Jacob T. Jones v. Service Credit Union

ACCEPTED
06-14-00077-CV
SIXTH COURT OF APPEALS
TEXARKANA, TEXAS
1/9/2015 5:30:07 PM
DEBBIE AUTREY
CLERK
NO. 06-14-00077-CV
FILED IN
6th COURT OF APPEALS
TEXARKANA, TEXAS
IN THE SIXTH DISTRICT COURT OF A PPEALS A T PM
1/12/2015 4:06:00
TEXARKANA, TEXAS DEBBIE AUTREY
Clerk
___________________________________________________
JACOB T. JONES
Appellant,
v.
SERVICE CREDIT UNION,
Appellee.
___________________________________________________
ON APPEAL FROM THE COUNTY COURT AT LAW,
HOPKINS COUNTY, TEXAS
CAUSE NO. CV 42,210, THE HONORABLE AMY MCCORKLE SMITH,
PRESIDING
___________________________________________________
APPELLANT’S BRIEF
Nate Smith
Attorney at Law
SMITH & SMITH LAW FIRM
300 Oak Avenue
Sulphur Springs, Texas 75482
ATTORNEY FOR APPELLANT
JANUARY 9, 2015
--APPELLANT REQUESTS ORAL ARGUMENT--
Appellees’ Brief i NO. 06-14-00077-CV
IDENTITY OF PARTIES AND COUNSEL
Parties to the Underlying Litigation
Appellant Appellee
Jacob T. Jones Service Credit Union
Trial and Appellate Counsel
Nate Smith Service Credit Union did not
appear at trial
Smith & Smith Law Firm Appellate Counsel: Paul Sartin
300 Oak Avenue Sartin Law Firm
Sulphur Springs, Texas 75482 4514 Travis Street, Suite 300
(903) 439-3000 Dallas, Texas 75205
(903) 439-3110 (fax) (214) 599-0448
(214) 599-0602 (fax)
Appellees’ Brief ii NO. 06-14-00077-CV
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL………………………………..ii
INDEX OF AUTHORITIES………………………………………………...v
ISSUES PRESENTED…………………………………………………….viii
RECORD ON APPEAL…………………………………..………………...ix
I. STATEMENT OF FACTS…………………………………………...1
II. SUMMARY OF ARGUMENTS……..………………………………7
III. STANDARD OF REVIEW…………………………………………..8
IV. ARGUMENT POINT 1 –
1. Procedural Elements of Bill of Review Were Met…………………...9
A. Independent action where no other relief available….………...9
B. Requirements of Bill of Review Pleadings...…………………10
2. Evidentiary Elements of Bill of Review Were Met………………....11
A. General Evidentiary Requirements for Bill of Review…….....11
B. General Three Elements are Modified When Due Process
Violation is Plead……………………………………………..……………11
C. No Hearing Set, No Notice Given, and No Hearing
Conducted……………………………………………………………….....12
i. If Prior Judgment was Post-Answer Default
Judgment…………………………………………………………….13
ii. If Prior Judgment was Summary Judgment……………14
3. Violation of Appellant's Due Process Rights…………………..........15
Appellees’ Brief iii NO. 06-14-00077-CV
A. Lack of Notice….……….........................................................15
B. Due Process Violation Relieves from Proving Diligence and
Negligence Requirements...………………………………………………..16
Conclusion of Point 1………………............................................................19
V. ARGUMENT POINT 2 –
A. Appellant Had the Right to Present Evidence of Non-receipt to
the Court………………………………………………………….…….......20
B. Presumption that Appellant Received Trial Court's Order and
Judgment was Rebutted…………………………………..………………...21
Conclusion of Point 2………………………………………………............24
VI. ARGUMENT POINT 3 –
A. Trial Court Had a Duty to Grant Appellant's Motion for No-
Answer Default Judgment…….....................................................................25
B. Appellant's Pleadings were Sufficiently Plead to Warrant No-
Answer Default Judgment………………………………..………………...26
VII. ARGUMENT POINT 4 –
A. Collateral Attack on Prior Judgment........................................27
VIII. CONCLUSION AND PRAYER……………………………………28
CERTIFICATE OF SERVICE……………………………………………..29
Appellees’ Brief iv NO. 06-14-00077-CV
LIST OF AUTHORITIES
Cases Page(s)
$429.30 v. State,
896 S.W.2d 363 (Tex. App.—Houston [1st Dist.] 1995)…………………..13
Austin Indep. School District v. Sierra Club,
495 S.W.2d 878 (Tex. 1973)………………………………………………28
Baker v. Goldsmith,
582 S.W.2d 404 (Tex. 1979)…………...……………….……………..10, 21
Caldwell v. Barnes,
754 S.W.3d 93, (Tex. 2004)………………………………….…................12
Cash v. Beaumont Dealers Auto Auction, Inc.,
275 S.W.3d 915 (Tex.App.—Beaumont 2009).......................................12, 17
Dolgencorp v. Lerma,
288 S.W.3d 922 (Tex.2009) ……………………………………………….13
Etheredge v. Hidden Valley Airpark Ass'n,
169 S.W.3d 378 (Tex.App.—Fort Worth 2005)……..…………………….14
GO Enterprises Corp. v. Rajani,
No. 05-12-01353-CV, 2014 Tex.App.LEXIS 5595 (Tex. App.—Dallas, May
22, 2014)……………………………………………………………………26
Holt Atherton Indus., Inc. v. Heine,
835 S.W.2d 80 (Tex. 1992)……………………...……………………..26, 27
In re Lewis,
No. 07-04-0432-CV, 2004 Tex.App. LEXIS 8377 (Tex. App.—Amarillo
Sept. 17, 2004)…………………………………..…………………………26
In re Ramirez,
