Opinion
No. 05-10-00775-CV
01-25-2012
NAVIGANT CONSULTING, INC., Appellant v. SHARON TAULMAN, Appellee
Reverse and Render; Opinion Filed January 25, 2012.
On Appeal from the County Court at Law No. 2
Dallas County, Texas
Trial Court Cause No. CC-07-14289-B
MEMORANDUM OPINION
Before Justices Morris, Francis, and Lang-Miers
Opinion By Justice Lang-Miers
Appellant Navigant Consulting, Inc. sought to enforce a federal judgment against appellee Sharon Taulman by filing the judgment with the clerk of Dallas County pursuant to the Uniform Enforcement of Foreign Judgments Act (the Act). See Tex. Civ. Prac. & Rem. Code Ann. §§ 35.001-.008 (West 2008 & Supp. 2011). Taulman filed a petition for bill of review to set aside the resulting state judgment. See id. § 35.003(b) (when foreign judgment is filed it becomes the judgment of the court in which it is filed). The state court rendered judgment in Taulman's favor and vacated the state judgment. Navigant appeals. Because this appeal involves the application of well- settled principles of law, we issue this memorandum opinion. See Tex. R. App. P. 47.4. We vacate the final judgment, reverse the trial court's order granting Taulman's bill of review, render judgment dismissing Taulman's bill of review, and reinstate the underlying state judgment in favor of Navigant.
The Act was amended after the federal judgment was filed, but because no substantive changes were made that affect our analysis, we cite to the current version of the statute.
Background
Navigant obtained a judgment against Taulman following a jury trial in a Texas federal district court. Navigant sought to enforce the federal judgment in Texas state court by filing a "Petition to Enforce Foreign Judgment" and an ex parte application for turnover relief. Meanwhile, Taulman moved the federal court to modify the federal judgment. Prior to the hearing on Taulman's motion in federal court, the state court issued an order denying Navigant's petition for enforcement and application for turnover relief, stating:
The Court, after considering the Petition and the Ex Parte Application, along with the arguments and authorities of counsel, and upon further research of the applicable authorities, hereby DENIES the Petition and the Ex Parte Application, and, in doing so, cites the Plaintiff to Rule 69 (a) of the Federal Rules of Civil Procedure.
Federal Rule of Civil Procedure 69(a) provides:
RULE 69. EXECUTION
(a) In General.
(1) Money Judgment; Applicable Procedure. A money judgment is enforced by a writ of execution, unless the court directs otherwise. The procedure on execution-and in proceedings supplementary to and in aid of judgment or execution-must accord with the procedure of the state where the court is located, but a federal statute governs to the extent it applies.
(2) Obtaining Discovery. In aid of the judgment or execution, the judgment creditor or a successor in interest whose interest appears of record may obtain discovery from any person-including the judgment debtor-as provided in these rules or by the procedure of the state where the court is located.
After the state court issued this order, the federal court granted in part Taulman's motion to modify the judgment and issued an amended final judgment. At some point, Navigant changed attorneys, and its new attorney sought to enforce the amended federal judgment by filing it with the clerk of Dallas County pursuant to the Act. Upon receiving notice that Navigant had filed the amended federal judgment in state court pursuant to the Act, Taulman's attorney told Navigant's attorney that a state court had denied the same request for relief in an earlier enforcement proceeding and emailed the pleadings from the earlier enforcement proceeding to Navigant's attorney. Navigant's attorney replied that she would "contact [her] client and get back with" Taulman's attorney. But Navigant's attorney never got back with Taulman's attorney. And nothing happened after this email communication between attorneys until almost a year later when Taulman filed an answer and this petition for bill of review in the underlying enforcement proceeding. The trial court conducted a preliminary hearing on the petition and ruled in Taulman's favor. Afterward, both parties moved for summary judgment on the merits of the bill of review. The trial court granted Taulman's motion, denied Navigant's motion, and vacated the state judgment.
Taulman states in her brief that Navigant filed a motion in this case seeking to clarify the earlier state court order denying Navigant's petition to enforce the foreign judgment and, after that motion was filed, she filed an answer and this petition for bill of review. No motion to clarify the earlier state court order is included in the record on appeal.
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In two issues, Navigant argues that the trial court abused its discretion by granting the bill of review.
