Court: Court of Appeals of Texas; February 15, 2001; Texas; State Appellate Court
Kathy and Jerry Jordan filed a bill of review to set aside a $1,000,000 default judgment entered against them in a personal injury case initiated by Susan and Ron Jordan. The underlying dispute arose from a boating incident during a family camping trip in April 1989, where Susan claimed to have sustained a back injury due to Jerry's negligent driving and Kathy's negligent entrustment of the boat. After a convoluted legal history involving simultaneous lawsuits in federal and state courts, and the eventual dismissal of the federal case, Susan and Ron obtained a default judgment in state court on April 24, 1991, without Kathy and Jerry receiving proper notice.
In response, Kathy and Jerry filed a bill of review in November 1991. The trial court subsequently held a bench trial, set aside the default judgment, and ordered a jury trial for the underlying claim. Susan and Ron appealed this decision, but their appeal was reversed by the Texas Supreme Court, which ruled it was interlocutory and not appealable at that stage. Ultimately, a jury trial was conducted on the merits in September 1999, resulting in a verdict of no negligence against Susan and Ron, effectively concluding the case in favor of Kathy and Jerry.
On January 4, 2000, the trial court issued a judgment stating that Susan and Ron would take nothing from Kathy and Jerry, without explicitly incorporating a prior 1993 interlocutory order that had set aside a default judgment. The judgment included a "Mother Hubbard" clause, denying any relief not specifically granted. Susan and Ron appealed, seeking reinstatement of the $1,000,000 default judgment, arguing that the take-nothing judgment did not explicitly set aside the default judgment and thus it remains valid. They claimed that the finality of the take-nothing judgment precluded Kathy and Jerry's request to set aside the default judgment. In their appeal, they also contested the admission of evidence regarding Jerry's driving record.
Kathy and Jerry countered that the 2000 judgment was interlocutory, which would negate the appellate court's jurisdiction, and asserted that both the 1993 order and the 2000 judgment should be read together as consistent. They requested that the appeal be abated and remanded for a final judgment setting aside the default judgment if the court did not find the previous orders constituted a final judgment.
The court concluded that the 2000 judgment was final and, when considered with the 1993 order, resolved all claims and parties involved. The court upheld the trial court's ruling that Susan and Ron take nothing.
Regarding the 1993 bill of review, Kathy and Jerry needed to demonstrate three elements to set aside the $1,000,000 default judgment: a meritorious defense to the claim, inability to present that defense due to fraud, accident, or court error, and no fault on their part. The trial court established a meritorious defense, supported by a jury's finding of no negligence. However, Susan and Ron contested the trial court's conclusions on the second and third elements without challenging specific findings of fact. The court stated that unless findings are specifically contested on appeal, they are binding.
The trial court's legal conclusions are reviewed de novo, and the appellate court treats the appellant's issue broadly, encompassing all relevant subsidiary questions. The trial court made fifty-seven findings of fact, all supported by evidence, and the appellate court agrees with both the findings and legal conclusions. Key findings include that the wrong address was used for serving the motion for default judgment, and Susan and Ron failed to notify the court and the attorney representing Kathy and Jerry about the default judgment. The court found no fault on the part of Kathy and Jerry, who believed their federal attorney would handle the matter.
Appellants argue that Kathy and Jerry did not exercise due diligence by failing to file a writ of error within six months of the default judgment, which they learned about too late to file a motion for a new trial or appeal. A writ of error requires that the petition be filed within six months by a party who did not participate in the trial and where there is apparent error on the record. The "face of the record" includes only the documents on file at the time of judgment, and no new evidence is considered.
Under Texas Rule of Civil Procedure 239a, the clerk must mail written notice of the judgment to the affected party and record this action. The docket sheet lacks this notation, which appellants claim indicates the clerk did not mail the notice, constituting reversible error apparent on the record that could have been grounds for a writ of error.
An appellant must exhaust all legal remedies, including a writ of error, prior to seeking a bill of review. However, if the error occurred post-judgment, such as a clerk's failure to mail notice of a default judgment, it does not constitute reversible error via writ of error. Courts have established that non-compliance with administrative rules, like Rule 239a, does not lead to reversible errors, but can be challenged through a bill of review based on lack of notice. In this case, the court concluded that the appellees were not at fault for not pursuing a writ of error, as no legal remedy was available due to the nature of the error. Therefore, the only recourse for the appellees was an equitable bill of review, which the court upheld, affirming the trial judge's decision to set aside the default judgment.
Additionally, the appellants argued that a 2000 take-nothing judgment did not invalidate a previous $1,000,000 default judgment. They claimed the take-nothing judgment did not reference the earlier interlocutory order or default judgment, asserting that it effectively reinstated the default judgment. The court found no support for this claim in the record, citing the 1993 order that explicitly declared the default judgment void and permanently enjoined the enforcement of that judgment. The court reiterated that the "Mother Hubbard" clause does not apply if a claim logically cannot fit within it, affirming that the trial court's earlier decisions were consistent with its findings.
Jordan v. Jordan is ordered to be placed on the trial docket by the Angelina County District Clerk. The prior order is identified as an interlocutory judgment, which deferred resolution of the appellants' negligence claims to a future trial but voided the default judgment and permanently enjoined its enforcement. The trial court determined that enforcing the default judgment would be unjust to the appellees. The 2000 final judgment contained a "Mother Hubbard" clause stating that "all relief not expressly granted" was denied, yet the 1993 order had already granted the specific relief of vacating the default judgment. The two orders are interpreted together, with the 1993 interlocutory order merging into the final 2000 judgment, creating a final, appealable judgment that disposes of all claims consistently. The court overruled appellants' first two issues.
Regarding the evidentiary issue, although the trial court initially sustained an objection to Jerry's driving record, subsequent discussions led to its admission as relevant to the negligent entrustment claim. One of the appellants' attorneys suggested dropping this claim, but the suggestion was rejected, and the court allowed the evidence without any request for limiting instructions. Consequently, any objection was waived, and appellants did not challenge the jury's findings of "no negligence." The court affirmed the trial court's judgment, setting aside the default judgment and ruling that appellants take nothing from appellees. Justice Burgess dissented, referencing a previous unanimous decision that indicated the Jordans had an adequate legal remedy through a writ of error and should have acted promptly instead of filing a Bill of Review after an extended delay. The dissent calls for sustaining issue three and rendering a judgment for Susan B. and Ron Jordan.
