Schnitzius v. Koons

• Decision Date: 09 July 1991
• Docket Number: No. 05-91-00521-CV,05-91-00521-CV
• Citation: 813 S.W.2d 213
• Parties: Ellen Denham SCHNITZIUS, Appellant, v. Donald D. KOONS, Judge Presiding, 255th Judicial District Court, Dallas County, Texas, Appellee.
• Court: Texas Court of Appeals

Page 213

813 S.W.2d 213

Ellen Denham SCHNITZIUS, Appellant, v. Donald D. KOONS, Judge Presiding, 255th Judicial District Court, Dallas County, Texas, Appellee.

No. 05-91-00521-CV.

Court of Appeals of Texas Dallas.

July 9, 1991.

James B. Pinson, Dallas, for appellant.

G.P. Monks, Houston, Carolyn Findley Price, Arlington, for appellee.

Before ENOCH, C.J., and ROWE and WHITTINGTON, JJ.

OPINION

ENOCH, Chief Justice.

Relator Ellen Denham Schnitzius seeks a writ of mandamus against respondent the Honorable Donald D. Koons, Judge of the 255th Judicial District Court of Dallas County, Texas. She argues that she had obtained a final default judgment against the real party in interest Amwest Surety Insurance Company, that Amwest had filed an untimely motion to vacate the default judgment, and that Judge Koons vacated the default judgment on Amwest's motion after the court had lost plenary jurisdiction to do so. For the reasons given below, we conditionally grant the writ of mandamus.

Ellen divorced Michael McKay ¹ in early 1986. There were two minor children. Michael was ordered to pay child support twice monthly. When Michael defaulted on the support payments, Ellen moved to have him held in contempt. Michael did not appear at the contempt hearing, and the 255th Court issued an order of attachment. The order provided that Michael could obtain his release if he posted a proper appearance bond in the amount of $2,000, payable to Ellen.

Michael was attached, and he filed an appearance bond. Amwest was a surety on the bond. ² Michael was released on the strength of the bond. The court set a new hearing for Ellen's contempt motion. When Michael again did not appear, Ellen filed a motion seeking forfeiture of the bond. She requested the court to hold Amwest liable on the bond and to compel it to deposit $2,000, as proceeds from the bond, into the registry of the court. Alternatively, the motion requested a judgment against Amwest directly in favor of Ellen for the bond proceeds. Ellen did not attempt formal service of process upon Amwest, but she did mail a copy of the motion, certified mail, return receipt requested, and she obtained Amwest's receipt. Amwest never answered the motion.

On July 17, 1989, the court signed a judgment awarding Ellen $2,000 from Amwest. Ellen mailed a copy of the judgment, certified mail, return receipt requested, to Amwest. Although the record indicates that the receipt was not signed, Amwest does not allege that it did not timely receive a copy of the judgment. Amwest still took no action until Ellen attempted execution on her judgment.

On February 20, 1990, more than six months after the judgment was signed, Amwest filed a "motion to set aside void judgement [sic ] and stay execution." The motion argued only that the judgment was void because Amwest had never been served with citation, so that the court never acquired jurisdiction over its person. The court immediately stayed execution of its judgment until it could conduct a hearing on Amwest's motion. On April 13, 1990, the court conducted a hearing. ³ Although the ruling was reduced to a written order only considerably later (on March 23, 1991), the judge announced at the hearing that he would in fact vacate the July 17, 1989 judgment as void. On October 19, 1990, Ellen filed a motion for rehearing, asking the court to vacate its previous "orders" (the order staying execution and the order, not yet reduced to writing, declaring the July 17, 1989 judgment void). The motion argued that the court had lost its plenary jurisdiction to vacate its earlier judgment, except by petition for bill of review. On March 29, 1991, the judge signed an order denying Ellen's motion. Still contending that the court had lost plenary jurisdiction to vacate its judgment except by petition for bill of review, Ellen requests this Court to issue a writ of mandamus against Judge Koons, to compel him to vacate his orders vacating the July 17, 1989 judgment and staying its execution and to reinstate the July 17, 1989 judgment.

We address first whether the July 17, 1989 judgment is void because Amwest was never formally served with process. The Due Process Clause requires that a defendant be served with process in order for a default judgment against him to stand, even if the defendant cannot raise a meritorious defense. Peralta v. Heights Medical Center, Inc., 485 U.S. 80, 86-87, 108 S.Ct. 896, 900, 99 L.Ed.2d 75 (1988). The Supreme Court of the United States, however, has also held that a surety on a bond filed of record in pending litigation makes an appearance subjecting itself to the trial court's in personam jurisdiction when it signs as a surety: by becoming a surety, the party submits itself to be governed by the fixed rules which regulate the practice of the court. See Pease v. Rathbun-Jones Engineering Company, 243 U.S. 273, 277-78, 37 S.Ct. 283, 286, 61 L.Ed. 715 (1917). Sureties become "quasi parties" to the proceedings and subject themselves to the jurisdiction of the court, so that judgment may be rendered against them even in the absence of any further notice at all. See Pease, 37 S.Ct. at 286.

