Default Does Not Mean Devoid of Evidence: Opinions, April 27, 2017

This morning the Fourteenth Court of Appeals released its memorandum opinion in Lucio v. Lucio, No. 14-15-00951-CV which concerns the minimum amount of evidence necessary for a division of the marital estate in a default divorce (and which is a companion to a similar opinion from the First Court of Appeals in Colmenero v. Colmenero that I previously blogged about).

Virginia and Victor were married in 1982 and Virginia filed her original petition for divorce in July, 2015. Victor did not file a timely answer. At the hearing, the following testimony from Virginia constituted the entirety of the evidence regarding the assets and liabilities of the estate:

Q. Okay. You have set forth in the decree a proposed division of your property and debts?
A. Yes.
Q. And you believe that the division is fair and equitable?
A. Fair, yes.
Q. And just and right?
A. Yes.
Q. And you’re asking the Court to approve that division as part of your divorce, correct?
A. Correct

Virginia had filed but not admitted to evidence a proposed decree assigning community property and debts between the parties. But the proposed decree did not include any values for the community property or the community estate in its entirety, nor did it list any amounts for outstanding debts. “In short, the trial court received no evidence regarding the value of the community assets or liabilities.”

The trial court entered a final decree which divided the estate but did not make any findings as to the values of any assets or liabilities. Victor subsequently filed an answer, a motion for new trial, and then a notice of appeal.

On appeal, Victor argued the evidence was legally insufficient to support the division. The Court of Appeals agreed, noting that even in a default, the petitioner must still present evidence to support the material allegations in the petition and that the only evidence in the record in support of the division was Virginia’s testimony that the division proposed was fair, just, and right. The Court of Appeals reversed and remanded for further proceedings.

Opinions, April 25, 2017: Post-Judgment Temporary Orders Pending Appeal

The First District Court of Appeals released its memorandum opinion in In re Christensen, No. 01-16-00893-CV, this morning concerning post-judgment temporary orders pending appeal under TFC 6.709.

Christina and Troy divorced. After a two-day bench trial, the trial court signed a final decree which awarded Christina stocks and funds in various accounts and ordered Troy to pay a portion of Christina’s attorney’s fees (in the amount of $20,000).

After Troy timely filed his notice of appeal, Christina moved for post-judgment temporary orders pending appeal under TFC 6.709. She requested the trial court, inter alia:  order Troy to 1) pay reasonable appellate attorney’s fees into the registry of the court to be payable to Christina upon Troy’s pursuit of an unsuccessful appeal or, in the alternative, grant a judgment against Troy for reasonable appellate attorney’s fees conditioned upon his pursuit of an unsuccessful appeal; 2) post a bond to secure his compliance with the terms of the decree; and 3) pay her temporary spousal support pending appeal.

Troy argued the motion was merely an attempt to penalize him for appealing, section 6.709 did not authorize prepayment of appellate attorney’s fees into the registry of the court or posting a bond, and payment of temporary spousal support was not justified.

The trial court granted Christina’s motion, awarding her $50,000 total ($30,000 for the district court of appeals and $20,000 for the Texas Supreme Court) if Troy unsuccessfully appealed and required him to pay these amounts into the court registry. The trial court also ordered Troy to post a bond of $275,000 (or its cash equivalent) to protect Christina against potential loss of property or property rights during the course of the appeal.

Troy filed a petition for writ of mandamus, alleging five issues. which the Court of Appeals addressed out of sequence.

The Court of Appeals sustained Troy’s second and third issue concerning prepayment of appellate fees into the registry of the court. Citing Halleman v. Halleman, No. 02-11-00238-CV, 2011 WL 5247882 (Tex.App.–Fort Worth, Nov. 3, 2011, orig. proceeding), the Court of Appeals found that section 6.709 does not authorize and the trial court abused its discretion in ordering Troy to prepay the attorney’s fees into the registry of the court because the appellate attorney’s fees will not be payable to Christina “if at all” until the appellate proceedings are final.

