Holloway v. Starnes

• Decision Date: 30 June 1992
• Docket Number: No. 05-91-00571-CV,05-91-00571-CV
• Citation: 840 S.W.2d 14
• Parties: Pat S. HOLLOWAY, et al., Appellants, v. Michael G. STARNES, et al., Appellees.
• Court: Texas Court of Appeals

Page 14

840 S.W.2d 14

Pat S. HOLLOWAY, et al., Appellants, v. Michael G. STARNES, et al., Appellees.

No. 05-91-00571-CV.

Court of Appeals of Texas,

Dallas.

June 30, 1992.

Rehearing Denied Aug. 27, 1992.

Roy Q. Minton, Austin, Arch McColl, Tom James, Dallas, Michael J. Simmang, Giddings, Michael S. McColloch, Dallas, for appellants.

Jack Ayres Jr., Thomas V. Murto III, Dallas, Frank Douglass, Thomas Reavley, Austin, John B. Kyle, Dallas, for appellees.

Before STEWART, BAKER and MALONEY, JJ.

OPINION

STEWART, Justice.

Pat S. Holloway, Robbie Holloway, and Flojo Trading Corporation (collectively appellants) appeal from a summary judgment granted in favor of Michael G. Starnes and the Browning family (collectively appellees) on appellants' bill of review. Each appellant has filed a separate brief, complaining that the trial court erred in granting appellees' amended motion for summary judgment and in denying their first, third, and sixth motions for partial summary judgment. Additionally, Pat Holloway (Holloway) argues that the trial court erred in denying his request to supplement the summary-judgment record and in permanently enjoining further attack on the judgment in favor of the Brownings. We affirm the trial court's judgment.

FACTUAL BACKGROUND

The litigation between the parties began on September 12, 1979, when the Brownings sued Holloway, Robbie, Humble Exploration Company, and others in Texas state court seeking a constructive trust on Humble's and Holloway's assets, appointment of an interim receiver to manage the disputed assets, and damages (the 1979 case). The 1979 case was filed in the 193rd District Court in Dallas County, Texas. Holloway, Robbie, and Humble filed Chapter 11 voluntary bankruptcy petitions on November 19, 1979 and removed the 1979 case to the United States Bankruptcy Court for the Northern District of Texas (the bankruptcy court). The bankruptcy court remanded the cause to the 193rd District Court and modified the automatic stay to permit trial of the case.

In 1982, a group of investors sued Holloway and the Brownings in the 162nd District Court of Dallas County, Texas, alleging that Humble had wrongfully shut in oil and gas wells jointly owned by Humble and the investors and seeking appointment of a receiver over Humble's assets (the 1982 case). ¹ The Brownings cross-claimed against Holloway, alleging the same issues pending in the 1979 case. After a series of orders, the 1979 and 1982 cases were consolidated for trial in the 162nd District Court by Judge Dee Brown Walker, the elected judge of that court. Judge Walker later severed the 1979 and 1982 cases and granted the Brownings an expedited trial of the 1979 case. On October 12, 1982, Holloway converted his Chapter 11 bankruptcy proceeding to a Chapter 7 liquidation proceeding. The bankruptcy court appointed a trustee. On November 11, 1982, the trial court entered an amended judgment for the Brownings imposing a constructive trust on Humble's and Holloway's assets and awarding $72 million in damages (the Walker judgment). ²

On November 18, 1982, Holloway sued Judge Walker, the Brownings, and the Brownings' attorneys in federal court under title 42, section 1983 of the United States Code (the civil rights suit). Holloway alleged that the Brownings, their attorneys, and Judge Walker had conspired to deny him a fair trial in the state-court trial of the 1979 case. The district court dismissed with prejudice Holloway's section 1983 claim and dismissed without prejudice his pendent state-law claims for negligent and wrongful receivership. The judgment was affirmed on appeal. Holloway v. Walker, 784 F.2d 1287 (5th Cir.), cert. denied, 479 U.S. 984, 107 S.Ct. 571, 93 L.Ed.2d 576 (1986).

