Challenging a Default Judgment by equitable Bill of Review

   
Attacking a default judgment by Bill of Review petition when the time for a regular or restricted appeal has passed: Under what circumstances may the trial court set aside a default judgment by bill of review?  

     
NATURE OF BILL OF REVIEW AS A POST-JUDGMENT REMEDY AND CRITERIA THAT MUST BE SATISFIED TO WARRANT RELIEF   
    

A bill of review is an equitable proceeding in which a party seeks to set aside a prior judgment that is no longer subject to challenge by a motion for new trial or appeal. See Caldwell v. Barnes, 154 S.W.3d 93, 96 (Tex. 2004) (per curiam); Transworld Fin. Servs. Corp. v. Briscoe, 722 S.W.2d 407, 407-08 (Tex. 1987).

To set aside a judgment by bill of review, “petitioner must ordinarily plead and prove (1) a meritorious defense to the cause of action alleged to support the judgment, (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.” Transworld, 722 S.W.2d at 408. The residual four-year statute of limitations applies to bills of review. See Tex. Civ. Prac. & Rem. Code Ann. § 16.051 (West 2008); Caldwell v. Barnes, 975 S.W.2d 535, 538 (Tex. 1998). Although a bill of review is an equitable proceeding, a perceived injustice alone is not sufficient to justify relief by bill of review. See Wembley Inv. Co. v. Herrera, 11 S.W.3d 924, 927 (Tex. 1999) (per curiam).

“Generally, bill of review relief is available only if a party has 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.

A bill of review petitioner claiming non-service is relieved of showing a meritorious defense that was prevented by the fraud, accident, or wrongful act of his opponent, or a court official in the exercise of official duties. Caldwell, 154 S.W.3d at 96-97.

  

STANDARD OF REVIEW ON APPEAL

 

We review an order granting or denying a bill of review under an abuse of discretion standard. Ramsey v. Davis, 261 S.W.3d 811, 815 (Tex. App.-Dallas 2008, pet. denied). A trial court abuses its discretion if it reaches a decision that is so arbitrary and unreasonable as to amount to a clear and prejudicial error of law. Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding). A trial court has no discretion in determining what the law is or applying the law to the facts. Id. at 840. A trial court abuses its discretion as to factual matters when it acts unreasonably or arbitrarily. Niskar v. Niskar, 136 S.W.3d 749, 753 (Tex. App.-Dallas 2004, no pet.). The trial court does not abuse its discretion as to factual issues if there is some evidence of a substantive and probative character to support the decision. In re C.G.,
261 S.W.3d 842, 848 (Tex. App.-Dallas 2008, no pet.). Under an abuse of discretion standard, legal and factual insufficiency are not independent grounds for reversal. In re L.A.F., 270 S.W.3d 735, 738 (Tex. App.-Dallas 2008, pet. denied). Sufficiency of the evidence is, however, a relevant factor to the appellate court's review. Id. In our review, we consider whether the trial court had sufficient evidence upon which to exercise its discretion and erred in application of that discretion. In re C.G., 261 S.W.3d at 848. When, as here, there are no findings of fact or conclusions of law, and none were requested, we assume the trial court made all necessary findings to support its judgment. See In re J.H., 264 S.W.3d 919, 924 (Tex. App.-Dallas 2008, no pet.). In our review of the record, we determine whether some evidence supports the judgment and implied findings and disregard entirely contradictory evidence. See id. (citing Niskar, 136 S.W.3d at 753-54). The judgment will be upheld on any legal theory supported in the evidence. Id.
   

SOURCE: DALLAS COURT OF APPEALS - 05-10-00363-CV – 11/10/11  

Claim for LIQUIDATED and UNLIQUIDATED Damages in Default Judgment Context

   
EFFECT OF DEFAULT BY DEFENDANT WHO WAS PROPERLY SERVED
A defendant who defaults admits all allegations of facts except unliquidated damages. See Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992); Stoner v. Thompson, 578 S.W.2d 679, 684-85 (Tex. 1979).
 
WHEN CAN DEFAULT JUDGMENT BE HAD FOR LIQUIDATED DAMAGES?
When a plaintiff's claim is liquidated, and proven by an instrument in writing, the plaintiff may be awarded damages without the necessity of a hearing or the presentation of evidence. Burrows v. Bowden, 564 S.W.2d 474, 475 (Tex. Civ. App.-Corpus Christ 1978, no writ); Tex. R. Civ. P. 241.
 
WHAT MAKES A CLAIM "LIQUIDATED"?
A claim is liquidated if the amount of damages caused by the defendant can be accurately calculated from: (1) the factual, as opposed to conclusory, allegations in the petition, and (2) an instrument in writing. Freeman v. Leasing Assocs., Inc., 503 S.W.2d 406, 408 (Tex. Civ. App.-Houston [14th Dist.] 1973, no writ). A default judgment does not establish allegations pertaining to unliquidated damages. First Nat'l Bank of Irving v. Shockley, 663 S.W.2d 685, 689 (Tex. App.-Corpus Christi 1983, no writ). If damages are unliquidated or not proved by an instrument in writing, the court must hear evidence as to damages before a default judgment may be granted. Tex. R. Civ. P. 243.
 