994 S.W.2d 682 (Tex. App.—San Antonio 1998)…………………………25
Appellees’ Brief v NO. 06-14-00077-CV
Kuntoplast of America, Inc. v. Formosa Plastics Corp., USA,
937 S.W.2d 455 (Tex. 1996)…………………………………………….…26
Lewis v. Blake,
876 S.W.2d 314 (Tex. 1994)……..………………………………………...14
Lopez v. Lopez,
757 S.W.2d 721 (Tex. 1988)……..…………………………………….12, 15
Mabon Limited v. Afri-Carib Enters.,
369 S.W.3d 809 (Tex. 2012)………..……..….......................................12, 17
Medeles v. Nunez,
923 S.W.2d 659 (Tex.App.—Houston [1st Dist.] 1996)…………………….9
Peralta v. Heights Medical Center, Inc.,
485 U.S 80 (1988)……………...……………........................................15, 16
Pessel v. Jenkins,
125 S.W.3d 807 (Tex.App.--Texarkana 2004)……………...….13, 21, 22, 23
Ponsart v. Citicorp Vendor Fin.,
89 S.W.3d 285 (Tex.App.--Texarkana 2002)………………………..9, 11, 16
Ramsay v. State,
249 S.W.3d 568, 574 (Tex.App.—Waco 2008)……….................................8
Smith v. Holmes,
53 S.W.3d 815 (Tex.App.—Austin 2001)…………………………………13
Wembley Investment Company v. Herrera,
11 S.W.3d 924 (Tex. 1999)…….......................................................21, 22, 23
Rules
CIV. PRAC. & REM. CODE §16.051……………………………………..10
TEX. R. CIV. P. 21(a)…………………………………..………………….13
TEX. R. CIV. P. 166a(c)………………………………..……………...13, 14
Appellees’ Brief vi NO. 06-14-00077-CV
TEX. R. CIV. P. 245..…………………………………..………………….13
Appellees’ Brief vii NO. 06-14-00077-CV
ISSUES PRESENTED
POINT 1: The trial court erred in denying Appellant's Bill of Review
because it was conclusively established at trial that Appellant's due
process rights had been violated in the underlying suit and that
Appellant met all requirements for bill of review relief.
POINT 2: The trial court abused its discretion and misapplied the law
when it contradicted the only evidence before the court and imputed
notice of judgment against Appellant and subsequent failure of
Appellant to avail himself of all legal remedies.
POINT 3: The trial court erred in refusing to grant no-answer default
judgment in favor of Appellant when all pleading and statutory
requirements had been met and the evidence offered supported
Appellant's pleadings for Bill of Review.
POINT 4: The trial court erred in refusing to vacate its previous order
that was facially void because it was dated before the underlying suit
was filed.
Appellees’ Brief viii NO. 06-14-00077-CV
RECORD ON APPEAL AND APPENDIX OF EXHIBITS
The record on appeal consists of a one-volume Clerk’s Record, a four-
volume Reporter’s Record, with a Master Index as Volume 1, hearing on
June 25, 2014, as Volume 2, hearing on July 29, 2014, as Volume 3 and the
Motion for New Trial Hearing Transcript as Volume 4. The Clerk’s Record
will be cited by page number (i.e. “CR1”). The Reporter’s Record will be
cited by volume, then by page number and line(s) (i.e. “RR V1, P1:1”).
When applicable, this brief will specifically reference these documents in
accordance with the appendix.
Appellees’ Brief ix NO. 06-14-00077-CV
NO. 06-14-00077-CV
IN THE SIXTH DISTRICT COURT OF APPEALS AT TEXARKANA, TEXAS
___________________________________________________
JACOB T. JONES,
Appellant,
v.
SERVICE CREDIT UNION,
Appellee.
___________________________________________________
ON APPEAL FROM THE COUNTY COURT AT LAW FOR
HOPKINS COUNTY, TEXAS
CAUSE NO. 42,210, THE HONORABLE AMY MCCORKLE SMITH,
PRESIDING
___________________________________________________
APPELLANT’S BRIEF
TO THE HONORABLE SIXTH COURT OF APPEALS:
Appellant Jacob T. Jones respectfully submits this Appellant’s Brief.
STATEMENT OF FACTS
This is an appeal from the Hopkins County Court at Law whereby the
Honorable Amy McCorkle Smith refused to grant a Motion for Default
Judgment and denied Appellant's Petition for Bill of Review after hearing
the Motion for Default Judgment on June 25, 2014, and a second hearing on
the motion for default judgment on July 29, 2014. As will be detailed below
the motion for default judgment was in a new cause of action for bill of
review under cause number CV42,210. The petition for bill of review
challenged, both directly and indirectly, a previous judgment from the same
trial court in cause number CV41,466 ("underlying suit").
Summary of Salient Facts
1. Suit filed by Appellees on March 8, 2013.
2. Answer filed by Appellant on April 5, 2013.
3. Motion for Summary Judgment filed by Appellees on October 30,
2013.
4. No notices ever sent and no hearings ever held.
5. Judgment #1 dated on February 20, 2014 (refers to summary
judgment).
6. Judgment #2 dated on February 20, 2013 (dated one year earlier –
claims to be the final judgment).
