Summary
stating that petitioner in bill-of-review proceeding must establish he was free from fault or negligence in letting default judgment be taken, even if, presumably, petitioner did not receive notice of the default judgment trial setting
Summary of this case from Thottumkal v. SidhuOpinion
No. 14-02-01000-CV.
Memorandum Opinion filed October 2, 2003.
Appeal from the County Civil Court at Law No. 1, Harris County, Texas, Trial Court Cause No. 768,283.
Affirmed.
Panel consists of Chief Justice BRISTER and Justices ANDERSON and SEYMORE.
MEMORANDUM OPINION
This is an appeal from the trial court's denial of appellant Fouad Abou-Trabi's petition for a bill of review challenging a post-answer default judgment in a breach of contract case brought by appellee Best Industrial Uniform Supply, Inc. We affirm.
Factual and Procedural Background
In 1997, Best was engaged in the business of renting uniforms to companies for their industrial workers. Abou-Trabi owns and operates a used-auto-parts business under the assumed name of Acorn Foreign Auto Parts. In September 1997, Jerry Field, an Acorn employee, entered into a five-year contract under which Best was to provide uniforms on a weekly basis to five Acorn employees. Either Abou-Trabi or his employees paid for the uniforms for "the better part of a year," but then stopped paying.
In November 1998, Best sued Abou-Trabi for breach of contract. In its petition, Best stated Abou-Trabi could "be served with process at 2103 Thompson Crossing Drive, Richmond, Texas 77469." The Thompson Crossing address was Abou-Trabi's residential address until July 1997 and his former wife's address in November 1998.
On November 19, 1998, a private process server served the petition on Abou-Trabi at 4909 West 34th Street in Houston, Abou-Trabi's business address. Abou-Trabi then telephoned Shannon Nash, an attorney who had previously represented Abou-Trabi in an unrelated matter. Abou-Trabi asked Nash to see whether he could take the case. On November 23, 1998, Abou-Trabi sent a facsimile of the petition to Nash. When, after two days, he had not heard from Nash, Abou-Trabi filed a pro se answer on November 25. In the answer, Abou-Trabi listed his address as "4909 W 34th St. Houston, Tx 77092" and his telephone number as "(281) 433-3984." Abou-Trabi did not send a copy of his pro se answer to anyone.
It was Nash's understanding Abou-Trabi had hired him. With the answer date approaching, Nash called Abou-Trabi's office and learned Abou-Trabi had left the country. Feeling obligated to do so, Nash filed an answer on November 30, 1998, and sent it by certified mail, return receipt requested, to Peter Pratt, Best's attorney. Nash believed he mailed a copy of the answer to Abou-Trabi, but, because the case was old, he no longer had the correspondence file which would have contained the documentation indicating he had done so. The only address Nash had for Abou-Trabi was the Thompson Crossing address.
Nash testified he checked with the clerk's office to see whether an answer had been filed, but at the time he checked there was no notice of it on the computer.
On June 18, 1999, the court ordered trial set for November 22, 1999. The copy of the order was sent to Nash, not to Abou-Trabi. After Nash received the scheduling order, he telephoned Abou-Trabi to let Abou-Trabi know they had a trial date and that Abou-Trabi needed to pay a retainer. Abou-Trabi informed Nash he had filed his own answer and wanted to proceed pro se. On July 20, 1999, Nash filed a motion to withdraw, and on August 11, the trial court granted the motion. Nash sent a copy of his motion to withdraw to Abou-Trabi by certified mail, return requested, to the Thompson Crossing address.
On November 22, 1999, the trial court dismissed the case for want of prosecution. The copy of the dismissal order was sent to Abou-Trabi at the Thompson Crossing address. Best moved to reinstate the case, the trial court granted the motion, and trial was set for January 3, 2000. On January 3, 2000, Abou-Trabi did not appear, and the trial court rendered a default judgment in favor of Best in the full amount of Best's liquidated damages. The certificate of last known address for Abou-Trabi on the judgment gives the Thompson Crossing address, and the notice of judgment was sent to Abou-Trabi at the Thompson Crossing address.
Texas Rule of Civil Procedure 239a provides in relevant part:
At or immediately prior to the time . . . final default judgment is rendered, the party taking the same or his attorney shall certify to the clerk in writing the last known mailing address of the party against whom the judgment is taken, which certificate shall be filed among the papers in the cause. Immediately upon the signing of the judgment, the clerk shall mail written notice thereof to the party against whom the judgment was rendered at the address shown in the certificate, and note the fact of such mailing on the docket. . . . Failure to comply with the provisions of this rule shall not affect the finality of the judgment.
