Ross v. Access Healthsource, Inc., No. 08-03-00096-CV (Tex. App. 12/4/2003)
| Decision Date | 04 December 2003 |
| Docket Number | No. 08-03-00096-CV.,08-03-00096-CV. |
| Parties | RICHARD ROSS, Appellant, v. ACCESS HEALTHSOURCE, INC., As Assignee of O. R. BROOKER, W. A. PITCHFORD, NATALIE T. BORNSTEIN, MARIA G. CARDENAS, VERNOY WALKER, RANDOLPH WALDMAN, WALKER JACKSON, and MARY WARD, and KATHRYN HORN and JOEL HENDRYX, Appellees. |
| Court | Texas Court of Appeals |
Appeal from the County Court at Law #7 of El Paso County, Texas (TC# 2003-080).
Before Panel No. 2 BARAJAS, C.J., McCLURE, and CHEW, JJ.
Appellant Richard M. Ross appeals a turnover order to enforce a default judgment against him in cause number 99-1459 and the trial court's granting of summary judgment denying the bill of review in favor of Appellees, Access Healthsource, Inc., as assignee of O.R. Brooker, W.A. Pitchford, Natalie T. Bornstein, Maria G. Cardenas, Vernoy Walker, Randolph Waldman, Walker Jackson, and Mary Ward; and Kathryn Horn and Joe Hendryx (collectively "Appellees") and denial of his summary judgment motion in cause number 2003-080. The two related appeals have been consolidated for briefing and oral argument purposes only, therefore separate opinions will be issued for each cause. Mr. Ross raises eight issues for review, five challenge the trial court's turnover order and the remaining three contend the trial court erred in granting summary judgment in favor of Appellees and in denying Mr. Ross' summary judgment motion. In this opinion, we consider the three issues challenging the trial court's judgment on the motions of summary judgment.1 We reverse the trial court's judgment in cause number 2003-080 and remand that cause to the trial court for further proceedings.
On April 26, 1999, Plaintiffs O. R. Brooker, W. A. Pitchford, Natalie T. Bornstein, Maria G. Cardenas, Vernoy Walker, Joel Hendryx, Randolph Waldman, Walker Jackson, Kathryn Horn, and Mary Ward brought suit against Defendants Mr. Ross, Dr. Richard Standridge, and James Farrelly in County Court of Law Number Seven, El Paso County, Texas. In their original petition, Plaintiffs, all shareholders in a physician practice management organization, alleged that the defendants fraudulently induced them to execute a stock merger agreement in which they transferred all their existing capital stock into stock of Access Healthsource, Inc. Specifically, Plaintiffs alleged that the Defendants falsely represented how and why the stock merger into Access Healthsource would be beneficial to them and as a result of the Defendants' misrepresentations the value of their stock went from five million dollars to zero dollars. Defendants Dr. Standridge and Mr. Farrelly were served by process and filed an answer in the lawsuit.
On October 19, 1999, the trial court granted Appellees' motion for substitute service of process on Appellant Mr. Ross at an address in Scottsdale, Arizona. The Arizona process server's affidavit on November 1, 1999, states that he attempted to personally serve Mr. Ross at the given address, but had to post and mail the documents served. The description of documents served does not list the citation and the record does not contain a return receipt for certified mail, though the affidavit states the documents were mailed by certified mail. On January 21, 2000, Appellees obtained a default judgment against Mr. Ross in which they were awarded five million dollars in actual damages and five million dollars in exemplary damages plus interest and attorney's fees. The default judgment recites that Mr. Ross was duly served with process in cause number 99-1459. On February 29, 2000, the trial court severed Appellees' cause of action against Defendants Dr. Standridge and Mr. Farrelly from its default judgment against Mr. Ross.2
In March 2000, Appellees sought enforcement of the Texas default judgment in an Arizona state court. On April 17, 2000, Mr. Ross filed a motion under ARIZ.R.CIV.P. 60(c) to vacate the foreign judgment Appellees had filed in Arizona based on insufficient service of process. In their response to Mr. Ross' motion, Appellees asserted he was properly served in the Texas lawsuit. On August 8, 2000, the Arizona state court found insufficient service of process on Mr. Ross and ordered the foreign judgment filed by Appellees "void and hereby vacated."