7. Clerk mailed judgment to last known address on February 27, 2014.
8. Appellant first learned of judgment on April 28, 2014.
9. Bill of Review filed May 28, 2014.
Appellant's Petition for Bill of Review was filed on May 28, 2014,
and the pleadings clearly specified Appellant's claims for bill of review
relief, which included due process violations in the underlying suit. (CR6-9).
Appellee was served the petition for bill of review with process on June 3,
2014. (CR16). The return of service was filed in the clerk's file on June 9,
2014. (CR14-15). After Appellee failed to file an answer or appearance by
the Monday next following the expiration of 20 days from service, Appellant
2
filed a Motion for Default Judgment for his Petition for Bill of Review on
June 25, 2014. (CR17-18). Attorney for Appellant asked the trial court to
take judicial notice of both cause numbers in the hearing for default
judgment on June 25, 2014. (RR V2, P4:17-20).
Relevant Facts from Underlying Suit
The underlying suit was filed by Appellee on March 8, 2013, and
plead contract and suit on account causes of action against Appellant.
(CR63-70). Appellant represented himself pro se and filed an answer and
general denial of Appellee's claims on April 5, 2013. (CR93). Appellant
filed its Motion for Summary Judgment, or in the Alternative, Motion for
Default Judgment on October 30, 2013. (CR97). The Court admitted that
"On February 20, 2014, the trial court granted Plaintiff's Motion for
Summary Judgment without hearing and further entered a separate final
judgment in favor of [Appellee]". (CR48,¶9; CR62). The clerk's file in the
underlying suit is completely void of any notice given to Appellant for this
hearing and Appellant testified at trial that he never received any notice of
any hearing. (RR V5, P16-23). The Court subsequently admitted that the
trial court should have had a hearing and should have set the hearing on
Appellee's motion to set a deadline to respond to the motion. (RR V3,
P12:14-20).
3
Despite the lack of notice of hearing or hearing whatsoever, the trial
court signed two judgments in response to Appellee's motion. The first
judgment rendered without hearing was dated February 20, 2014, and
entitled "Order on Motion For Summary Judgment." (CR161). This
purported summary judgment does not mention summary judgment evidence
considered but rather establishes that the allegations in Appellant's Original
Petition are proved by a preponderance of the evidence. (CR161). The
second judgment rendered without hearing was dated February 20, 2013,
and entitled "Final Judgment." (CR162). This judgment does not mention
Appellee's Motion for Summary Judgment, but rather establishes that:
"Citation was served on Defendant according to the law and the
citation was returned to the clerk where it remained on file for the time
required by law. The Court has reviewed the evidence, read the
pleadings, heard the argument of counsel, if any, and is of the opinion
that the allegations of [Appellee's] Original Petition have been proved by a
preponderance of the evidence…" (CR162,¶1).
In summary, despite Appellant's answer on file, the trial court rendered
judgment without hearing and without ever setting a hearing. The trial court
rendered what it referred to as a summary judgment but what actually
proved the elements of a no-answer default judgment.
4
The clerk's file indicates these two judgments were mailed to
Appellant via standard mail on February 27, 2014. (CR164-67).
Original Petition for Bill of Review
Appellant first found out about the two judgments rendered against
him in the underlying suit on or about April 28, 2014—sixty-eight days after
the judgments were signed. (RR V3, P5:24—P6:17). Appellant testified at
his Motion for Default Judgment on the Bill of Review that he never
received any notice of the hearing or of the judgments from the court in the
underlying suit. (RR V3, P7:11-23). Appellant filed his petition for Bill of
Review on May 28, 2014, because it was the only option available to him to
challenge the judgments from the underlying suit. (RR V3, P6:15-20).
Appellant's Bill of Review pleadings specified that because Appellant had
not received any notice of hearing or judgment that he was entitled to Bill of
Review relief because of violations of his due process rights. (CR7).
Appellant's Bill of Review pleadings also established an indirect attack
against the underlying suit judgment in that the judgment taken in the
underlying suit was dated February 20, 2013, which was nearly a month
before the suit was filed. (CR7; CR162-63). The trial court took these facts
under advisement after the first hearing for default judgment on June 25,
2014. (CR5).
5
By July 29, 2014, at the second hearing requesting default judgment,
Appellee still had not filed an answer or made an appearance in the Bill of
Review action. At the second hearing, despite the fact that Appellant's were
correctly plead and claimed a due process violation, and despite the fact that
Appellee was served with process and failed to answer or make an
appearance in the trial court, the trial court refused to grant a default
judgment in favor of Appellant. (CR7; CR14-16). Furthermore, the trial
court denied Appellant's Bill of Review, finding that Appellant failed to
avail himself of all legal remedies available to him because the trial court
imputed notice and receipt of the judgment against Appellant due to the
clerk's record indicating the judgments had been mailed standard mail to
Appellant. (RR V3, P7:11-17; P8:24-25; P10:1-8; P10:19—P11:5; P12:9-13;
P14:2—P15:5). In opposition to Appellant's testimony, who denied the
receipt of any notice of hearing or judgment in the underlying suit, the trial
court imputed receipt and notice of the underlying suit judgments against
Appellant. Id. Appellant testified that the address listed on the clerk's
documents was at all times a valid permanent address but that he did not
receive any notice or judgment from the court. (RR V3, P7:11-17; P9:1-19;
P13:19—14:1).
6
SUMMARY OF ARGUMENTS
POINT 1: The trial court erred in denying Appellant's Bill of Review
because it was conclusively established at trial that Appellant's due
process rights had been violated in the underlying suit and that
Appellant met all requirements for bill of review relief.