Standard of Review for Bill of Review
We review a trial court's ruling on a bill of review for an abuse of discretion. Ramsey v. Davis, 261 S.W.3d 811, 815 (Tex. App.-Dallas 2008, pet. denied). Because a trial court has no discretion in determining what the law is or in applying the law to the facts of a case, we review a trial court's decision on a question of law de novo. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding); Presley v. McConnell-Presley, No. 05-08-01019, 2009 WL 1579185, at *2 (Tex. App.-Dallas June 8, 2009, no pet.) (mem. op.). And statutory construction is a question of law. First Nat'l Collection Bureau, Inc. v. Walker, 348 S.W.3d 329, 335 (Tex. App.-Dallas 2011, pet. denied).
Applicable Law for Bill of Review
"A bill of review is an equitable proceeding brought by a party seeking to set aside a prior judgment that is no longer subject to challenge by a motion for new trial or appeal." Caldwell v. Barnes, 154 S.W.3d 93, 96 (Tex. 2004) (per curiam). A bill of review plaintiff must file a petition invoking the equitable powers of the court. Baker v. Goldsmith, 582 S.W.2d 404, 408 (Tex. 1979). The petition must allege with particularity that the prior judgment was rendered as the result of fraud, accident, or wrongful act of the opposite party or official mistake and without any negligence on the part of the bill of review plaintiff. Caldwell, 154 S.W.3d at 96; Goldsmith, 582 S.W.2d 408.
The petition also must allege a meritorious defense to the cause of action in which the judgment was rendered, and, as a preliminary matter, the bill of review plaintiff must present prima facie proof to support that meritorious defense. Goldsmith, 582 S.W.2d at 408. Prima facie proof of a meritorious defense is proof that shows the defense is not barred as a matter of law and would entitle the bill of review plaintiff to judgment on retrial if no evidence to the contrary is offered. Id. at 408-09. Whether a bill of review plaintiff has presented prima facie proof of a meritorious defense is a question of law. Id. at 409. If the trial court determines that the bill of review plaintiff has presented prima facie proof of a meritorious defense, the court conducts a trial on the merits of the bill of review. Id. If the court determines that the bill of review plaintiff has not presented prima facie proof of a meritorious defense, the court must dismiss the bill of review proceeding. Id.
Discussion
In issue one, Navigant argues that the trial court abused its discretion by ruling in Taulman's favor at the preliminary hearing on the bill of review because she did not offer prima facie proof of a meritorious defense. Taulman asserted three defenses below: (1) the court lacked jurisdiction to enforce the federal judgment, (2) Navigant did not comply with the Act's notice requirements, and (3) the enforcement proceeding was barred by res judicata. Because the trial court did not state the basis for its ruling, we examine each of the asserted defenses.
Defense that State Court Lacked Jurisdiction
In her petition for bill of review, Taulman argued that the Act does not permit a judgment creditor to enforce a judgment rendered by a Texas federal court. She argued that the Act applies only to judgments from sister state and federal courts, not to judgments from federal courts in the same state. Consequently, she argued, the state court lacked jurisdiction to render the judgment in the underlying enforcement proceeding because the judgment Navigant sought to enforce was issued by a Texas federal court.
Navigant argues that the Act permits a party to enforce judgments rendered by federal courts in Texas and that Taulman's argument to the contrary is not a meritorious defense to the enforcement proceeding as a matter of law. We agree.
The Act permits a party to enforce a "foreign judgment" by filing the judgment with the clerk of any court of competent jurisdiction in Texas. Tex. Civ. Prac. & Rem. Code Ann. § 35.003(a). The clerk is required to "treat the foreign judgment in the same manner as a judgment of the court in which the foreign judgment is filed." Id. § 35.003(b). The Act defines "foreign judgment" as "a judgment, decree, or order of a court of the United States or of any other court that is entitled to full faith and credit in this state." Id. § 35.001.
Taulman bore the burden to present prima facie proof that the state court did not have jurisdiction of the underlying enforcement proceeding. But she did not offer any authority that the legislature intended to exclude judgments issued by federal courts in Texas from the Act's application. And the plain language of the Act does not exclude judgments rendered by federal courts in Texas. See Tex. Civ. Prac. & Rem. Code Ann § 35.001; Tanner v. McCarthy, 274 S.W.3d 311, 318 (Tex. App.-Houston [1st Dist.] 2008, no pet.). Instead, it defines "foreign judgment" to include judgments "of a court of the United States." See Tex. Civ. Prac. & Rem. Code Ann. § 35.001; Tanner, 274 S.W.3d at 318.
We conclude that Taulman did not offer prima facie proof that the trial court lacked jurisdiction to enforce the federal judgment. We further conclude that the trial court abused its discretion if its preliminary ruling was based on this defense.
