Layton v. Nationsbanc Mortgage Corp.

Given the lack of evidence of fraud underlying the default judgment and the trial court's extremely limited discretion to grant bills of review overturning default judgments, the court concludes that the trial court abused its discretion in granting the appellee's bill of review without a showing of extrinsic fraud.

X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:The appellant, Eleanore Layton, appeals from the trial court’s decision to grant a bill of review to the appellee, Nationsbanc Mortgage Corp., and to set aside a default judgment granted in favor of Layton over four years earlier. HOLDING:The court reverses the judgment of the trial court granting the bill of review and permanent injunction and reinstates the prior judgment. Given the lack of evidence of fraud underlying the default judgment and the trial court’s extremely limited discretion to grant bills of review overturning default judgments, the court concludes that the trial court abused its discretion in granting Nationsbanc’s bill of review without a showing of extrinsic fraud. The court finds no case in which improper service of process alone, where the defendant had actual notice of the suit, without an additional showing of actual fraud, has sufficed to overturn a default judgment after the four-year statute of limitations has run. One court of appeals has held to the contrary, noting that a defendant who was improperly served but did have actual notice of the judgment against him could not argue in a post-limitations bill of review that defective service alone makes a default judgment void. Dispensa v. Univ. State Bank, 987 S.W.2d 923 (Tex. App. � Houston [14th Dist.] 1999, no pet.). Nationsbanc alleges that the default judgment was void because Layton failed to strictly comply with the rules of procedure governing citation issuance and service of process. It is apparent from the record, however, that CT Corp., Nationsbanc’s registered agent for service of process in Texas, was duly served. Nationsbanc asserts that this service was improper because the citation incorrectly spelled Nationsbanc as “Nationsbank” and because the return of service form filled out by the process server did not indicate that a copy of the petition had been served with the citation as required. This court has previously held that “a misnomer of a defendant does not render a judgment based on personal service, even one by default, void, provided the intention to sue the defendants actually served with citation is so evident from the pleadings and process that the defendant could not have been misled.” Baker v. Charles, 746 S.W.2d 854 (Tex. App. � Corpus Christi 1988, no writ). The court finds that Nationsbanc was clearly aware of Layton’s complaint, was not misled by the alleged misnomer, and was in fact in possession of her petition. The errors in service did not prevent Nationsbanc from appearing in court to defend itself or deny it the right to fully litigate its rights or defenses in the matter. Nationsbanc also argues that, in addition to the errors in the service of process, Layton committed extrinsic fraud by deliberately filing a false certificate of last known address following entry of the default judgment. However, Nationsbanc failed to demonstrate why an address included in the court record as one it had previously provided to Layton for the receipt of payments would be a fraudulent address for the purposes of receiving notices of judgment. The court notes that Texas Rule of Civil Procedure 239a, which governs such certifications, was designed primarily as an administrative convenience, and failure to comply with the rule does not affect the finality of the judgment. The court concludes Nationsbanc has failed to demonstrate any evidence of extrinsic fraud by Layton in the filing of the certificate of last known address. The evidence in the record clearly demonstrates that Nationsbanc had actual notice of Layton’s suit and that it made no attempt to act on its rights until Layton’s attorney contacted it more than four years after entry of the default judgment. Furthermore, Nationsbanc failed to provide evidence demonstrating that the errors in service were fraudulent and were intended by Layton to keep Nationsbanc away from court or render it unable to defend itself. Thus, Nationsbanc failed to show extrinsic fraud in the procurement of the default judgment. OPINION:Dori Contreras Garza, J.; Valdez, C.J., Rodriguez and Garza, JJ.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

Trending Stories

 

Featured Product

Global Briefing

A weekly, curated selection of our international content from around the globe, across the business of law, in-house, regulatory, technology and more, with expert insights from our senior editors.

Learn More

More from ALM

 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Privacy Policy

About Us / Contact Us / Site Map / Advertise With Us/ Customer Service / Terms of Service/ FAQ / Privacy Policy

Publications

Law Topics

Rankings

More

Law.com

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.