POINT 2: The trial court abused its discretion and misapplied the law
when it contradicted the only evidence before the court and imputed
notice of judgment against Appellant and subsequent failure of
Appellant to avail himself of all legal remedies.
POINT 3: The trial court erred in refusing to grant no-answer default
judgment in favor of Appellant when all pleading and statutory
requirements had been met and the evidence offered supported
Appellant's pleadings for Bill of Review.
POINT 4: The trial court erred in refusing to vacate its previous order
that was facially void because it was dated before the underlying suit
was filed.
7
STANDARD OF REVIEW – DENIAL OF BILL OF REVIEW
As a general matter, a trial court's ruling on a bill of review is
reviewed on appeal under an abuse-of-discretion standard.1 However, the
determination of whether a bill-of-review plaintiff has made a prima facie
showing of a meritorious claim or defense (or of a meritorious ground for
appeal) is a question of law and that determination from the trial court is
reviewed de novo on appeal.2
At trial, the trial court summarily determined that Appellant did not
make a prima facie showing of a meritorious defense in his petition for bill
of review. (CR47,¶5). The trial court also contradicted the only evidence
before it and summarily determined that Appellant failed to exercise due
diligence and did not avail himself of all legal remedies available to him
prior to filing his petition for bill of review. (CR48,¶¶3-4). Appellant
believes these two determinations should be reviewed by this Court of
Appeals de novo. The trial court's refusal to grant Appellant's bill of review
despite factual evidence which proved each and every element required for
bill of review relief should be reviewed under an abuse of discretion
standard. The trial court's imputing receipt and notice of its prior judgment
1
Ramsay v. State, 249 S.W.3d 568, 574 (Tex.App.—Waco 2008).
2
Id.
8
against Appellant in contradiction to the only evidence offered the court
should be reviewed under an abuse of discretion standard.
ARGUMENT
POINT 1 The trial court erred in denying Appellant's Bill of Review
because it was conclusively established at trial that Appellant's due
process rights had been violated in the underlying suit and that
Appellant met all requirements for bill of review relief.
1. PROCEDURAL ELEMENTS OF BILL OF REVIEW WERE
MET
A. Independent action where no other relief is available
A bill of review is an independent action to set aside a judgment that
is no longer appealable or subject to challenge by a motion for new trial.3 A
bill of review is a new suit filed in the same trial court as the previous
default, with service on all parties affected by the original judgment.4
Appellant filed his original petition for bill of review under a new and
separate cause number in the same court that rendered the judgment in the
underlying suit. (CR6). Appellant also had Appellee served with process
under the new cause of action. (CR7-8, CR47, ¶6). At the hearing on July
3
Ponsart v. Citicorp Vendor Fin., 89 S.W.3d 285, 288-89 (Tex.App.—Texarkana 2002).
4
Medeles v. Nunez, 923 S.W.2d 659, 661 n.2 (Tex.App.—Houston [1st Dist.] 1996, writ
denied).
9
29, 2014, Appellant testified that he did not receive any notice of the court's
judgment(s) on February 20, 2014, and did not know of the existence of the
judgment(s) until April 28, 2014, when Appellant was applying for a home
loan. (RR V3, P5:24—P6:17; RR V3, P7:11-23; RR V3, P6:15-20). As has
been stated already in this brief, Appellee did not appear or answer in the bill
of review proceedings. Therefore, Appellant's testimony that he did not
know of the existence of the prior judgment(s) until sixty-eight days after the
fact was the only evidence before the trial court. The trial court lost plenary
power in the underlying suit on March 21, 2014—thirty days after the
signing of the Final Judgment—and upon discovery of the prior order and
judgment, Appellant filed his bill of review on May 28, 2014, "to set aside a
judgment that is no longer appealable or subject to a motion for new trial."3
B. Requirements of Bill of Review Pleadings
In order to invoke the equitable powers of the court, the plaintiff in a
bill of review case must file a petition with sworn facts—stated with
particularity—that satisfy the various elements required.5 A bill of review
must be filed after the trial court's plenary power expires, but within the
residual four-year statute of limitations.6
5
Baker v. Goldsmith, 582 S.W.2d 404, 408 (Tex. 1979).
6
CPRC §16.051
10
Appellant's petition for bill of review was sworn and stated with
particularity the cause number of the underlying suit, the judgment to be set
aside, the due process violations in the underlying suit, and the lack of fault
or negligence of Appellant. Appellant's petition for bill of review was filed
approximately three months after the trial court rendered its judgment
without hearing in the underlying suit and therefore Appellant clearly met
the four year limitation period to bring a suit for bill of review relief.
2. EVIDENTIARY ELEMENTS OF BILL OF REVIEW WERE
MET
A. General Evidentiary Requirements for Bill of Review
A petitioner for bill of review must ordinarily prove: 1) a meritorious
claim or defense to the cause of action alleged to support the judgment, 2)
which it was prevented from making because of fraud, accident, or wrongful
act of the opposite party, and 3) that was untainted by any fault or
negligence of its own.7 A petitioner must plead and prove each element, and
without such proof the trial court should deny the bill of review. Id.
B. General Three Elements are Modified When Due Process
Violation is Claimed
When the defendant to the underlying suit had no notice of trial
setting, that defendant is not required to prove he had a meritorious defense
7
Ponsart, 89 S.W.3d at 288-89.
