In re Tex. Real Estate Comm'n

Fourth Court of Appeals San Antonio, TexasJan 24, 2018
No. 04-17-00379-CV (Tex. App. Jan. 24, 2018)

No. 04-17-00379-CV

01-24-2018

IN RE TEXAS REAL ESTATE COMMISSION


DISSENTING OPINION

Original Mandamus Proceeding Opinion by: Sandee Bryan Marion, Chief Justice
Dissenting Opinion by: Rebeca C. Martinez, Justice Sitting: Sandee Bryan Marion, Chief Justice Rebeca C. Martinez, Justice Patricia O. Alvarez, Justice

This proceeding arises out of Cause No. 2016-CI-03723, styled Evan Jacobson v. Ben Luong, pending in the 45th Judicial District Court, Bexar County, Texas, the Honorable Stephani A. Walsh presiding. --------

I dissent from the majority's opinion conditionally granting mandamus relief from the trial court's order granting real party in interest Evan Jacobson's bill of review and setting aside the default judgment against him. Based on the analysis set forth below, I would deny the petition for writ of mandamus filed by the relator Texas Real Estate Commission ("TREC").

The majority holds that the trial court abused its discretion in granting Jacobson's petition for bill of review because Jacobson failed to meet the third prong under the general bill of review standard, i.e., the absence of any fault or negligence of his own. See Caldwell v. Barnes, 154 S.W.3d 93, 96 (Tex. 2004); see also In re J.M., IV, 373 S.W.3d 725, 728-29 (Tex. App.—San Antonio 2012, orig. proceeding). I disagree with the majority's analysis. In cases where the trial court fails to send timely notice of a default judgment, the general bill of review standard is modified. In re RPH Capital Partners, LP, No. 04-16-00424-CV, 2017 WL 2561562, at *2 (Tex. App.—San Antonio June 14, 2017, orig. proceeding). "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.

The record establishes that the district clerk failed to timely send Jacobson notice of the July 31, 2013 default judgment as required by Rules 239a and 306a. See TEX. R. CIV. P. 239a (requiring the court clerk to mail written notice to the party against whom a default judgment is taken "immediately upon the signing of the judgment"); see also TEX. R. CIV. P. 306a(3) (requiring the clerk to send notice to the parties or their attorneys by first-class mail "immediately" after the final judgment is signed). It is undisputed that the lack of notice caused Jacobson to miss the deadline for filing a motion for new trial. See TEX. R. CIV. P. 329b(a); see also In re RPH, 2017 WL 2561562, at *2. More than thirty days after the judgment date, the district clerk mailed a notice on September 5, 2013 informing Jacobson that "a default judgment/order/decree [was] entered against you" on July 31, 2013.

TREC argues, and the majority agrees, that the late notice of the default judgment did not preclude Jacobson from filing a motion for new trial under the potential extended deadline provided by Rule 306a(4). TEX. R. CIV. P. 306a(4), (5) (requiring party adversely affected by late notice to prove the application of subsection (4) by sworn motion in the trial court). The majority concludes that Jacobson was at fault and/or negligent in failing to pursue the legal remedy available to him under Rules 306a(4) and (5). It ignores this court's precedent in In re RPH and City of Laredo v. Threadgill which dictates application of the Craddock standard upon a showing that a failure to comply with the mandate under Rule 306a(3) prevented a party from filing a motion for new trial. In re RPH, 2017 WL 2561562, at *2; City of Laredo v. Threadgill, 686 S.W.2d 734, 735 (Tex. App.—San Antonio 1985, no writ). That Rules 306a(4) and (5) otherwise provide a means to extend the trial court's plenary power is inapposite. Here, the record shows that the clerk of the court failed to provide Jacobson notice of the judgment per Rule 306a(3), and this lack of notice caused him to miss the deadline to file a motion for new trial. We are therefore required to apply the Craddock standard to Jacobson's bill of review petition. Craddock, 133 S.W.2d at 126; In re RPH, 2017 WL 2561562, at *2.

Under Craddock, Jacobson was required to prove that: (1) his failure to appear at trial was not intentional or the result of conscious indifference, but was due to mistake or accident; (2) he has a meritorious defense to the underlying suit; and (3) setting aside the default judgment and granting a new trial will not delay or otherwise work an injury to the opposing party. In re RPH, 2017 WL 2561562, at *2 (citing Craddock, 133 S.W.2d at 126).

With respect to the first Craddock factor, Jacobson asserted in his petition that he did not receive the required forty-five days' notice of the July 31, 2013 trial date, the first trial setting in the case. See TEX. R. CIV. P. 245, 503.3 (forty-five days' notice of the first trial setting must be given to the parties who have answered or appeared in the case); see also Custom-Crete, Inc. v. K-Bar Servs., Inc., 82 S.W.3d 655, 659 (Tex. App.—San Antonio 2002, no pet.) (the forty-five day notice provision of Rule 245 is mandatory in a contested case). There is no dispute that less than forty-five days' notice of the trial setting was given to Jacobson. The record shows that Luong's motion to set the case for trial on the non-jury docket was filed on July 1, 2013, and the case was set for trial thirty days later on July 31, 2013. "A party that has filed an answer is 'entitled to notice of the trial setting as a matter of due process under the Fourteenth Amendment to the federal constitution.'" In re RPH, 2017 WL 2561562, at *2 (quoting Custom-Crete, Inc. v. K-Bar Servs., Inc., 82 S.W.3d 655, 659 (Tex. App.—San Antonio 2002, no pet.)). Failure to give the mandatory forty-five days' notice constitutes a due process violation and provides grounds for reversal. Custom-Crete, 82 S.W.3d at 659. The fact that Jacobson obtained knowledge of the July 31, 2013 trial setting on July 15, 2013 does not cure the due process violation. See Hanners v. State Bar of Texas, 860 S.W.2d 903, 907-08 (Tex. App.—Dallas 1993, writ dismissed) (actual knowledge does not substitute for the required forty-five days' notice). Moreover, Jacobson took action on July 15 when he obtained knowledge of the trial setting by filing an objection based on insufficient notice; therefore, he did not waive the complaint of insufficient notice. See Custom-Crete, 82 S.W.3d at 659 (party may waive complaint by failing to take action when party receives some, but less than forty-five days, notice of trial). Because Jacobson proved that he did not receive the mandatory forty-five days' notice of the trial setting, he has satisfied the first Craddock factor. Id.; TEX. R. CIV. P. 245, 503.3.

With respect to the second and third Craddock factors, "[w]hen a party demonstrates it did not receive forty-five days' notice of the first trial setting, it has satisfied the first Craddock factor, and is relieved of the burden of meeting the remaining factors." In re RPH, 2017 WL 2561562, at *3; Custom-Crete, 82 S.W.3d at 660. Due to the denial of fundamental due process, a person who is not notified of a trial setting and suffers a post-answer default judgment need not establish a meritorious defense or lack of prejudice to the opposing party to be entitled to a new trial. Custom-Crete, 82 S.W.3d at 660; Stiles v. Stiles, No. 04-08-00885-CV, 2009 WL 2045229, at *2 (Tex. App.—San Antonio July 15, 2009, no pet.) (mem. op.).

Based on application of the Craddock standard to the record before us, the trial court did not clearly abuse its discretion by granting Jacobson's bill of review and setting aside the default judgment against him. For this reason, I respectfully dissent.

Rebeca C. Martinez, Justice