Dispensa v. University State Bank

• Decision Date: 25 February 1999
• Docket Number: No. 14-97-00380-CV,14-97-00380-CV
• Citation: 987 S.W.2d 923
• Parties: Angelo DISPENSA, Individually and as Independent Executor of The Estate of Frances D. Maceo, Deceased, Appellant, v. UNIVERSITY STATE BANK, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 923

987 S.W.2d 923

Angelo DISPENSA, Individually and as Independent Executor of

The Estate of Frances D. Maceo, Deceased, Appellant, v. UNIVERSITY STATE BANK, Appellee.

No. 14-97-00380-CV.

Court of Appeals of Texas,

Houston (14th Dist.).

Feb. 25, 1999.

Timothy R. Ploch, Houston, Keith C. Livesay, Pharr, for appellants.

Leslie L. Gallman, Sugar Land, for appellees.

Panel consists of Justices AMIDEI, FOWLER, and Senior Justice DRAUGHN. ^*

MAJORITY OPINION

WANDA McKEE FOWLER, Justice.

In an attempt to have a six year old default judgment set aside, appellant, Angelo Dispensa filed a bill of review and a suit collaterally attacking the judgment. He claimed that he was not served with the underlying law suit University State Bank filed against him. He claims that this lack of service prevented the court from obtaining personal jurisdiction over him, and made the trial court's judgment void. He also claims that the trial court erred (1) in granting a summary judgment on his collateral attack and in not allowing him to introduce evidence extrinsic to the judgment and (2) in dismissing his bill of review. We conclude that the judgment was not void, but merely voidable because Dispensa received notice of the judgment shortly after it was entered. We also conclude that (1) Dispensa, having received notice of the default judgment shortly after it was entered, lost his right to attack the judgment by a bill of review when he failed to timely use the remedies contained in the Texas Rules of Civil Procedure for setting aside default judgments and (2) Dispensa could not rely on extrinsic evidence to collaterally attack the valid service recitals in the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

Dispensa was a Texas resident when he executed a promissory note to the Bank in 1987 for $281,009.16. He moved to Connecticut in 1989 and shortly thereafter defaulted on the note. The Bank sued on the note in 1990. In its first amended original petition, the Bank alleged Dispensa was a nonresident engaging in business in Texas without a place of business or agent for service of process, and based on this, served the Secretary of State of Texas as Dispensa's agent for service of process. See TEX. CIV. PRAC. & REM.CODE ANN. § 17.045 (Vernon 1997). The Bank's petition alleged that Dispensa lived at 109 Long Hill Drive, East Hartford, Connecticut 06108.

The Secretary of State forwarded the citation and petition to this address. The certificate of the Secretary of the State, dated September 14, 1990, stated the citations and petitions were "forwarded on AUGUST 21, 1990 by CERTIFIED MAIL, return receipt requested, to" Dispensa at 109 Long Hill Drive, East Hartford, CT 06108. The certificate further stated "[t]he PROCESS was returned to this office on SEPTEMBER 13, 1990, bearing the notation UNCLAIMED."

Apparently, when the Bank sent the citation and petition to the Secretary of State the address was correct, but, by the time the Secretary of State sent the citation to Dispensa, he had moved. The Bank had his new address in its files but did not try to correct the service by serving Dispensa at the new address.

Based on Dispensa's failure to answer the suit, the Bank moved for entry of a default judgment. On December 26, 1990, the trial court entered a default judgment against Dispensa. The default judgment recited that Dispensa was duly served with citation according to law but failed to appear and wholly defaulted. Although the record is unclear as to exactly what type of notice Dispensa received, Dispensa received notice of the entry of the default judgment only days after it was entered. He contacted a lawyer to take care of the problem but never followed up on it.