11
to the underlying suit or that he was justified in his failure to assert that
defense.8 Thus, when a defendant-petitioner claims it did not receive notice
of the trial or default judgment, it must prove only the third element (i.e. no
fault or negligence in allowing a default to be rendered).9 However, a bill of
review plaintiff who was not served with process or who did not receive
notice of a dispositive hearing cannot be at fault or negligent in allowing a
default judgment to be rendered in the underlying suit.10
The fact that there was no hearing and obviously no setting for
hearing is clearly established in the record in the underlying suit. The trial
court admitted that it should have had a hearing and that it rendered its
judgment(s) without hearing in the underlying suit. (CR48,¶9; RR V3,
P12:14-20). The trial court even went as far as to identify the failure of the
court to set a hearing for the summary judgment as an "injustice." (CR49,
¶3).
C. No Hearing Set, No Notice Given, and No Hearing Conducted
Because Appellant filed a general denial answer in the underlying
suit, he was entitled by the Texas Rules of Civil Procedure to have had 45
days written notice for a final hearing or 21 days written notice for a hearing
8
Lopez v. Lopez, 757 S.W.2d 721, 723 (Tex. 1988); Caldwell v. Barnes, 154 S.W.3d 93,
96 (Tex. 2004).
9
Mabon Ltd. v. Afri-Carib Enters., 369 S.W.3d 809, 812 (Tex. 2012).
10
Caldwell, 154, S.W.3d at 97; Cash v. Beaumont Dealers Auto Auction, Inc., 275
S.W.3d 915, 918-19 (Tex.App.—Beaumont 2009, no pet.).
12
on summary judgment.11 (CR93). Appellee's final motion asked for
Summary Judgment, or in the alternative Post-Answer Default Judgment.
(CR97-105). The trial court has categorized its judgment in the underlying
suit at different times as both a "summary judgment," (CR161, CR48, ¶9), as
well as a "post-answer default judgment." (CR47, ¶¶2-3).
i. If Prior Judgment was Post-Answer Default Judgment:
A defendant that filed an answer has a constitutional right to notice of
all hearings.12 By filing an answer, a defendant prevents the court from
rendering a default judgment without a hearing.13 A defendant that filed an
answer (or appeared in the case) must be given 45 days' notice of a setting
that results in a post-answer default judgment.14 A post-answer default is
valid only if the defendant received notice of the setting for trial or other
dispositive hearing at which the default was rendered.15
The trial court admitted in its Amended Findings of Fact and
Conclusions of Law that Appellant did file a general denial answer in the
underlying suit. (CR48, ¶7). Appellant testified at the hearing on July 29,
2014, that he never received any notice of any kind about a hearing prior to
11
TRCP 21a, 166a(c), 245
12
Smith v. Holmes, 53 S.W.3d 815, 817 (Tex.App.—Austin 2001, no pet.).
13
Dolgencorp v. Lerma, 288 S.W.3d 922, 930 (Tex. 2009).
14
TRCP 245; Pessel v. Jenkins, 125 S.W.3d 807, 808-09 (Tex.App.—Texarkana 2004,
no pet.).
15
$429.30 v. State, 896 S.W.2d 363, 366 (Tex.App.—Houston [1st Dist.] 1995, no writ).
13
the judgment being taken. (RR V3, P5:16-23). The trial court also admitted
that there was no hearing prior to its rendering final judgment in the
underlying suit. (CR48, ¶9). Lastly, the trial court admitted that it should
have had a hearing on Appellee's motion(s) before rendering judgment in the
underlying suit. (RR V3, P12:14-20).
ii. If Prior Judgment was Summary Judgment:
A summary judgment movant is required to give 21 days notice of the
hearing on a summary judgment motion.16 If timely notice is not given to a
nonmovant on a motion for summary judgment, the summary judgment will
be reversed.17
The trial court referenced its judgment in the underlying suit as a
summary judgment many times. The trial court signed its order granting
summary judgment and referenced it as summary judgment in the court's
Findings of Fact and Conclusions of Law. (CR49, ¶1; CR161). The trial
court admitted that there should have been a hearing on the motion for
summary judgment. (RR V3, P12:14-16). The trial court even referenced a
set of Request for Admissions from the underlying suit as summary
judgment evidence. (CR48, ¶¶2, 8). However, the order and judgment
16
TRCP 166a(c); Lewis v. Blake, 876 S.W.2d 314, 316 (Tex. 1994).
17
Etheredge v. Hidden Valley Airpark Ass'n, 169 S.W.3d 378, 383 (Tex.App.—Fort
Worth 2005, pet. denied).
14
rendered do not mention summary judgment evidence or identify the burden
of proof being "no genuine issue of material fact…" Instead, both the Order
of the court and the Final Judgment which were challenged in the bill of
review, include a finding that the "allegations of Appellee's pleadings have
been proved beyond a preponderance of the evidence." (CR161, ¶1; CR162,
¶1). The trial court's order and final judgment appear to operate as a post-
answer default, but regardless of the form of the judgment(s), the required
notices were not given to Appellant.
3. VIOLATION OF APPELLANT'S DUE PROCESS RIGHTS
A. Lack of Notice
Where a post-answer judgment was entered without proper knowledge
and with substantial adverse consequences to the party in default, the
holding is plainly infirm under the Due Process Clause of the Fourteenth
Amendment.18 When the record establishes that a [post-answer party] had no
actual or constructive notice of the trial setting, the lower courts err in
requiring him to show that he had a meritorious defense as a condition to
granting his motion for new trial, as such a requirement violates the
Fourteenth Amendment under Peralta.19
18
Peralta v. Heights Medical Center, Inc., 485 U.S. 80, 86 (1988).
