Perdue v. Patten Corp.

A party who receives notice of a judgment too late to pursue other legal remedies is necessarily relieved of the requirement of showing due diligence in pursuing legal remedies against that judgment. Because there is a fact issue whether the Perdues' failure to receive notice of the dismissal hearing was the result of official mistake, it would be error to find as a matter of law that they had not exercised due diligence in pursuing legal remedies.

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Click here for the full text of this decision FACTS:In 1991, Matthew Perdue and his mother, Thelma Cade-Perdue, each bought an undeveloped lot in a subdivision developed by Patten Corp. and Southwest Patten Corp. The Perdues assert that before the sale and in the purchase contracts Patten represented that the lots were buildable and had available potable water. When these representations proved to be untrue, the Perdues filed suit against Patten in 1995, alleging breach of contract, violations of the Texas Deceptive Trade Practices-Consumer Protection Act, and fraud. About a year after they filed suit, their attorney Michael Kuehr was called for Army Reserve duty; he filed a motion to withdraw as the Perdues’ counsel and substituted attorneys L. Lashelle Wilson and David Bosworth, who shared the same address. When the court placed the cases on the dismissal docket in July 1998, it sent a notice of the “drop docket” to Patten’s attorney and Kuehr — but not to Wilson or Bosworth; the cases were to be dismissed if no party appeared on Aug. 31, 1998. When the Perdues failed to appear, the court signed an order dismissing their causes. The Perdues did not find out about the dismissal until the spring of 1999. In July 1999, Wilson filed a petition for bill of review on behalf of the Perdues. About a year later, Bosworth became the Perdues’ attorney of record in place of Wilson. In July 2002, Patten filed a motion for summary judgment, asserting that there was no evidence to support three of the necessary elements of a bill of review: that 1. the plaintiffs were prevented from making their claim by some fraud on behalf of the opposing party or an official mistake by the court; 2. the plaintiffs’ own negligence did not contribute to the dismissal of their claims; and 3. the plaintiffs exercised due diligence in pursuing other legal remedies against the judgment. The court granted a no-evidence summary judgment on April 12, 2003. The Perdues filed a motion for new trial, which the court announced it was granting in a letter to counsel dated July 22, 2003; the formal order granting a new trial was entered on July 31, 2003. HOLDING:The Perdues’ summary-judgment evidence raises a fact issue on each of the challenged elements of their bill of review. The court reverses the summary judgment of the trial court and remands this cause for further proceedings consistent with this opinion. The trial court’s July 22 letter to counsel was not an “order” for purposes of Texas Rule of Civil Procedure 329b. The formal order signed on July 31 is the controlling order. It is null because it was signed more than 30 days after the motion for new trial was overruled by operation of law. Therefore, the summary judgment was not vacated and was a final, appealable order. In mid-July 1996, the Perdues filed their first set of interrogatories and request for production with the court; they were signed by Wilson and noted Wilson’s address. The court concludes that this evidence creates a fact issue on whether the district court made an “official mistake” in failing to inform the Perdues’ attorneys of record about the dismissal-docket setting. Summary judgment based on this element was improper. When the evidence is uncontroverted that a party had notice of a dismissal or default judgment within the time period during which it could seek a post-judgment remedy short of a bill of review, that party has not, as a matter of law, exercised due diligence if it has not sought such remedy and can offer no good cause for such failure. However, if a party through no negligence of its own fails to receive notice of a dismissal or a default judgment until a time when other legal remedies are no longer available, that party may seek a remedy in the form of a bill of review. Thus, it follows that a party who receives notice of a judgment too late to pursue other legal remedies is necessarily relieved of the requirement of showing due diligence in pursuing legal remedies against that judgment. Because there is a fact issue concerning whether the Perdues’ failure to receive notice of the dismissal hearing and subsequent dismissal was the result of official mistake, the court concludes that it would be error to find as a matter of law that they had not exercised due diligence in pursuing legal remedies against a judgment they did not know about. OPINION:Smith, J.; Kidd, Smith and Pemberton, JJ.

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