinized "with extreme jealousy and the grounds on which interference [with a final judgment] will be allowed are narrow and restricted"). Chemject's sixth issue is overruled. ⁽¹³⁾  

IV. CONCLUSION

Accordingly, we dismiss appellate cause number 13-04-567-CV and affirm the trial court's judgment in appellate cause number 13-06-032-CV.

NELDA V. RODRIGUEZ

Justice

Memorandum delivered and filed

this 25th day of January, 2007.

1.

Because the appeals are based on the same procedural facts and related arguments, we dispose of them in one opinion.

2.

"A 'municipal charge' is a fee that SWBT was charged by municipalities for use of public rights-of-way. SWBT passed this charge on to its customers in their bills." Northrup v. Southwestern Bell Tel. Co. (Northrup I), 72 S.W.3d 1, 2 n.2 (Tex. App.-Corpus Christi 2002, no pet.) (op. on reh'g).

3.

"The cy pres doctrine has been used to disburse proceeds of a class action lawsuit when the amounts owing to each individual plaintiff are exceedingly small and/or identification of the amount due each individual would be excessively difficult." Northrup v. Southwestern Bell Tel. Co. (Northrup II), 72 S.W.3d 16, 22 (Tex. App.-Corpus Christi 2003, pet. denied) (citing Susan Beth Farmer, More Lessons Learned from the Laboratories: Cy Pres Distributions in Parens Patriae Antitrust Actions Brought by State Attorneys General, 68 Ford. L. Rev. 361, 393 (1999)). The agreed settlement required SWBT to pay $10 million into a settlement fund, with $3 million in cash and $7 million in same-as-cash service credits.

4.

On May 4, 2000, a final judgment was entered approving the settlement. A nunc pro tunc order was entered on May 22, 2000, correcting a clerical error.

5.

In Northrup II, this court determined that Wiesen failed to show he was a member of the class and was, therefore, without standing to prosecute the appeal. Northrup II, 72 S.W.3d at 19-20.

6.

Chemject sued SWBT and Class Counsel, Michael P. Lynn, P.C.; Jeffrey M. Tillotson, P.C.; Michael R. Cowen; John T. Cox III; and Lynn Tillotson & Pinker, LLP., in the underlying bill of review class action.

7.

Exhibit A consisted of Wiesen's written deposition with twelve attachments.

8.

We also note that two appeals, including the present one, were filed from the trial court's denial of the bill of review and grant of the summary judgment motions. The notice of appeal filed on December 28, 2004, from the order granting summary judgment in favor of SWBT was interlocutory in nature and was dismissed for want of jurisdiction. See Chemject Intl Inc. v. Southwestern Bell Tel. Co., No. 13-04-684-CV, 2006 Tex. App. LEXIS 677, at *1 (Tex. App.-Corpus Christi, Jan. 26, 2006, no pet.) (per curiam).  

Additionally, Chemject's notice of appeal also identifies the trial court's June 9, 2005 order denying its motion to abate, or in the alternative, motion for continuance. However, on appeal, Chemject sets out that it is only appealing from the orders granting the motions for summary judgment and the order denying its motion for new trial. See Appellant's Brief at ix-x and Appendix No.1.

9. This argument would apply only to an appeal from the final judgment and not to an appeal from the later orders in this case which we have determined are void. In re Dickason, 987 S.W.2d 570, 571 (per curiam) (orig. proceeding).

10.

On appeal, it is urged that SWBT and Class Counsel conclusively negated one element of Chemject's bill of review, that being extrinsic fraud. This is a traditional summary judgment argument. Because we agree and because the trial court did not specify the grounds it relied on, we will set out the standard of review applicable only to the traditional motion for summary judgment.

11.

Additionally, Southwestern Tariff Analyst (STA), a purported class member, attempted to intervene and object to the Mireles Settlement. Representing STA were Marc Hill and Thomas Bray, two of Chemject's attorneys in the present proceeding. STA participated in the final fairness hearing of the Mireles suit, questioning witnesses, presenting its own expert testimony, and challenging the terms of the Mireles Settlement. Mirroring the same objections Chemject now asserts, STA objected to the Mireles Settlement because: (1) STA estimated that the value of the claims to exceed the settlement amount; (2) STA believed that Class Counsel failed to identify illegitimate fees that SWBT charged to the consumer; (3) STA believed that Class Counsel misstated the amount of illegal charges that SWBT had passed on to consumers, and that the representation by Class Counsel that such charges were "nominal" was incorrect; and (4) STA believed that individual damages were, contrary to Class Counsel's representation, capable of accurate and expeditious calculation. STA dropped its objection to the Mireles Settlement as part of an agreement whereby the Plaintiff Class and SWBT narrowed the scope of the release, which allowed STA to pursue a separate class action against SWBT on behalf of SWBT business customers. STA did not otherwise opt out of the Settlement Class. Therefore, STA was bound by the final judgment entered by the trial court. The agreement between STA, the Class and SWBT was read into the record at the final fairness hearing.

12.

Rule 202.3(a) provides the following:

At least 15 days before the date of the hearing on the petition, the petitioner must serve the petition and a notice of the hearing--in accordance with Rule 21a-on all persons petitioner seeks to depose and, if suit is anticipated, on all persons petitioner expects to have interests adverse to petitioner's in the anticipated suit.

Tex. R. Civ. P. 202.3(a).

13.

Because of our disposition of this appeal on the basis of the absence of extrinsic fraud, we need not address the remaining sub-issues in Chemject's sixth issue or issues three through five which involve arguments related to res judicata and the appropriateness of a class action appeal from a bill of review ruling. See Tex. R. App. P. 47.1.