19
Lopez v. Lopez, 757 S.W.2d 721, 723 (Tex. 1988).
15
Plaintiff's sworn pleadings and live testimony at the trial in this cause
establish that he never received notice of any hearing prior to the judgment
in the underlying suit. (RR V3, P5:16-23; CR6-9). The trial court admitted
that no hearing for the summary judgment/post-answer default motions was
ever set and that there was no hearing prior to judgment. (RR V3, P11:6-10;
P12:15-20; CR48, ¶9). As was stated previously in this brief, Appellee did
not answer or appear in the bill of review proceedings and the only evidence
before the trial court and now on appeal was offered by Appellant. Just as
the Texas Supreme Court analyzed the Peralta decision above, the record in
the current case conclusively established—unopposed and without
objection—that Appellant did not have actual or constructive notice of any
trial setting in the underlying suit.18 Under state and federal law, these acts
and omissions constitute clear constitutional due process violations in the
underlying suit and entitle Appellant to bill of review relief.
B. Due Process Violation Relieves from Proving Diligence and
Negligence Requirements
Normally, the fact an injustice has occurred is not sufficient to justify
bill of review relief.20 A petitioner must also show he is free from
negligence. Id. Generally, bill of review relief is available only if a party has
20 Ponsart, 89 S.W.3d at 288-89.
16
exercised due diligence in pursuing all adequate legal remedies against a
former judgment and, through no fault of its own, has been prevented from
making a meritorious claim or defense by the fraud, accident, or wrongful
act of the opposing party. Id.
However, where a due process violation has occurred in the
underlying suit, a defaulting party is not required to attack the former
judgment as a prerequisite for obtaining relief under an equitable bill of
relief.21 The Texas Supreme Court has rejected the contention that failing to
file a motion for new trial shows a party's lack of diligence.22 It is well
established that once a bill of review plaintiff proves the absence of service
or the lack of notice of the dispositive trial setting, the plaintiff is then
relieved of proving the traditional bill of review elements and the court
should grant the plaintiff's bill of review.23 Once a bill of review plaintiff
proves it had no notice of the trial setting or the default judgment, it need not
establish that it diligently monitored the status of the case. Id. 21
In addition to the analysis of the traditional bill of review elements
above, after clearly demonstrating to the trial court that a due process
21
Cash v. Beaumont Dealers Auto Auction, Inc., 275 S.W.3d 915, 919 (Tex.App.—
Beaumont 2009).
22
Id. (citing Ross v.National Center for the Employment of the Disabled, 197 S.W.3d
795, 798 (Tex. 2006) (per curiam)).
23
Mabon Limited v. Afri-Carib Enterprises, Inc., 369 S.W.3d 809, 810 (Tex. 2012) (per
curiam).
17
violation had occurred in the underlying suit, Appellant was also relieved
from the traditional requirement for bill of review relief that he exercised
due diligence and availed himself of all available legal remedies. This was a
major point of disagreement for the trial court. The trial court admitted that
no hearing was set or conducted in the underlying suit and even identified
the lack of hearing as an "injustice." (CR49, ¶3). However, the trial court
explained to Appellant that a due process violation in the underlying suit
didn't matter if Appellant did not avail himself of the remedies available to
him. (RR V3, P11:9-25). This contention from the trial court is in direct
contradiction to the law cited above. The Texas Supreme Court case Mabon
Limited is especially on point that once Appellant proved the lack of notice
of a dispositive trial setting, he was relieved of proving the traditional bill of
review elements.21 Mabon Limited goes on to further explain that once
Appellant proved the lack of notice, he had no duty to monitor the case.Id.21
As stated multiple times in this brief, the only evidence before the court in
the bill of review proceedings was the sworn pleadings and the live
testimony of Appellant, which proved without objection that Appellant had
no notice of the dispositive trial setting in the underlying suit. (RR V3,
P5:15-23). Furthermore, the clerk's record is totally devoid of any notices
of hearings.
18
In order to rule that Appellant failed to exercise due diligence and
failed to exhaust all legal remedies available to him, the trial court imputed
notice and knowledge of the judgment on Appellant in contrast with the
evidence before the court. Specifically, the trial court disregarded
Appellant's testimony and imputed receipt and knowledge of the order and
judgment in the underlying suit against Appellant because the clerk's file had
a document that indicated the order and judgment were mailed to Appellant.
(RR V3, P8:24-25; P10:1-8; P10:19—11:5; P12:9-13; P14:2—15:5). The
trial court imputed a duty to monitor the case against Appellant. (RR V3,
P12:9-22). Lastly, the trial court opposed the evidence before it and imputed
constructive knowledge of the order and judgment against Appellant and
found that the imputed knowledge amounted to Appellant's failure to
exercise due diligence. (RR V3, P10:1-8; P14:2-25; V4, P9:17-19). The
imputed notice and knowledge of the trial court against Appellant will be
discussed further in Point #2 in this brief.
CONCLUSION OF POINT 1
To summarize, Appellant was and is entitled to the bill of review
relief he has requested. Appellant has met each and every pleading,
procedural and evidentiary requirement for bill of review relief as
demonstrated above. The record is abundantly clear that Appellant offered
19
clear and concise pleadings and evidence without objection to the trial court
that a due process violation occurred in the underlying suit. The trial court
was not a party or adversary to Appellant and it rose to an abuse of
discretion for the trial court to ignore the only actual and admissible
evidence before the court and render a judgment not supported by—in fact
contradicting—the evidence. In a broader sense, this Court of Appeals is
able to review this matter de novo because once Appellant offered clear and
concise evidence of the glaring due process violations in the underlying suit,
the trial court misapplied the law cited above by denying Appellant's bill of
review.