In his fourth issue, Troy argued the trial court abused its discretion by ordering him to post a bond in the amount of $275,000 (which included the $50,000 of appellate attorney’s fees). Christina had asserted in her motion for temporary orders that the bond should be sufficient to cover the value of the property as determined by the trial court at rendition plus interest. She also asked the trial court to require Troy to provide statements for the accounts and enjoin him from taking certain actions regarding the accounts until the appeal was final.

At the hearing on Christina’s motion, the parties testified regarding the accounts awarded in the divorce. Troy testified he had control over the accounts, Christina did not; Christina testified that Troy had not accounted for over $200,000 of assets awarded to her and that Troy had traded or sold about $300,000 in stocks, half of which were awarded to her. The opinion does not indicate Troy disputed Christina’s testimony on this point, but he did testify that “issues existed regarding the documents needed to transfer these accounts to Christina.” The Court of Appeals found that Troy presented no authority that the trial court lacked authority to order the bond and the trial court did not abuse its discretion in ordering it.

In his fifth issue, Troy contested the temporary monthly spousal support award of $3,500 until the appeal is final because, according to him, he does not have the financial ability to pay it, the calculation of the amount was flawed, and the support obligation “was part of the property division improperly disguised as spousal support.” He testified he had to borrow $25,000 from family to keep afloat, he could not afford either the $20,000 for Christina’s attorney’s fees ordered in the decree, nor the $250,000 bond or monthly spousal support. He also testified that he earned $214,000/year and had received a $24,000 bonus this year. His FIS indicated his net monthly income of $10,630 and monthly expenses of $13,638. Christina also testified that her means were significantly less than Troy’s. The Court of Appeals found no abuse of discretion in the award of temporary monthly support and overruled Troy’s fifth issue.

Finally, taking the first last, the Court of Appeals overruled Troy’s first issue in which he argued the temporary orders were not intended to protect Christina and her property, but to “unjustly penalize [him] for asserting his rights” to appeal. The Court of Appeals found the temporary orders do not prevent him from pursuing his appeal.

Opinions, April 13, 2017: Binding Post-Divorce Arbitration

Last Thursday, the Fourteenth Court of Appeals released two published opinions and the latest installment of the Reynolds Saga.

In re S.M.H. and W.H.H., No. 14-16-00566-CV, concerned the trial court’s vacatur of a binding arbitration award. When the parties divorced, father agreed to pay contractual alimony and the children’s private school tuition and other costs for extracurricular activities. The parties had executed an agreement incident to divorce, which was incorporated into the final decree.

Disputes arose over the interpretation of the AID. The mother filed a petition with the trial court to clarify the terms of the AID and to enforce obligations the father had allegedly failed to honor. The father filed a counter-petition, seeking a modification of his possession.

The parties attended mediation, which led to a partial settlement. They also signed a Rule 11 agreement to submit to arbitration. Under this Rule 11, the mediator would serve as arbitrator; the parents would both make a proposal and the arbitrator would pick one which would be the award, without changes (i.e. “baseball style”); the issues submitted to the arbitrator would be support and possession; the arbitrator’s ruling on support would be binding, but not her ruling on possession. Specifically, the arbitrator would meet with the children privately and then propose a “mediator’s proposal” on the terms of holiday schedules and long-distance visitation. These Rule 11 terms were incorporated into an Arbitration Agreement signed by the parties.

At the conclusion of arbitration, the arbitrator accepted mother’s proposal and drafted an award. The award contained two paragraphs which addressed the issue of possession in order language, not in the form of a mediator’s proposal. These paragraphs evidently ordered holidays to be split between the parents, that terms should be added to the decree for long distance visitation as father was planning to move to a different city, and father should participate in therapy as a condition of his possession.

The mother moved in the trial court to confirm the award and the father moved to vacate it. The trial court found the arbitrator had exceeded her authority and vacated the award in full. The mother objected to the vacatur, arguing the trial court should at least have confirmed the support provisions and severed the possession portion, but the trial court overruled her.

The case proceeded to trial on the merits, but the only matter heard was the father’s counter-petition to modify the terms of his possession. The parties abandoned all other pending claims. At the close of the evidence, the trial court found there was a change in circumstances and granted the father long-distance visitation. A final judgment modifying the decree was signed.