ATTORNEYS FEES ARE UNLIQUIDATED (BUT CAN BE PROVEN UP BY AFFIDAVIT) Attorney's fees are by their very nature unliquidated. The reasonableness of attorney's fees, in the absence of a contract therefore, is a question of fact and is an unliquidated demand for which the trial court entering a default judgment should hear evidence. First Nat'l Bank of Irving, 663 S.W.2d at 691.
 
DEEMED ADMISSIONS MAY BE USED AS SUBSTITUTE FOR OTHER PROOF
A trial court may be able to ascertain the amount of damages and attorney's fees in a default judgment based on a request for admissions. Sherman Acquisition II LP v. Garcia, 229 S.W.3d 802, 813 (Tex. App.-Waco 2007, no pet.). A plaintiff may serve a request for admissions as part of its petition, and when the defendant fails to file an answer or other response, those requests are deemed admitted. Id. at 811-12 (citing Tex. R. Civ. P. 198.2(c)). Deemed admissions may be employed as proof, and once admissions are deemed admitted by operation of law and where the admissions fully support each element of a cause of action, including damages, they will fully support a judgment based thereon. This is because unanswered requests for admissions are deemed admitted without the necessity of a court order and any matter thus admitted is conclusively established as being true. Id. at 812-13 (citing Tex. Rs. Civ. P. 198.2(c), 198.3). Thus, the facts admitted may not be contradicted by evidence at the trial. Id. at 813 (citing Marshall v. Vise, 767 S.W.2d 699, 700 (Tex. 1989)).
 
SOURCE: 05-07-01730-CV (Dallas Court of Appeals)(10/26/2009) (credit card debt suit)

EQUITABLE RELIEF: What is a Bill of Review in Texas Courts?

  
A Bill of Review is not exactly a substantive cause of action, but nevertheless a means by which a court may grant EQUITABLE RELIEF (setting aside a default judgment that is no longer appealable). The Bill of Review, and its elements, thus fit within the scope of this blawg. 

THE NATURE OF A BILL OF REVIEW AND REQUIREMENTS FOR A SUCCESSFUL PETITION IN A BILL-OF-REVIEW SUIT: 
 
A bill of review is an independent equitable proceeding brought by a party to a former action who seeks to set aside a judgment that is no longer appealable or subject to a challenge by a motion for new trial. Caldwell v. Barnes, 154 S.W.3d 93, 96 (Tex. 2004) (per curiam).
 
ELEMENTS OF BILL OF REVIEW

To prevail, a bill of review plaintiff must prove: (1) a meritorious defense to the cause of action upon which the judgment is based, (2) which he or she was prevented from making by the fraud, accident, or wrongful act of the opposing party or official mistake, (3) unmixed with any fault or negligence on his or her own part. Caldwell, 154 S.W.3d at 96; Baker v. Goldsmith, 582 S.W.2d 404, 406-07 (Tex. 1979).
 
Additionally, bill of review relief is available only if a party has exercised due diligence in pursuing all adequate legal remedies. Wembley Inv. Co. v. Herrera, 11 S.W.3d 924, 927 (Tex. 1999). This due diligence requirement is distinct from the three bill of review elements and must be established before a complainant is entitled to seek bill of review relief. Narvaez, 127 S.W.3d at 321. “The inquiry traditionally used to determine whether a party has been diligent is whether the litigant and his counsel used such care as that which prudent and careful men would ordinarily use in their own cases of equal importance.” In the Interest of A.L.H.C., 49 S.W.3d 911, 916 (Tex. App.—Dallas 2001, pet. denied). 
 
SOURCE: 04-09-00198-CV (9/23/09) (San Antonio Court of Appeals) (trial court's order granting bill of review reversed because petitioner did not exercise available remedies, i.e., direct appeal).

Proof of damages for default judgment purposes: proving up liquidated vs. unliquidated damages

WHAT IS CONSIDERED ESTABLISHED WITHOUT A NEED FOR PROOF IN THE DEFAULT JUDGMENT CONTEXT?

In a no-answer default judgment, the failure to file an answer operates as an admission of the material facts alleged in the petition, except as to unliquidated damages. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992).
 
A claim for damages is liquidated if the amount of damages can accurately be calculated by the court from the factual, as opposed to the conclusory allegations in the petition and written instruments. Argyle Mech., Inc. v. Unigus Steel, Inc., 156 S.W.3d 685, 687 (Tex. App.-Dallas 2005, no pet.); see also Novosad v. Cunningham, 38 S.W.3d 767, 773 (Tex. App.-Houston [14th Dist.] 2001, no pet.) (suit to recover amount due for professional services was liquidated claim proved by written instruments where plaintiff attached original instruments to verified petition and motion for default judgment).
 
When damages are unliquidated, the judge must “hear” evidence on the damages. See Argyle Mech., Inc., 156 S.W.3d at 687; see also Tex. R. Civ. P. 243. In contrast, “if the claim is liquidated and proved by an instrument in writing, the damages shall be assessed by the court, or under its direction, and final judgment shall be rendered therefor . . . .” Tex. R. Civ. P. 241.
 
SOURCE: DALLAS COURT OF APPEALS - 05-07-01449-CV (credit card debt suit)