After filing the civil rights suit, Holloway appealed the Walker judgment to this Court, but posted no supersedeas bond to stay its execution. In March 1983, the Brownings sued in the federal bankruptcy court to enforce the Walker judgment (the enforcement action). The bankruptcy court upheld the bankruptcy trustee's defense that the trial of the 1979 case violated the bankruptcy court's conditional remand order requiring trial before a visiting or retired judge and that, therefore, the Walker judgment was void. See Browning v. Navarro, 37 B.R. 201, 210 (N.D.Tex.1983). Then, on July 11, 1984, this Court granted the Brownings' motion to dismiss Holloway's appeal on the ground that his defense to the enforcement action was a review of the Walker judgment that was inconsistent with his direct appeal and that Holloway was not entitled to two types of review of the Walker judgment. Humble Explor. Co. v. Browning, 677 S.W.2d 111, 114-15 (Tex.App.--Dallas 1984), on mot. to reinstate, 690 S.W.2d 321 (Tex.App.--DAllas 1985, writ ref'd n.r.e.) (en banc), cert. denied, 475 U.S. 1065, 106 S.Ct. 1376, 89 L.Ed.2d 602 (1986). Subsequently, the Fifth Circuit reversed the district court's decision in the enforcement action that the judgment was void and held that the 162nd District Court had jurisdiction to enter the Walker judgment. Browning v. Navarro, 743 F.2d 1069 (5th Cir.1984) (Browning I). Thereafter, this Court vacated its prior order of dismissal; however, we later reinstated the order of dismissal. Humble Explor. Co. v. Browning, 690 S.W.2d 321 (Tex.App.--Dallas 1985, writ ref'd n.r.e.) (en banc), cert. denied, 475 U.S. 1065, 106 S.Ct. 1376, 89 L.Ed.2d 602 (1986). On remand of the enforcement action, the bankruptcy court denied Holloway's motion for summary judgment based on alleged fraud in the state-court proceedings. Holloway appealed, and the Fifth Circuit narrowed the issues in the case as follows: (1) Holloway could argue that the Walker judgment was void because it was obtained by fraud; and (2) the Brownings could argue that res judicata barred Holloway from raising the issue of fraud. Browning v. Navarro, 826 F.2d 335, 346 (5th Cir.1987) (Browning II). On remand, the bankruptcy court denied the Brownings' motion for summary judgment and held that res judicata did not bar Holloway's attack on the Walker judgment. This issue was certified for interlocutory appeal. On appeal, the Fifth Circuit reversed and held that res judicata precluded Holloway's claims that the Walker judgment was procured by fraud. Browning v. Navarro, 887 F.2d 553, 559-60 (5th Cir.1989) (Browning III).

On June 16, 1986, appellants filed this combined collateral attack and bill of review in the 162nd District Court attacking the Walker judgment. The bill of review alleged that appellants had meritorious defenses to all of the claims asserted by the Brownings in the trial of the 1979 case. They further alleged that, through no fault, negligence, or lack of diligence on their part, they were prevented from fully presenting their defenses because of (1) Judge Walker's bias, fraud, and conspiracy with the Brownings, their attorneys, and others and (2) Judge Walker's various unconstitutional and illegal rulings. Holloway also asserted that he had no control over and no way to prevent Judge Walker's bias and fraudulent conspiracy with the Brownings and their attorneys. Appellees subsequently moved for summary judgment. Appellants filed several motions for partial summary judgment. The trial court granted appellees' amended motion for summary judgment and enjoined Holloway and Robbie from further state-court litigation seeking to overturn the Walker judgment. Appellants then perfected this appeal.

APPELLEES' MOTION FOR SUMMARY JUDGMENT

Appellees' amended motion for summary judgment alleged, inter alia, that: (1) appellants' collateral attack and bill of review were barred by res judicata and collateral estoppel; (2) the collateral attack was without merit because the Walker judgment contains a jurisdictional recital that imports absolute verity and is conclusive; (3) Flojo is prohibited by section 171.252 of the Texas Tax Code from either suing or defending a suit in the Texas courts; and (4) this Court dismissed appellants' appeal because they elected their remedy by claiming in defense to the enforcement action that the Walker judgment was void.

A bill of review, when properly brought, is a direct attack on a judgment. Fender v. Moss, 696 S.W.2d 410, 412 (Tex.App --Dallas 1985, writ ref'd n.r.e.). It is the proper method to attack a judgment when the trial court had jurisdiction to render judgment on the merits. Gonzalez v. Mann, 584 S.W.2d 928, 930 (Tex.Civ.App.--Houston [14th Dist.] 1979, writ ref'd n.r.e.). The purpose of a direct attack is to change the former judgment and to secure the entry of a correct judgment. Austin Indep. School Dist. v. Sierra Club, 495 S.W.2d 878, 881 (Tex.1973). This relief may be obtained on the basis of any error that probably caused the rendition of an improper judgment. Id. In a direct attack, such as a bill of review, no presumptions are indulged in support of the judgment's validity. Fender, 696 S.W.2d at 412.

A collateral attack is proper only if the judgment is "void in law." Gonzalez, 584 S.W.2d at 930. The judgment of a court of general jurisdiction is not subject to collateral attack except on the ground that it had no jurisdiction of the person of a party or his property, no jurisdiction of the subject matter, no jurisdiction to enter the particular judgment, or no capacity to act as a court. Cook v. Cameron, 733 S.W.2d 137, 140 (Tex.1987) (citing Browning v. Placke, 698 S.W.2d 362, 363 (Tex.1985)); Austin Indep. School Dist., 495 S.W.2d at 881. Errors other than lack of jurisdiction render the judgment merely voidable. Cook, 733 S.W.2d at 140. In a collateral attack, extrinsic evidence may not be used to establish a lack of jurisdiction. Huffstutlar v. Koons, 789 S.W.2d 707, 710 (Tex.App.--Dallas 1990, orig. proceeding) (en banc). Jurisdictional recitals in the judgment control the rest of the record so that, even though other parts of the record show a lack of jurisdiction, if the judgment recites the contrary, the...