The mother appealed, asserting two issues: she argued the trial court erred in not confirming the support portion of the arbitration award and erred by proceeding to trial on the father’s counter-petition for modification.

To succeed on her first issue, under CPRC 171.091, the mother had to show that the parties submitted the support issue to arbitration but not the possession issue and that the removal of the possession portion of the award could be accomplished without affecting the support portion. The Court of Appeals found the mother established both.

The father made many arguments on appeal in an apparent effort to throw everything at the wall to see what stuck (e.g., that the arbitration award was excessive; the award was properly vacated because of the arbitrator’s partiality; the award would violate Texas law; and there was no meeting of the minds on the Arbitration Agreement). The Court of Appeals overruled each of these arguments and remanded to the trial court for a hearing on whether confirmation of the modified award is in the best interest of the children.

The mother’s second issue–that the trial court erred by proceeding to trial on the merits on the father’s counter-petition for modification of possession–was overruled by the Court of Appeals as well. First the mother argued that once an arbitration award is vacated, the trial court has no discretion but to order the parties back to arbitration. The COA disagreed, finding the trial court was not precluded from proceeding to trial. Secondly, the mother argued she was never served with citation of the father’s counter-petition for modification, but the COA found she waived the objection by not objecting when she made her appearance. Thirdly, the mother complained the trial court denied an oral motion for continuance made just before trial. As mother’s oral motion for continuance did not comply with Rule 251, the trial court did not abuse its discretion in denying it.

In summary, the COA reversed the portion of the trial court’s judgment which vacated the arbitration award and remanded the case for the trial court to determine whether confirmation of a modified award would be in the best interest of the children.

In In re McPeak, No. 14-17-00104-CV, the Court of Appeals granted a mandamus on two separate grounds. In February 2016, the mother and father separated and the mother moved with the children from the marital home in Brazoria County to Thorndale, Texas, about 40 miles northeast of Austin. Father filed for divorce in Brazoria County in October 2016. The parents signed agreed temporary orders, though mother was not represented by counsel and father was. The trial court approved the agreed temporary orders on November 22, 2016, which required the mother to move the children to Brazoria County or a contiguous county by January 1, 2017. If mother failed to do so, the children would be turned over to the father’s possession.

Mother retained counsel and filed a motion to set aside the temporary orders and, on December 8, a motion to modify the temporary orders, requesting the orders be set aside or at least that the geographic restriction be modified to include the mother’s new county of residence. On December 28 the mother also filed a motion for the court to confer with the oldest child (age 13) pursuant to TFC 153.009.

The trial court heard the motions on January 18, 2017 but stopped the hearing because the mother had not filed an affidavit under TFC 156.102 (Modification of Exclusive Right to Determine Primary Residence of Child Within One Year of Order). On January 19, the trial court signed an order denying the motion to confer and an order declining to consider further evidence and testimony. Mother filed a petition for writ of mandamus.

The Court of Appeals sustained the mother’s challenge on the affidavit issue because 156.102 applies to final orders, not temporary orders under 105.001. This imposed a higher burden of proof on the mother than the law required. The father did not deny the trial court erred in applying 156.102 instead of 105.001, but argued the court didn’t abuse its discretion because it reached the right result, if for the wrong reason. The Court of Appeals did not agree with the father and found the mother was prejudiced by the error for two reasons: the trial court stopped the hearing before she could present all her evidence and second, absent the trial court’s error, the mother might have met her lower burden of proof under 105.001.

The Court of Appeals also found that the trial court improperly denied her request under 153.009 to confer with the child because the statute is mandatory, not permissive.