POINT 2: The trial court abused its discretion and misapplied the law
when it contradicted the only evidence before the court and imputed
notice of judgment against Appellant and subsequent failure of
Appellant to avail himself of all legal remedies.
A. Appellant Had the Right to Present Evidence of Non-receipt to
the Court
It is acceptable for a Bill of Review complainant to allege and prove
that he was prevented from presenting his contentions in the former action
by a mistake or error of the court or a functionary thereof in the discharge of
20
official duties.24 Furthermore, a petitioner may also present proof of non-
receipt to the trial court in a bill of review.25
Appellant incorporates by reference the law, evidence, and arguments
urged above. In summary, there was no basis for the court to prohibit or
disqualify Appellant's testimony that he did not receive notice of the
dispositive hearing or the court's order and judgment in the underlying suit.
B. Presumption that Appellant Received Trial Court's Order and
Judgment Was Rebutted
A certificate by a party or an attorney of record or the return of an
officer, or the affidavit of any person showing service of a notice is prima
facie evidence of service and this rule sets up a presumption that notice of a
trial setting was duly received.26 However, this presumption is rebutted by
an offer of proof that the notice was not received. Id. It is abuse of
discretion for a trial court, by the fact that notice sent via regular mail is
unreturned to assert constructive knowledge of notice on a party. Id.
Appellant again incorporates by reference the law, evidence, and
arguments urged above. Appellant's live testimony at the trial in this cause
was an offer of proof that he never received notice of any hearing prior to
24
Baker v. Goldsmith, 582 S.W.2d 404, 407 (Tex. 1979).
25
see Wembley Investment Company v. Herrera, 11 S.W.3d 924, 927 (Tex. 1999).
26
Pessel v. Jenkins, 125 S.W.3d 807, 809-10 (Tex.App.—Texarkana 2004).
21
the post-answer default judgment in the underlying suit or any notice from
the Court that the post-answer default had been rendered against him.
The Pessel case listed above describes a scenario much like this case,
in which a trial court imputes constructive notice on a party simply due to
notice supposedly being sent to a party via standard mail.27 However, this
Court of Appeals ruled that the actual evidence in the trial of that case
showed that no notice was received. Id. This Court of Appeals specifically
found that "The fact the notice sent by regular mail was not returned was not
evidence of 'selective acceptance/refusal of certified mail'…[and] the
[appealing party] offered an affidavit which unequivocally denied receiving
notice of the trial setting. Considering these facts, the trial court erred in
determining the [appealing party] received constructive notice." Id.
Wembley Investment Company v. Herrera, a case trial court
admittedly followed in its denial of Appellant's Bill of Review, also supports
the Pessel reasoning above. (RR V3, P15:9-11). In Wembley, the Texas
Supreme Court noted "although a certificate of service [on a document
which has an effect on appellate timelines] creates a presumption that it was
received, that presumption is not evidence and it vanishes when opposing
27
Pessel, 125 S.W.3d at 809-10.
22
evidence is introduced that the document was not received."28 The Supreme
Court continued in Wembley: "when the sender of a document relies on
office routine or custom to support an inference that the document was
mailed, the sender must provide corroborating evidence that the practice was
actually carried out." Id. The Wembley opinion finally summarized that
without corroborating evidence from the sender that a document was mailed
and received, such evidence is "only an opinion that the notice was probably
sent, and does not controvert…affidavits attesting that the [document] was
not received." Id.
In the bill of review action, just as in Pessel and Wembley, the trial
court inappropriately asserted a constructive notice on Plaintiff based on
documents in the clerk's file for the underlying suit which indicates that a
notice of judgment was sent to Plaintiff from the Hopkins County District
Clerk via regular mail on or about February 27, 2014. (CR164-67). Any
presumption of Appellant's actual receipt of the letter(s) from the clerk was
rebutted (Wembley states the presumption "vanished") upon Plaintiff's trial
testimony that he received no such notice.26 In sharp contrast to Wembley
and Pessel, in the bill of review proceedings the Defendant offered no
contrary evidence or affirmative defenses but was in default. At the hearing
28
Wembley, 11 S.W.3d at 927-28.
23
on July 29, 2014, it was the trial court who prosecuted Appellant and
initiated the assertion of constructive knowledge against Appellant. On its
own initiative, the trial court impeached Appellant's sworn pleadings and
trial testimony that Appellant did not receive notice of hearing or judgment,
and this evidence was the only evidence before the Court. Upon such a
contrary offer of evidence, under Wembley, the sender of the notice is bound
to produce contrary evidence and the sender in this case was the non-party
Hopkins County District Clerk.26
CONCLUSION OF POINT 2
In sum, the bill of review proceedings amounted not only to an abuse
of discretion in rendering judgment not supported by and in direct
contradiction of the evidence before the trial court, but also in contradiction
of on-point law from this Court of Appeals and the Texas Supreme Court.
The clerk's documents indicating that the clerk had mailed Appellant the
trial court's order and judgment via standard mail may have created a
presumption of receipt against Appellant in his bill of review proceedings.
