Sweetwater Austin Props. v. Sos Alliance

• Decision Date: 30 October 2009
• Docket Number: No. 03-08-00619-CV.,03-08-00619-CV.
• Citation: 299 S.W.3d 879
• Parties: SWEETWATER AUSTIN PROPERTIES, L.L.C.; Lazy Nine Municipal Utility District 1A; Lazy Nine Municipal Utility District 1B; Lazy Nine Municipal Utility District 1C; Lazy Nine Municipal Utility District 1D; and Lazy Nine Municipal Utility District 1E, Appellants, SOS Alliance, Inc., Cross-Appellant, v. SOS ALLIANCE, INC., Appellee, Sweetwater Austin Properties, L.L.C.; Lazy Nine Municipal Utility District 1A; Lazy Nine Municipal Utility District 1B; Lazy Nine Municipal Utility District 1C; Lazy Nine Municipal Utility District 1D; and Lazy Nine Municipal Utility District 1E, Cross-Appellees.
• Court: Texas Court of Appeals

299 S.W.3d 879

SWEETWATER AUSTIN PROPERTIES, L.L.C.; Lazy Nine Municipal Utility District 1A; Lazy Nine Municipal Utility District 1B; Lazy Nine Municipal Utility District 1C; Lazy Nine Municipal Utility District 1D; and Lazy Nine Municipal Utility District 1E, Appellants SOS Alliance, Inc., Cross-Appellant, v. SOS ALLIANCE, INC., Appellee Sweetwater Austin Properties, L.L.C.; Lazy Nine Municipal Utility District 1A; Lazy Nine Municipal Utility District 1B; Lazy Nine Municipal Utility District 1C; Lazy Nine Municipal Utility District 1D; and Lazy Nine Municipal Utility District 1E, Cross-Appellees.

No. 03-08-00619-CV.

Court of Appeals of Texas, Austin.

October 30, 2009.

John J. McKetta, III, Robin A. Melvin, G. Douglas Kilday, Graves, Dougherty, Hearon & Moody, P.C., Patton G. Lochridge, Lin Hughes, McGinnis, Lochridge & Kilgore, L.L.P., Austin, TX, for Appellants.

Philip Durst, Elaine F. Edwards, Deats, Durst, Owen & Levy, P.L.L.C., for Appellee.

Before Chief Justice JONES, Justices PEMBERTON and WALDROP.

OPINION

G. ALAN WALDROP, Justice.

Appellee SOS Alliance, Inc. challenges a final judgment entered against it in a prior lawsuit. According to SOS Alliance, the judgment in the prior lawsuit is void because the prior lawsuit was heard by a visiting trial judge who was subject to objection under government code section 74.053(d), and who continued to sit on the case after objection by SOS Alliance. The district court in this lawsuit entered judgment in favor of SOS Alliance, declaring the prior judgment void and unenforceable. We conclude that SOS Alliance's claims in this lawsuit constitute a direct attack on the prior judgment, that the claims fail due to SOS Alliance's lack of due diligence in pursuing its legal remedies with respect to the judgment in the prior lawsuit, and that SOS Alliance waived its section 74.053(d) objection in the prior lawsuit and, therefore, is foreclosed from bringing claims in this suit asserting that the trial court was without jurisdictional power in the prior lawsuit. We reverse the judgment of the district court and render judgment denying the relief sought by SOS Alliance.

Factual and Procedural Background

On June 29, 2004, SOS Alliance filed suit against Lazy Nine Municipal Utility District in Travis County district court. In its suit, SOS Alliance challenged the constitutionality of the state legislation that created the District. Judge William E. Bender, a visiting judge, presided over the bench trial. On December 8, 2004, the district court entered judgment in favor of the District, finding that the legislation was constitutional, and awarding $294,000 in attorneys' fees to the District. On appeal, the Texarkana Court of Appeals¹ affirmed the judgment as modified, holding that the district court did not err in excluding evidence relevant to the legislation's constitutionality or in awarding attorneys' fees. See generally Save Our Springs Alliance, Inc. v. Lazy Nine Mun. Util. Dist., 198 S.W.3d 300 (Tex.App.-Texarkana 2006, pet. denied). SOS Alliance filed a petition for review with the Texas Supreme Court, and the petition was denied. The Texarkana Court of Appeals issued its mandate in the 2004 lawsuit on March 30, 2007.

On April 18, 2008, SOS Alliance filed this suit against appellants in Travis County district court attacking the 2004 judgment.² SOS Alliance had filed for bankruptcy in 2007, and had obtained leave from the bankruptcy court to file this lawsuit. According to SOS Alliance's pleadings in this lawsuit, based on section 74.053(d) of the Texas Government Code, Judge Bender should not have heard the 2004 lawsuit. Section 74.053(d) states: "An assigned judge or justice who was defeated in the last primary or general election for which the judge or justice was a candidate for the judicial office held by the judge or justice may not sit in a case if either party objects to the judge or justice." Tex. Gov't Code Ann. § 74.053(d) (West 2005). Judge Bender was an assigned judge who had held judicial office but who, in 1998, had been defeated as a candidate in the primary election for that office. Therefore, he was subject to objection under government code section 74.053(d). See id. Unlike other objections under section 74.053, a party is not limited to only one objection under section 74.053(d). See id. § 74.053(b).

