In re RPH Capital Partners
| Decision Date | 14 June 2017 |
| Docket Number | No. 04-16-00424-CV,04-16-00424-CV |
| Parties | IN RE RPH CAPITAL PARTNERS, LP |
| Court | Texas Court of Appeals |
Original Mandamus Proceeding1
Sitting: Karen Angelini, Justice Patricia O. Alvarez, Justice Luz Elena D. Chapa, Justice
The motion for rehearing filed on January 12, 2017, by real parties in interest Peridot Joint Venture, Millennium Exploration Company, LLC, and Richard Monroy is granted. This court's opinion and order in this original proceeding dated December 6, 2016, are hereby withdrawn and this opinion is substituted. Upon further consideration and for the reasons set forth in this opinion, we deny the petition for writ of mandamus.
Relator, RPH Capital Partners, LP ("RPH"), filed suit against Peridot Joint Venture, Millennium Exploration Company, LLC, and Richard Monroy (collectively "Peridot"), alleging various claims for relief based on a dispute arising from a participation agreement involving anumber of oil and gas properties. When Peridot did not appear for the trial on the merits, RPH obtained a default judgment. Peridot challenged the default judgment by filing a petition for bill of review in the trial court. After the trial court granted Peridot's bill of review on June 9, 2016, RPH filed this original proceeding.
RPH, an investment group that invests in oil and gas properties, entered into a participation agreement with Peridot. In exchange for payments made to RPH, Peridot was allowed to participate in drilling and operating various oil and gas wells and share in any resulting profits. In August 2015, Peridot demanded that RPH forfeit all future interest in a well subject to the participation agreement. In response to Peridot's demand, RPH filed suit against Peridot. In its petition, RPH alleged Peridot did not make payments under the participation agreement and engaged in fraud by selling interests in properties Peridot did not own to outside investors. RPH sought a declaratory judgment and damages for breach of contract, detrimental reliance, and promissory estoppel. RPH also sought an injunction. After a hearing was held on RPH's request for a temporary injunction on November 5, 2015, the trial court announced it was granting the temporary injunction and instructed the parties to submit an agreed proposed order. RPH sent a draft of the proposed order, via email, to Wade McClure, lead counsel for Peridot. The proposed order left a blank for the time and date of trial on the merits. McClure approved the order as to form, and RPH filed it with the trial court.
The trial court signed the order on November 5, 2015. A trial date of December 14, 2015, was hand-written into the signed order. The signed order was emailed to McClure after 5:00 p.m. on November 5, 2015, thus giving Peridot 38 days' notice of the trial date.
The case was called for trial on December 14, 2015. Peridot did not appear for trial. Counsel for RPH told the trial court that Peridot received notice of the trial date, but for the past"30 days or so" Peridot had not responded to text messages, emails or phone calls. RPH put on evidence of damages and the trial judge signed a post-answer default judgment awarding RPH $4,504,500.00 in damages, attorney's fees of $50,000.00, and punitive damages of $3,000,000.00, each, against Peridot Joint Venture, Millennium Exploration Company, LLC, and Richard Monroy, for a total of $13,554,500.00.
Peridot did not file a motion for new trial, nor did it file a notice of appeal. On March 24, 2016, after RPH began to garnish Peridot's bank accounts, Peridot filed an original petition for bill of review. In the petition, Peridot contended it never received a copy of the December 14, 2015 judgment, a contention which is undisputed. Because the temporary injunction order gave only 38 days' notice of the trial date, Peridot further argued it was deprived of its due process right to notice of a trial and was entitled to a reversal of the judgment. On May 17, 2016, Peridot filed a motion for summary judgment on its bill of review. After a hearing, the trial court granted summary judgment in Peridot's favor. The summary judgment order vacated the December 14, 2015 default judgment based on the trial court's finding "that as a matter of law, the Peridott [sic] Plaintiffs were denied due process." RPH then filed this petition for writ of mandamus, asking this court to order the trial court to vacate the summary judgment order and reinstate the December 14, 2015 judgment.
Mandamus relief is available when a trial court erroneously grants a bill of review. In re Spiller, 303 S.W.3d 426, 431 (Tex. App.—Waco 2010, orig. proceeding); In re Nat'l Unity Ins. Co., 963 S.W.2d 876, 877 (Tex. App.—San Antonio 1998, orig. proceeding). However, in order to be entitled to mandamus relief, the relator must show the trial court's ruling was a clear abuse of discretion. In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-36 (Tex. 2004) (orig. proceeding); Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding).
Generally, a bill-of-review plaintiff must "plead and prove (1) a meritorious defense or claim to the underlying cause of action, (2) which the plaintiff was prevented from making by the fraud, accident, or wrongful act of the opposing party or official mistake, (3) unmixed with any negligence or fault on the part of the plaintiff." Eastin v. Dial, 288 S.W.3d 491, 497 (Tex. App.—San Antonio 2009, pet. denied); see also City of Laredo v. Threadgill, 686 S.W.2d 734, 734-35 (Tex. App—San Antonio, 1985, no writ). However, that standard is modified when a party is prevented from filing a motion for new trial because the trial court failed to send notice of a default judgment. Threadgill, 686 S.W.2d at 735. When a defaulting party shows that it was not notified that a judgment was taken, and this lack of notice caused the party to miss the deadline for filing a motion for new trial, the bill-of-review plaintiff must satisfy the test set out in Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex. Com. App. 1939) governing the granting of motions for new trial following a default judgment. Id.
Applying the foregoing law to the instant case, because the trial court failed to provide notice of the default judgment, Peridot was required to prove (1) its failure to appear at trial was not intentional or the result of conscious indifference, but was due to mistake or accident; (2) it has a meritorious defense to the suit; and (3) granting the motion will not delay or otherwise work an injury to RPH. See Craddock, 133 S.W.2d at 126 (). However, in this case, we must also consider the fact that the order setting the trial date failed to provide the full forty-five days' notice required by the rules of civil procedure. See TEX. R. CIV. P. 245...
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