Long-time readers of this blog should recognize Mr. and Ms. Reynolds from previous posts. The Court of Appeals’ latest memorandum opinion begins, “These former spouses appear regularly on our docket. In this latest chapter of their long-running dispute…” Ms. Reynolds’ issues on appeal this time are: 1) that the trial court erred in not granting a motion to compel Mr. Reynolds to provide financial documents; and 2) the trial court erred in granting Mr. Reynolds’ motion for summary judgment on his affirmative defense of collateral estoppel. On the first issue, the Court of Appeals stated Ms. Reynolds’ “subjective belief” that Mr. Reynolds was essentially hiding assets was not sufficient to demonstrate the trial court abused its discretion in denying the motion to compel. On the second issue, the Court of Appeals found Mr. Reynolds had established his affirmative defense of collateral estoppel because the issue of the division of the community estate’s interest in bonuses and other financial accounts was litigated during the original property division in 2009. Ms. Reynolds’ issues were overruled.

 

Opinions, April 11, 2017: Always Get Findings of Fact & Conclusions of Law If You’re Going to Appeal.

This morning the First District Court of Appeals released its published opinion in Brown v. Wokocha, No. 01-15-00759-CV, which underscores the necessity of obtaining findings of fact and conclusions of law in trial court if you’re going to appeal.

Brown and Wokocha married in 2004 and separated in 2011. Brown filed for divorce in August 2013. Wokocha countersued, alleging fraudulent transfer, intentional infliction of emotional distress and civil conspiracy, as well as breach of fiduciary duty and fraud claims against Brown and various business entities. Wokocha also added claims against Brown’s three adult daughters, alleging Brown had created business entities in her daughters’ names with community funds in an effort to defraud the community. The daughters’ motion for summary judgment was granted. The parties tried the case to the bench and the trial court entered a decree which Brown alleges on appeal improperly granted Wokocha a disproportionate share of the estate.

The decree does not state it is awarding Wokocha a disproportionate share of the estate; it merely says it is granting a just and right division. The trial court did not make any findings as to the value of any claim or asset and the record (limited per TRAP 34.6) did not include a request from Brown for findings of fact and conclusions of law. As such, the record does not contain findings on the values ascribed by the trial court to any community asset or liability or to Wokocha’s reimbursement claims or the percentage of the estate each party received in the division. Without this information, the Court of Appeals found it could not conclude the trial court abused its discretion.

Brown also challenged the trial court’s characterization of property. Brown alleges the trial court erred by finding three life insurance policies and three business entities were community property instead of separate property. Wokocha argued Brown could not establish the separate character of the life insurance policies because they were opened during the marriage (in her daughters’ names with her as the beneficiary) and maintained with community funds. Similarly, Wokocha argued the business entities were created during the marriage with community funds. The Court of Appeals ruled that even assuming the trial court erred in characterizing the property, Brown had not established the error materially affected the division of the estate because she did not request findings of fact and conclusions of law. Without findings, the COA could not discern the values the trial court gave to the property or what percentage of the estate the assets represented.

In her third issue, Brown argued the trial court erred by failing to award attorney’s fees to the attorney who represented her daughters and the business entities in trial court. Brown argues Wokocha improperly added these parties to the divorce as third-party defendants and thus they were entitled to a fee award. The COA found no support for Brown’s claim that third-party defendants in a divorce are entitled to an attorney’s fee award (Not to mention the fact that I’m not sure how Brown had standing to assert this issue on behalf of the third parties). The issue was overruled.

Opinions, March 7, 2017: Googling for Child Support Evidence

The Fourteenth Court of Appeals released a published opinion, Reagins v. Walker, No. 14-15-00764-CV, concerning the sufficiency of evidence to set child support, and a memorandum opinion in Parker v. Parker, No. 14-16-00098-CV, regarding DWOPs. Incidentally, the briefs of both appellants were filed pro se.

In Reagins v. Walker, the father appealed the trial court’s order modifying his child support because he alleged there was insufficient evidence presented to establish his net resources. Reagins did not show for his trial. The only witness called was Walker. No exhibits were offered into evidence. Walker testified that she had not been provided any documents regarding Reagins’ income such as paystubs or tax returns. She testified that she did online research and determined that Reagins was a petroleum engineer with at least one master’s degree. She further testified that she “investigated” what a petroleum engineer might make with his experience and “found a range of between $127,000 to $130,000.” She testified she believed he made a minimum of $127, 000/yr. She testified that Reagins’ two other children attend private school and what she stated was the tuition at that private school. She testified that Reagins had not provided her with information concerning his health insurance coverage. The trial court entered a child support order based off Walker’s testimony.