The parties have stipulated to the following facts. Trial in the 2004 lawsuit was set to begin on Monday, November 15, 2004. SOS Alliance was notified that Judge Peter M. Lowry, a visiting judge, would be assigned to hear cases during the week beginning November 15. SOS Alliance objected to the assignment of Judge Lowry. On the morning of November 15, SOS Alliance was notified that Judge Bender, also a visiting judge, was also being assigned to hear cases that week, and that Judge Bender would be hearing SOS Alliance's case.

At that time, SOS Alliance was not aware that Judge Bender had been defeated in his last primary election. SOS Alliance orally objected to Judge Bender at docket call on the morning of November 15, but neither cited government code section 74.053(d) nor introduced any evidence or presented any argument that Judge Bender should not sit because he had been defeated in his primary election. The 2004 lawsuit was assigned to Judge Bender at docket call on the basis that SOS Alliance had already used its one section 74.053(b) objection in objecting to Judge Lowry. SOS Alliance filed both a handwritten objection and a typewritten objection to Judge Bender prior to trial. The handwritten objection states that it was "based on constitutional right to elected judge." The typewritten version cites article V, sections 7 and 11 of the Texas Constitution and alleges that SOS Alliance has a "right to trial before an elected District Court Judge." See Tex. Const. art. V, § 7 ("district judge shall be elected by the qualified voters at a General Election"), § 11 ("District Judges may exchange districts, or hold courts for each other when they may deem it expedient, and shall do so when required by law").

During pretrial proceedings, SOS Alliance presented its objections to the court, arguing that the cited constitutional provisions "override the government code provision providing that a party gets one strike against an appointed visiting judge." The District, in turn, argued that SOS Alliance had no such constitutional right. The following discussion then took place between the District's counsel and the district court:

MR. MCKETTA:.... And Your Honor (inaudible) after years of elected service that Your Honor was voted out of office. I apologize for even asking the question, but I want to have no error in this record.

THE COURT: My title is Senior District Judge, 274th District Court.

MR. MCKETTA: And, Your Honor, that means that Your Honor is exactly an appropriate judge whom the legislature has authorized to sit, consistent with the last sentence of Section 7. Section 11 has nothing to do with this. This has to do with recusal and disqualifications.

Now, Your Honor, the legislature, as the Court knows, chose to give people a chance once to strike a visiting judge rather than infinite strikes to congest the calendars of judges who need assistance in trying cases. That one strike was done. There is no further right under the statute, and therefore, we ask that the objections be overruled, Your Honor.

THE COURT: All right. Plaintiff's objections are overruled.

After judgment was entered in favor of the District in 2004, SOS Alliance filed a motion for new trial. The motion for new trial included a point of error asserting that SOS Alliance was "entitled to have its case heard by a sitting elected Travis County District Court judge," based on "both local rules and the Texas Constitution." The motion for new trial was overruled. On appeal, SOS Alliance did not present any point of error or arguments concerning an objection to Judge Bender on any basis, either in its appellate briefing and motion for rehearing before the Texarkana Court of Appeals or in its petition for review and motion for rehearing before the Texas Supreme Court.

SOS Alliance made no inquiry to determine whether Judge Bender had been defeated in his last primary election until some time in late April or early May of 2007, which was after the mandate had issued on the 2004 lawsuit and SOS Alliance had filed for bankruptcy. SOS Alliance concedes that the facts showing that Judge Bender was defeated in his last primary election were available from public records that were accessible from November 2004 to the present.

On October 7, 2008, the district court in this lawsuit entered judgment in favor of SOS Alliance, declaring that the 2004 judgment is "void and of no force and effect." Appellants contest this declaration and appeal.³

Direct Attack or Collateral Attack

We first consider whether SOS Alliance's claims constitute a direct attack or a collateral attack. A direct attack is a proceeding instituted for the purpose of correcting the earlier judgment. Austin Indep. Sch. Dist. v. Sierra Club, 495 S.W.2d 878, 881 (Tex.1973). Such proceeding may be brought in the court rendering the judgment at issue or in another court that is authorized to review the judgment. See id. Examples of direct attacks include appeals, motions for new trial, and equitable bills of review. A collateral attack, on the other hand, is an attempt to avoid the binding force of a judgment in a proceeding not instituted for that purpose, but in order to obtain some specific relief against which the judgment currently stands as a bar. Browning v. Prostok, 165 S.W.3d 336, 346 (Tex.2005); Akers v. Simpson, 445 S.W.2d 957, 959 (Tex.1969). Examples of collateral attacks include a defendant's attempt to deny the existence of a judgment debt in an enforcement action on the judgment, and a party's attempt to avoid the effect of a judgment offered as a link in the chain of title in a suit to...