However, that presumption vanished when Appellant offered the court his
sworn pleadings and live testimony in rebuttal to that presumption. It was
an abuse of discretion and misapplication of law for the trial court to impute
receipt and constructive knowledge of the trial court's prior order and
24
judgment against Appellant in contradiction of the evidence in the bill of
review proceedings. It was also an abuse of discretion and misapplication
of the law for the trial court to then deny Appellant's bill of review based
upon its judgment that Appellant failed to exercise due diligence and avail
himself of legal remedies available to him because of the imputed receipt
and notice.
POINT 3: The trial court erred in refusing to grant no-answer default
judgment in favor of Appellant when all pleading and statutory
requirements had been met and the evidence offered supported
Appellant's pleadings for Bill of Review.
A. Trial Court Had a Duty to Grant Appellant's Motion for No-
Answer Default Judgment
In determining whether or not a default judgment should be entered,
the trial judge is required to ascertain the sufficiency of the petition as well
as the service of process.29 Rule of Civil Procedure 239 authorizes a
plaintiff to take a judgment by default against any defendant who has not
29
In re Ramirez, 994 S.W.2d 682, 683 (Tex.App.—San Antonio 1998).
25
filed an answer; and a trial court has a non-discretionary duty to render a
default judgment against a non-answering defendant.30
Appellant incorporates by reference all law, evidence, and arguments
urged above. As described above, Appellant's pleadings met all
requirements for bill of review relief. Furthermore, Appellant put on
evidence to the trial court that Defendant Service Credit Union was served
with process on June 3, 2014, and failed to file any answer with this Court
before the default judgment trial on July 29, 2014. (RR, V2, P11:12-16).
The trial court agreed in its Amended Findings of Fact and Conclusions of
Law that Appellee was served with process, did not file an answer, and
Appellant's motion for default judgment was timely. (CR48, ¶¶6-7).
B. Appellant's Pleadings were Sufficiently Plead to Warrant No-
Answer Default Judgment
A no-answer default judgment operates as an admission of the
material facts alleged in the plaintiff's petition, except for damages.31 So
long as the facts set out in the petition alleged a cause of action, then the
default judgment case is conclusively established.32 When the petition
establishes a cause of action, an appellant is precluded from challenging the
30
Kunstoplast of America, Inc. v. Formosa Plastics Corp., USA, 937 S.W.2d 455, 456
(Tex. 1996); In re Lewis, No. 07-04-0432-CV, 2004 Tex. App. LEXIS 8377, *5,
(Tex.App.—Amarillo Sep. 17, 2004).
31
Holt Atherton Indus. Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992).
32
GQ Enterprises Corp. v. Rajani, No. 05-12-01353-CV, 2014 Tex. App. LEXIS 5595,
at *9 (Tex.App.—Dallas May 22, 2014) (mem. op.)
26
legal and factual sufficiency of the evidence supporting liability in a no-
answer default judgment.33
Appellant incorporates by reference all law, evidence, and arguments
urged above. As also described above, Appellant's pleadings for bill of
review relief met all requirements for bill of review relief. The pleadings
were sworn and clearly identified the due process violation in the underlying
suit. Appellant did not seek damages on his motion for default judgment but
only sought the bill of review relief in which he was entitled by law.
Appellant's pleadings also included a collateral attack on the trial court's
final judgment in the underlying suit because it was dated February 20,
2013, which if true would have been signed one month before Appellee ever
filed the underlying suit. (CR63, 163). Either of these causes of action were
sufficient for the trial court to grant Appellant's motion for no-answer
default judgment against Appellee and vacate the court's prior order.
33
Holt Atherton., 835 S.W.2d at 83.
27
POINT 4: The trial court erred in refusing to vacate its previous order
that was facially void because it was dated before the underlying suit
was filed.
The purpose of a collateral attack is to avoid the judgment, which can
be accomplished when the judgment is tainted by a jurisdictional effect.34
Appellant incorporates by reference all law, evidence, and arguments
urged above. The trial court's Final Judgment was dated February 20,
2013—before the date the suit was filed. (CR63, 163). This fact was pled by
Appellant and argued to the trial court in the bill of review proceedings.
(CR7; RR V2, P4:15—5:5). From the face of the Final Judgment, the trial
court did not yet have personal or subject matter jurisdiction to render a
judgment against Appellant because Appellee did not file the underlying suit
until March 8, 2013.
CONCLUSION AND PRAYER
For the reasons stated above, Appellant prays that this Court find that
the trial court erred as a matter of law in denying Appellant's bill of review
and grant Appellant's bill of review de novo in this cause of action. In the
alternative, for the reasons stated above, Appellant prays this Court find that
the trial court abused its discretion in denying Appellant's bill of review,
34
Austin Indep. School District v. Sierra Club, 495 S.W.2d 878, 881 (Tex. 1973).
28
motion for no-answer default judgment, and refusing to vacate a facially
void judgment and grant Appellant a new trial on the merits of this cause of
action, or for any other remedies available to Appellant at law or in equity.
Respectfully submitted,
Nate Smith /s/_____________
Nate Smith
Texas Bar No. 24088441
300 Oak Avenue
Sulphur Springs, Texas 75482
Tel. (903) 439-3000
Fax. (903) 439-3110
Attorney for Appellant
Jacob T. Jones
CERTIFICATE OF SERVICE
I certify that on January 9, 2015, a true and correct copy of
Appellant’s Brief was served on each party or attorney of record in
accordance with the Texas Rules of Civil and Appellate Procedures.
Nate Smith /s/___________________
Nate Smith
29