On appeal, the Court of Appeals agreed with Reagins that the trial court lacked sufficient evidence to calculate his net resources. “Walker’s generalized testimony based on internet searches was not sufficient to support the net resources calculation.” Even though Reagins did not appear for trial, Walker was still required to prove her case. The opinion appears to leave open the possibility that Walker’s internet research may have been sufficient, if it and her testimony had been more detailed or tailored to Reagins’ employment:

In that brief testimony, Walker admitted to having to resort to internet searches to get any information regarding Reagins’ employment. She did not, however, offer any specifics regarding the types of searches she conducted “on the Internet,” what search engines she may have used, or what websites she visited to obtain the information provided. She did not provide any specifics about Reagins’ employer, his position with the company, whether that work was on a full-time, part-time, or contract basis, or whether his job description was petroleum engineer.

The Court of Appeals, in fact, underlined this point:

The defect in this testimony is not the fact that it was based on internet research. The problem here is that Walker merely speculated regarding what Reagins might make based on general information she obtained on the internet.

The COA reversed and remanded on the child support issue. (Reagins’ second issue was that he had ineffective assistance of counsel, but that only applies in criminal cases and parental termination cases)

In Parker v. Parker, Eric Parker was incarcerated when he filed for divorce from his wife. He also filed a bench warrant requesting to be present for the divorce proceedings or, alternatively, to proceed by conference call. The trial court set the case for trial and provided notice of the date to Eric. The trial court issued an order denying the request of personal appearance but allowing him to appear by telephone. The trial court dismissed his case for want of prosecution on the trial date. The order of dismissal stated that the case was dismissed because there was no announcement by attorneys or parties and because there had been no service of process on the wife. Eric appealed the dismissal, arguing that appearance by telephone was insufficient and violated his due process rights because does not have independent access to a telephone. “Here, appellant got what he requested — the ability to participate telephonically — and there is no evidence in the record suggesting that he was in any way prevented from telephonically appearing for his trial.” The issue was overruled and the dismissal was affirmed.

Opinions, Feb. 24, 2017: RIP Chief Justice Jack Pope; Abduction & Temporary Emergency Jurisdiction Under TFC 152.204; & Interpretation of Divorce Decrees

First order of business: I was sad to hear that former Texas Supreme Court Chief Justice Jack Pope passed away last weekend at the age of 103. I had previously blogged on Chief Justice Pope and his influence in family law as he was the author of the touchstone enforcement case Ex parte Slavin. Incidentally, Slavin was issued 50 years ago today. I have often thought of resuming blogging about all cases that cite Slavin, but I have a hard time keeping up with the blog as it is sometimes.

Case in point, I have not blogged on the Texas Supreme Court’s guidepost decision on the “acceptance of benefits” doctrine that came out a month ago (Kramer v. Kastleman) because I wanted to review it a few times and think about it. Stay tuned for that one.

On to the recent First and Fourteenth cases. On February 24, 2017, the Fourteenth Court of Appeals released a published opinion in In re S.J., No. 14-17-00054-CV, a mandamus proceeding regarding temporary emergency jurisdiction under Tex. Fam. Code §152.204. Full disclosure: my firm and I represented the petitioner in this case and the estimable Donn Fullenweider, Grady Reiff, and Sallee Smyth represented the Real Party in Interest. I’m blogging about it because it is a published opinion and it weighs in on an issue that was arguably unclear after the First District’s opinion in In re Salminen regarding whether or not a risk of international abduction is sufficient grounds to trigger temporary emergency jurisdiction under section 152.204.  In In re Salminen (which my firm and I also handled), we argued to the trial court that a risk of international abduction was sufficient evidence of threat of abuse or mistreatment of a child to trigger temporary emergency jurisdiction under section 152.204. The trial court agreed, exercised TEJ, and issued temporary orders which granted our client temporary SMC. The mother filed a petition for writ of mandamus which the First District Court of Appeals granted, finding that the father had not established any of the grounds for TEJ under 152.204. The way I read the opinion in In re Salminen, the First District held that even if a trial court finds that a parent is an abduction risk, the statute requires a showing of mistreatment or abuse (or a threat of mistreatment or abuse) and that a risk of abduction does not meet the statutory language sufficient to trigger TEJ.