Defense that Navigant did not Comply with the Act's Notice Requirements
As another defense to the underlying enforcement proceeding, Taulman argued that Navigant did not comply with the Act's requirements for giving notice of filing a foreign judgment. She argued that the Act required Navigant to include the judgment debtor's attorney's name and address on the notice and that Navigant failed to do so. She argued that "[t]he clerk has no idea if the judgment debtor has counsel in this state. So to say, oh, it's the clerk's fault that the notice didn't have the statutory required information, in other words, my name and address is, I think, dodging their responsibilities. It's their responsibility to give the clerk the information necessary for the notice to comply with the statute. And so that excuse just doesn't wash here."
Navigant argues that its notice complied with the statute. We agree with Navigant.
Section 35.004 of the Act requires the notice of filing a foreign judgment to contain certain information about the judgment creditor, the judgment creditor's attorney, and the judgment debtor. Tex. Civ. Prac. & Rem. Code Ann. § 35.004(a). It does not require the notice to contain the name and address of the judgment debtor's attorney. See id. § 35.004(a)-(c). Consequently, we conclude that Taulman did not offer prima facie proof that Navigant failed to comply with the Act's notice requirements by failing to include Taulman's attorney's name and address in the notice. We further conclude that the trial court abused its discretion if its preliminary ruling was based on this defense.
Defense of Res Judicata
Taulman also argued below that the underlying enforcement proceeding was barred by res judicata. She contended that the earlier enforcement proceeding, in which the court denied relief to Navigant, involved the same parties and claims and sought the same relief as the underlying enforcement proceeding.
Navigant contends that the two enforcement proceedings did not seek the same relief because each sought enforcement of a different federal judgment. We agree with Navigant.
Res judicata precludes relitigation of claims that have been finally adjudicated or that arise out of the same subject matter and could have been litigated in the prior proceeding. Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex. 1996). To show that a cause of action is barred by res judicata, the proponent of the defense must establish identity of parties, issues, subject matter, relief sought, and cause of action. See Goodier v. Duncan, 651 S.W.2d 25, 27 (Tex. App.-Dallas 1983, writ ref'd n.r.e.). Whether res judicata applies in a particular case is a mixed question of law and fact. In re P.D.D., 256 S.W.3d 834, 842 (Tex. App.-Texarkana 2008, no pet.).
In this case, the following facts are undisputed: the earlier enforcement proceeding was based on the original federal judgment; the federal judgment was amended after the state court had denied relief in the earlier enforcement proceeding; the federal court amended the original judgment because it "contained manifest errors of law"; the amended federal judgment corrected those errors of law; and the amended federal judgment changed the relief awarded to Navigant against Taulman. When a judgment is amended to correct judicial errors, the amended judgment supersedes the original judgment and becomes a new judgment. See Ebert v. Blackmax Downhole Tools, Inc. (In re Gibralter Res. Inc.), 197 B.R. 246, 250 (Bankr. N.D. Tex.), aff'd, 202 B.R. 586 (N.D. Tex. 1996); see also Daniels v. Comm'n for Lawyer Discipline, 142 S.W.3d 565, 572-73 (Tex. App.-Texarkana 2004, no pet.); Wilmer-Hutchins Indep. Sch. Dist. v. Blackwell, 529 S.W.2d 575, 577 (Tex. Civ. App.-Dallas 1975, writ dism'd). Because the amended federal judgment modified the relief awarded to Navigant against Taulman and because the amended federal judgment had not been rendered at the time the state court denied relief in the earlier enforcement proceeding, we conclude that Taulman did not offer prima facie proof that the two enforcement proceedings sought the same relief or that the amended federal judgment could have been litigated in the earlier enforcement proceeding. See Besing v. Vanden Eykel, 878 S.W.2d 182, 184 (Tex. App.-Dallas 1994, writ denied) (stating res judicata will not bar later action if change in material facts has occurred, and first judgment cannot affect substantive rights that did not exist during first suit); Goodier, 651 S.W.2d at 27. We further conclude that the trial court abused its discretion if its preliminary ruling was based on this defense.
In summary, because Taulman did not present prima facie proof of a meritorious defense, we conclude that the trial court abused its discretion by ruling that the bill of review proceeding should proceed. See Goldsmith, 582 S.W.2d at 409. We resolve issue one in Navigant's favor and do not need to reach issue two.
Conclusion
We vacate the final judgment, reverse the trial court's August 17, 2009 order granting Taulman's bill of review, render judgment dismissing Taulman's bill of review, and reinstate the underlying state judgment in favor of Navigant.
ELIZABETH LANG-MIERS
JUSTICE
100775F.P05