In Texas, sureties on replevy bonds are parties to the suit in a limited sense, so as to authorize judgment against them on their bond in the event of a judgment against their principal. Lawyers Lloyds of Texas v. Webb, 152 S.W.2d 1096, 1098 (Tex.1941). Similarly, an appellee can initiate a common-law action against the surety on a supersedeas bond, as on any other contract, but the appellee can also simply file a motion for judgment against the surety in the appellate court. See Muniz v. Vasquez, 797 S.W.2d 147, 150 (Tex.App.--Houston [14th Dist.] 1990, no writ). During oral argument, Amwest argued that the above cited authorities involved sequestration bonds, replevy bonds, cost bonds, and supersedeas bonds. Because no authority specifically addressed appearance bonds, Amwest concluded that a surety on an appearance bond had to be formally served with process before judgment could be entered against it on the bond.

We perceive no distinction that justifies the conclusion that the kind of bond determines whether a surety has appeared when the bond is filed in a court proceeding. When Amwest signed Michael's appearance bond to obtain Michael's release under the order of attachment, Amwest appeared before the court, at least for the purpose of submitting itself to that court's personal jurisdiction to enter a judgment of bond forfeiture against it. Once Amwest appeared, it had constructive notice of everything that subsequently happened in that proceeding. See K & S Interests, Inc., v. Texas American Bank/Dallas, 749 S.W.2d 887, 892 (Tex.App.--Dallas 1988, writ denied) (on mot. for reh'g). Also, we note that Amwest's complaint is not that it had no notice at all of the forfeiture proceeding; it is simply that it did not receive formal service of process. We conclude that Amwest received sufficient notice to satisfy the requirements of the Due Process Clause.

We should not be understood to say that service against a bond surety is not necessary. Under the provisions of the Texas Family Code then in effect, each party whose rights, privileges, duties, or powers might have been affected by Ellen's motion to enforce was entitled to service. See Tex.Fam.Code Ann. § 14.31(d) (Vernon 1986). ⁴ Ellen may therefore have been statutorily obligated to give Amwest notice by the service of citation commanding it to appear. But, any failure to comply with a statute requiring service of process does not result in a judgment that is void. See Elbar, Inc., v. Claussen, 774 S.W.2d 45, 52-53 (Tex.App.--Dallas 1989, no writ) (a judgment in violation of a provision in the Texas Constitution is erroneous but not to the extent that it constitutes fundamental error; the trial court's jurisdictional power included the power to rule erroneously). We hold only that the failure of a surety on an appearance bond to receive service of process neither deprives the surety of due process nor deprives the trial court of jurisdiction over the surety's person, such that a forfeiture judgment against the surety is void.

In an effort to establish the court's plenary jurisdiction to vacate the July 17, 1989 judgment as late as March, 1991, Amwest next argues that the judgment against it was interlocutory and not final, so that the court retained jurisdiction to vacate it until a final judgment was entered. Amwest asserts that a final judgment of forfeiture cannot be entered against a surety on an appearance bond until a judgment has been entered against the bond's principal, in this case, Michael. Amwest also stresses that the forfeiture judgment was a default judgment, giving no rise to presumptions of finality.

We disagree. Cf. Thomas v. DuBovy-Longo, 786 S.W.2d 506, 507 (Tex.App.--Dallas 1990, n.w.h.) (a post-answer default judgment, in which a defendant answers but fails to appear when trial is set, enjoys a presumption of finality). Although we recognize that Amwest's signing the bond constitutes only an appearance and not an answer as such, once Amwest signed the appearance bond, the only proof Ellen needed to establish a prima facie case that the bond should be forfeited was Michael's failure to appear at the hearing on her motion for contempt. Michael's failure to appear, however, was not an extrinsic fact that Ellen needed to prove to the court, which could note the failure for itself. Thus, all the proof necessary to support a judgment of forfeiture was placed before the court; although the judgment was a default judgment, it was not based upon any implied admission created by Amwest's default. See Thomas, 786 S.W.2d at 507. For this reason, the general rule that default judgments do not enjoy a presumption of finality may not apply to judgments of forfeiture against sureties on appearance bonds.

In any case a bond forfeiture proceeding is ancillary to the main...