The Fourteenth Court of Appeals agreed, looking to section 261.001 of the Family Code which states that abuse includes “mental or emotional injury to a child that results in an observable and material impairment in the child’s growth, development, or psychological functioning” or “physical injury that results in substantial harm to the child, or the genuine threat of substantial harm from physical injury to the child.” Tex. Fam. Code § 261.001. At trial (which was the same trial court as in In re Salminen) the father and the father’s counsel conceded on the record that the mother was a good parent who had never been physically violent with the child. Given this admission, the only basis for TEJ was the purported threat of abduction but the Fourteenth joined the First, Fifth (Dallas), and Twelfth (Tyler) Courts of Appeal in holding that mother’s moving the child to Texas without the father’s knowledge consent “is not sufficient, by itself, to prove that it was ‘necessary in an emergency to protect the child because the child… is subjected to or threatened with mistreatment or abuse.'”

Also on February 24, 2017, the First District Court of Appeals released its memorandum opinion in Gallis v. Papadogiannis, No. 01-15-00794-CV, which clocks in at a whopping 54 pages.  Despite its mammoth length, the crux of the appeal is the interpretation of the parties’ agreed final decree. The Court of Appeals affirmed in part and reversed and rendered in part.

The parties divorced in 2011. Their agreed final decree divided the property, appointed them JMCs with the mother as primary and father having a SPO. Father was ordered to pay $1,500 in child support per month, plus monthly spousal support, the mother’s health insurance, the minor child’s health insurance, the minor child’s uninsured medical and the college expenses of the minor and adult children.

In 2013, the father filed a “Original Petition to Modify Suit Affecting the Parent-Child Relationship, Damage Suit for Parental Alienation and Interference with Possessory Interest in Child, and Suit for Breach of Contract” in the trial court. This appears to have kicked off a campaign of motion filing for the next couple of years. Seriously, the recitation of procedural history reads like the Catalogue of Ships from Book 2 of The Iliad.

The major issue on appeal concerned provisions for the mother’s purchase of a house. Under the decree, the mother had 18 or 24 months (there are conflicting provisions in the decree) to find and purchase a house costing less than $700,000; the father would pay the full purchase price but he would be awarded a 20% interest in the house. The father would also pay insurance, the water bill, and property taxes on the house until either the child aged out or the mother sold the house, whichever occurred first. If the house chosen by the mother costs less than $700,000, the father was to pay the difference between the purchase price and the $700,000 to the mother.

Also, the decree provided that if the mother found and purchased a house within the 24 months, the father’s monthly spousal support payments would decrease from $5,000/mo to $4,000/mo.

The father alleged that he had put up $681,000 of the $700,00 required under the decree but, after 26 months, the mother had not found or purchased a house.  At trial, the father requested the $681,000 be returned to him and that the mother be ordered to pay his attorney’s fees. The mother requested that she be awarded the money to purchase a house. She also stated she would still grant the father the 20% interest he was due under the decree.

The father testified that the mother’s attorney had drafted the decree but he had helped (though he was pro se when the decree was drafted). He testified that he understood the decree to say that the mother had 24 months to select a house to buy which would trigger his obligation to provide up to $700,000 for the purchase and he would receive a 20% interest in the house. He testified that the mother asked him for house money in July 2012 and he paid her $560,000 at that time though she did not select a house. He emptied his 401(k) and savings and that, within 24 months after the 2011 decree was signed, he had paid the mother 97% of the $700,00 (i.e. $681,000). He testified he regarded the 20% as a real estate investment which would accrue value. He testified he was damaged by the mother’s failure to purchase a house because it meant his monthly spousal support  obligation would not decrease.