Six years later, when the Bank instituted foreclosure proceedings against the property, Dispensa began his first real attempts to have the judgment set aside. On September 6, 1996, he filed his original petition alleging that the suit was brought as a collateral attack on the default judgment and claiming that the judgment was void because he was never served with process. The Bank filed a motion for summary judgment alleging that Dispensa's collateral attack must fail because the judgment was voidable, not void, and was not subject to a collateral attack. The Bank contended that the judgment's recital of valid service was conclusive and that extrinsic evidence could not be used to establish lack of jurisdiction. The trial court agreed and ordered Dispensa to file an amended petition asking for a bill of review. Dispensa complied, filing a second amended original petition collaterally attacking the default judgment as void and, in the alternative, asking for a bill of review. ¹ The trial court granted a partial summary judgment to the Bank, dismissed Dispensa's collateral attack, and ordered a hearing on the bill of review. After the hearing on the bill of review, the trial court entered an order denying the bill of review on the grounds that it was barred by the four-year statute of limitations and that Dispensa had not exhausted all of his legal remedies before filing the bill of review. See TEX. CIV. PRAC. & REM.CODE ANN. § 16.051 (Vernon 1997) (discussing the four-year residual limitations period).

In response to Dispensa's request, the trial court entered findings of fact and conclusions of law. The trial court's findings of fact stated that "[b]y the time service was made on the secretary of state, Dispensa had moved from 109 Long Hill Drive," the secretary of state forwarded process to the address given by the Bank, and the process was returned marked "unclaimed." The Court also found that Dispensa learned of the December 26, 1990, default judgment "as early as January 1991, and probably on or before December 31, 1990." In addition, the court found that Dispensa "learned of the The trial court's conclusions of law found that Dispensa was not properly served with citation in the underlying case but concluded that the four-year statute of limitations barred Dispensa's bill of review because he knew about the default judgment "almost four years before the statute of limitations ran." The trial court further concluded that Dispensa would not be entitled to a bill of review because he did not exhaust his legal remedies of a motion for new trial, appeal, or writ of error, and he knew about the judgment in time to file a motion for new trial.

                default judgment in time to file a motion for new trial, probably under Rule 329b(a), but if not in time for the 30-day limit of Rule 329b(a), then at least in time to file a motion for new trial with the additional time allowed by Rule 306a(4)."   Finally, the court found that Dispensa "learned of the default judgment, probably in time to file an appeal but at least within the six months allowed to file a writ of error." 2
                

As we have said earlier, Dispensa has two main complaints on appeal. First, he complains that the court erred when it granted summary judgment and dismissed his collateral attack. Second, he complains that the trial court wrongly concluded that his bill of review claim was barred by the statute of limitations and barred because he did not exhaust other remedies such as a motion for new trial, appeal, or writ of error to set aside the judgment. We will address the bill of review first.

The Bill of Review

The ultimate question is whether Dispensa had to meet the bill of review requirement that he exercise due diligence in setting aside the judgment. See Rizk v. Mayad, 603 S.W.2d 773, 776 (Tex.1980). He claims that upon a showing of "improper service," a party filing a bill of review is absolutely entitled to have a judgment set aside. See Peralta v. Heights Medical Center, Inc., 485 U.S. 80, 84, 108 S.Ct. 896, 899, 99 L.Ed.2d 75 (1988). He also claims that defective service makes a judgment void. See id. For several reason, we disagree with both of these contentions.

A. Due Process

The validity of a personal judgment against an out of state person depends on the state meeting the due process requirements of the Fourteenth Amendment. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980). Due process has two aspects to it: 1) the defendant must be given adequate notice of the suit and 2) the defendant and the state must have a certain amount of minimum contacts to subject the defendant to the personal jurisdiction of the court. See id. Here, Dispensa does not contend, and could not contend, that sufficient minimum contacts did not exist between him and Texas. The only question is whether adequate notice was given.

1. Adequate Notice

Almost fifty years ago the Supreme Court explained what kind of notice will satisfy due process concerns and constitute adequate notice. See Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314-15, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950).

"An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. The notice must be of such nature as reasonably to convey the required information and it must afford a reasonable time for those interested to make their appearance.

But if with due regard for the practicalities and peculiarities of the case these conditions are reasonably met the constitutional requirements are satisfied.

... [W]hen notice is a person's due, process which is a mere gesture is not due process. The means employed must be such as one desirous of actually informing Id. (citations omitted).

the absentee might reasonably adopt to accomplish it. The reasonableness and hence the constitutional validity of any chosen method may be defended on the ground that it is in itself reasonably certain to inform those affected...."

The issue of procedural due process was...