Tex.R.Civ.P. 239a.
In March 2002, Abou-Trabi, represented by counsel, filed a petition for bill of review challenging the default judgment. He alleged, in part, he "had no notice, and thus did not receive his constitutional right to due process, as he received no notice of two (2) trial settings, a Motion to Reinstate, nor of the Default judgment entered in this cause." At the bill of review hearing, the court admitted Pratt's and Abou-Trabi's depositions, and Nash and Abou-Trabi testified.
Pratt's deposition testimony concerned the collection procedures he had followed on Best's behalf. Pratt stated he sent everything to the Thompson Crossing address.
Nash testified about his representation of Abou-Trabi in the earlier, unrelated, case. Nash also testified about Abou-Trabi's initial contact concerning the present case, about filing the answer, and about his subsequent withdrawal as counsel. The Thompson Crossing address was the only address Nash had for Abou-Trabi.
Although Abou-Trabi had signed an affidavit stating he had read the petition for bill of review and the allegations contained therein were "true and correct," he admitted that many of the representations in the petition were false. Abou-Trabi also stated he had not read all of the petition.
Abou-Trabi testified he left the Thompson Crossing residence in July 1997 and never returned although his ex-wife and daughter were residing there and he had visitation rights with his daughter. He did not file a change of address with the Post Office because he did not have important mail coming to Thompson Crossing; all his business mail came to the West 34th Street address.
Abou-Trabi testified he called the court many times to find out about the lawsuit. He asked the clerk whether there was a lawsuit against Acorn Foreign Auto Parts, and the clerk said there was no lawsuit. Abou-Trabi also testified the clerk never asked him for the case number even though he told the clerk he had filed an answer to the lawsuit. According to Abou-Trabi, the clerk did not ask for his name, and he did not give it to her.
During the hearing, the trial court indicated it thought the case depended on whether or not there was fault or negligence on Abou-Trabi's part. At the conclusion of the hearing, the trial court denied the petition for bill of review. Abou-Tribi did not request, and the court did not file, findings of fact and conclusions of law.
Discussion
Abou-Trabi raises three issues on appeal: (1) whether the trial court "erred" in denying his petition for bill of review; (2) whether he received notice of the trial setting that resulted in the default judgment in the underlying breach of contract case, and (3) whether his rights to due process and due course of law were violated by the default judgment being entered without notice to him of the trial setting. Our analysis of the first issue necessarily encompasses the remaining two.
In reviewing the grant or denial of a bill of review, we indulge every presumption in favor of the trial court's ruling and will not disturb the ruling unless there is an affirmative showing of an abuse of judicial discretion. See Nguyen v. Intertex, Inc., 93 S.W.3d 288, 293 (Tex.App.-Houston [14th Dist.] 2002, no pet.) (citing Interaction, Inc./State v. State/Interaction, Inc., 17 S.W.3d 775, 778 (Tex.App.-Austin 2000, pet. denied)). We may reverse the trial court for abusing its discretion only if it has acted in an unreasonable or arbitrary manner, or without reference to any guiding rules and principles. Id. (citing Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991)). We may not reverse for abuse of discretion merely because we disagree with a decision by the trial court, if that decision was within the trial court's discretionary authority. Id. (citing Beamont Bank, 806 S.W.2d at 226).
Additionally, because Abou-Trabi did not request, and the trial court did not make, findings of fact and conclusions of law, we must affirm the judgment of the trial court on any legal theory that finds support in the evidence. Id. (citing EZ Pawn Corp. v. Gonzalez, 921 S.W.2d 320, 322 (Tex.App.-Corpus Christi 1996, writ denied)). In the absence of findings of fact and conclusions of law, we presume the trial court found the necessary facts in support of its judgment if there is any probative evidence to support such findings. Id. at 293-94 (citing Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex. 1989)).
A bill of review is an independent equitable action brought by a party to a former action who seeks to set aside a judgment that is no longer appealable or subject to motion for new trial. Baker v. Goldsmith, 582 S.W.2d 404, 406 (Tex. 1979). According finality to judgments is of fundamental importance. Montgomery v. Kennedy, 669 S.W.2d 309, 312 (Tex. 1984). Therefore, a court scrutinizes bills of review seeking relief from final judgments with "extreme jealousy, and the grounds on which interference will be allowed are narrow and restricted." Id.; Brooks v. Assocs. Fin. Corp., 892 S.W.2d 91, 92 (Tex.App.-Houston [14th Dist.] 1994, no writ).