The mother testified that she moved to New York on July 11, 2013, just shy of two years after the divorce. She testified that during the almost two years she lived in Houston after the divorce, she never indicated to the father that she had selected a house to purchase. She instead decided to wait until he had delivered the entire $700,000 and then purchase a house. She made two offers on houses in New York after the 24 months post-divorce period had passed, but they were not accepted. She took the deposits from those offers and put them into her attorney’s IOLTA account.

In interpreting the decree, the trial court ruled: (1) the father was not obligated to pay $700,000 for the purchase of a house because the mother did not purchase a house within 24 months of the decree, and (2) after the 24-month house-purchase window had closed, the father was only obligated to pay $4,000 per month in spousal support rather than $5,000 a month. The Court of Appeals affirmed the first ruling but disagreed with the second. Specifically, the trial court found that the mother breached the decree by failing to purchase a house within 18 or 24 months but the Court of Appeals found she was under no obligation to purchase a house because the decree included contingencies which contemplated the mother would have the choice of which action to take. Also, the trial court decided the father’s monthly spousal support obligation automatically decreased from $5,000 to $4,000 24 months after the decree was entered, but the Court of Appeals said there wasn’t any language in the decree to support that conclusion.

Thus, the Court of Appeals ruled the trial court was correct in concluding the father did not owe the mother the $700,000 because his obligation was never triggered but incorrect in reducing the monthly spousal support.

 

Opinions, Feb. 2, 2017: Bill of Review & Proving Post-Default Judgment Diligence

Happy Groundhog Day! Hope yours is better than Phil’s.

The Fourteenth Court of Appeals released its memorandum opinion in Grant v. Calligan, No. 14-15-01084-CV this morning, affirming the trial court’s denial of a bill of review.

Grant filed a divorce petition against Calligan in 2013. The trial court sent a scheduling order with a trial date (January 13, 2014) to Grant’s attorney. Grant’s attorney testified he never received this notice. Calligan showed at the trial, but Grant and his attorney did not. The trial court (the 246th) entered a default judgment which was signed January 31, 2014.

About ten months later, on December 2, 2014, Grant filed a bill of review. At trial, Grant’s attorney testified that he never received notice of trial. The Court of Appeals presumed this to be true in its analysis. Grant’s attorney also testified that when he received notice of the default judgment, he called up his appellate counsel. But, the Court of Appeals noted, the record did not contain any evidence of when that allegedly happened. That is, was it while the trial court still had plenary power or not?

Even though the Court of Appeals presumed Grant established that he did not receive notice of the trial date, he still had the burden of establishing that he diligently pursued “all available and adequate legal remedies against the default judgment.” Grant asserted he was not required to pursue any post-judgment remedies (such as a MNT) because he also did not receive notice of the default judgment until after the trial court’s plenary power expired. The record did not include any evidence which tended to show Grant’s attorney didn’t receive notice of the default judgment, either. At this point, I was thinking “How can you prove you didn’t receive something?” But the Court of Appeals pointed to the following exchange between the trial court and Grant’s attorney:

Trial Court: What did you do when you got the notice of the clerk that the default had been granted?

Grant’s Attorney: That’s when I contacted my client to see if he received any–anything in the mail or was served–personally served and he said no and then contacted [appellate counsel].

This testimony, the Court of Appeals stated, did not indicate when Grant’s attorney received notice of the default judgment, much less the date he contacted his client or appellate counsel. As such, the COA said, the record did not include evidence that he received notice of the default judgment after the trial court lost plenary power, meaning Grant failed to establish that he diligently pursued his available legal remedies. The COA affirmed the trial court’s denial of the Bill of Review.

This raises the question: If Grant’s attorney had testified that he received the notice of default judgment on March 3 (the day after the trial court lost plenary power), would that have been sufficient evidence to overrule the trial court’s denial of the BOR? If I had world enough and time, I’d research it myself to see if there’s any caselaw out there. However, the fact that the BOR petition wasn’t filed for ten months  after the default was entered certainly is a strike against Grant’s case.