On January 7, 2003, Mr. Ross filed a petition for bill of review, challenging the default judgment obtained against him by Appellees in January 2000. In his petition, he alleged inter alia that Appellees wrongfully obtained a default judgment against him, that he has a meritorious defense to the underlying lawsuit, that the trial court give full credit to the Arizona judgment finding improper service on him in the default judgment, and that his inability to prevent the entry of the default was not the result of any fault or negligence on his part. In their answer, Appellees asserted that a bill of review was not available to Mr. Ross because he failed to exhaust other legal remedies available to him to challenge the default judgment in Texas and was at fault or negligent in having the default judgment rendered against him. The parties then filed cross-motions for summary judgment on the bill of review. On January 31, 2003, the trial court granted summary judgment in favor of Appellees, denied Mr. Ross' motion for summary judgment, and ruled that Mr. Ross' bill of review petition to set aside the January 2000 default judgment was denied. Mr. Ross now timely appeals the trial court's judgment in cause number 2003-080.
In Issues Six through Eight, Mr. Ross contends the trial court erred in granting Appellees' motion for summary judgment denying the bill of review and the denial of his motion for summary judgment.
Summary judgment is proper when the movant establishes there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. See Tex.R.Civ.P. 166a(c); Nixon v. Mr. Property Management Co., Inc., 690 S.W.2d 546, 548-49 (Tex. 1985). The question on appeal is not whether the summary judgment proof raises fact issues as to the elements of the movant's cause or claim, but rather whether the summary judgment proof establishes, as a matter of law, that there is no genuine issue of material fact as to one or more elements of the movant's cause or claim. Wyatt v. Longoria, 33 S.W.3d 26, 31 (Tex.App.—El Paso 2000, no pet.). In determining whether the movant has carried this burden, all evidence favorable to the non-movant must be taken as true and all reasonable inferences must be indulged in favor of the non-movant, and any doubts must be resolved in the non-movant's favor. Nixon, 690 S.W.2d at 548-49; Wyatt, 33 S.W.3d at 31. When both sides file motions for summary judgment and one is granted and the other is denied, we review all questions presented. FM Properties Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000); Jones v. Strauss, 745 S.W.2d 898, 900 (Tex. 1988)(per curiam)(orig. proceeding). When a summary judgment order does not specify on what grounds it was granted, we will affirm the judgment if any of the theories advanced in the motion is meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).
A bill of review is an equitable proceeding brought by a party seeking to set aside a prior judgment that is no longer subject to challenge by a motion for new trial or appeal. Caldwell v. Barnes, 975 S.W.2d 535, 537 (Tex. 1998); see TEX.R.CIV.P. 329b(f). Although it is an equitable proceeding, the fact that an injustice has occurred is not sufficient to justify relief by review. Wembley Inv. Co. v. Herrera, 11 S.W.3d 924, 927 (Tex. 1999); see also Williamson v. Williamson, 986 S.W.2d 379, 380-81 (Tex.App.—El Paso 1999, no pet.). Ordinarily, a petitioner for bill of review must prove: (1) a meritorious claim or defense to the cause of action alleged to support the judgment; (2) which fraud, accident, or the opposing party's wrongful act prevented him from making; and (3) without any fault or negligence of his own. Wembley Inv. Co., 11 S.W.3d at 927; Baker v. Goldsmith, 582 S.W.2d 404, 408 (Tex. 1979). Further, bill of review relief is available only if a party has exercised due diligence in pursuing all adequate legal remedies against a former judgment. Wembley Inv. Co., 11 S.W.3d at 927. If legal remedies were available but ignored, relief by equitable bill of review is unavailable. Id.; Williamson, 986 S.W.2d at 381.
Where the petitioner was not served with process, he need not prove he had a meritorious defense, is not required to show he was prevented from presenting such a defense by fraud, accident, or wrongful act of his opponent, and his own want of fault or negligence is established. See Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80, 86, 108 S.Ct. 896, 900, 99 L.Ed.2d 75 (1988) (); Texas Indus., Inc. v. Sanchez, 525 S.W.2d 870, 871 (Tex. 1975)(proof of not having been served with citation obviates proving that petitioner was prevented from making defense by fraud, accident, or wrongful act of the opposite party); Caldwell, 975 S.W.2d at 537 ().
In his motion for summary judgment, Mr. Ross argued he was entitled to summary judgment granting the bill of review because the underlying default judgment is void due to the lack of service of process on him. A default judgment will not withstand direct attack if strict compliance with the rules relating to the issuance of citation, the manner and mode of service, and the return of process does not affirmatively appear in the record. See Primate Const., Inc. v. Silver, 884 S.W.2d 151, 152 (Tex. 1994); Uvalde Country Club v. Martin Linen Supply Co., Inc., 690 S.W.2d 884, 885 (Tex. 1985); World Distributors, Inc. v. Knox, 968...
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