A bill of review petitioner must ordinarily plead and prove the following: (1) a meritorious claim or defense; (2) that he was prevented from making by the fraud, accident or wrongful act of his opponent; (3) unmixed with any fault or negligence of his own. Ortega v. First RepublicBank Fort Worth, N.A., 792 S.W.2d 452, 453 (Tex. 1990). Courts have relaxed these requirements when the party petitioning for the bill of review seeks to set aside a default judgment on the basis he was not served with process. Winrock Houston Assocs. Ltd. P'ship v. Bergstrom, 879 S.W.2d 144, 149 (Tex.App.-Houston [14th Dist.] 1994, no writ). In such cases, the petitioner need not prove fraud, accident or a wrongful act of the opposite party. Id. (citing Texas Indus., Inc. v. Sanchez, 525 S.W.2d 870, 871 (Tex. 1975)). He also does not have to prove a meritorious defense. Id. (citing Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80, 86-87, 108 S.Ct. 896, 899-900 (1988); Lopez v. Lopez, 757 S.W.2d 721, 723 (Tex. 1988)).
The petitioner must, however, demonstrate he was free from fault or negligence in letting the judgment be taken, a requirement which encompasses an absence of negligence in allowing the trial court to render the default judgment against him. See id. A party's failure to make reasonable inquiries regarding his pending litigation is failure to exercise diligence, and without the showing of such diligence, a bill of review will fail since the appellant will not be able to prove his non-negligence in allowing the judgment against him to be rendered and to become final. See Melton v. Ryander, 727 S.W.2d 299, 302 (Tex.App.-Dallas 1987, writ ref'd n.r.e.).
Even if we assume Abou-Trabi did not receive notice of the trial setting that resulted in the default judgment against him, this case is distinguishable from Peralta v. Heights Medical Center, in which the defendant was neither served with the petition nor received notice of the judgment. See 485 U.S. at 81, 83, 108 S.Ct. at 897-98. Abou-Trabi, in contrast, was personally served with a copy of the petition, styled, "Best Industrial Uniform Supply Co., Inc. vs. Fouad Abou-Trabi."
In Peralta, the defendant had no notice of the lawsuit against him, and the Supreme Court rejected the reasoning of the Texas courts that Peralta was required to show he had a meritorious defense — apparently on the ground that, without a defense, the same judgment would again be entered on retrial, and therefore appellant had suffered no harm from the judgment entered without notice. See Peralta v. Heights Med. Ctr., Inc., 485 U.S. 82, 85, 108 S.Ct. 896, 899 (1988). The United States Supreme Court found this reasoning untenable because, had Peralta had notice of the suit, he might have impleaded the employee whose debt Peralta had allegedly guaranteed, worked out a settlement, or paid the debt. Id. As set forth above, however, we do not require Abou-Trabi to prove fraud, accident or a wrongful act of the opposite party or a meritorious defense.
Abou-Trabi's failure to establish lack of fault or negligence on his own part is dispositive. By virtue of personal service on him, Abou-Trabi had notice of the pending case. Although he alleges he contacted the district court clerk on several occasions, he apparently never asked about the case using the style of the case or the cause number. Although Abou-Trabi provided his business address on his pro se answer, he did not send Best or its counsel a copy of that answer. He did not provide the Post Office with a forwarding order. He apparently did not provide his own attorney with his business address.
Abou-Trabi has not established that his rights to due process and due course of law were violated by entry of the default judgment in combination with denial of the bill of review. He has not established lack of fault or negligence on his own part. The trial court did not abuse its discretion in denying the bill of review.
The trial court also could have denied the petition on the basis that Abou-Trabi did not come into court with clean hands. See Kelton v. Kelton, 448 S.W.2d 569, 570 (Tex.Civ.App. — Houston [14th Dist.] 1969, no writ) (stating a bill of review is an equitable remedy and the petitioner must come into court with clean hands). In his deposition, Abou-Trabi admitted the petition contained untrue statements, which he had sworn, in an affidavit, were true.
We overrule Abou-Trabi's issues on appeal. We affirm the judgment of the trial court.