In 1982, a default judgment was entered against appellant in
appellee medical center's Texas state court suit to recover a sum
allegedly due under appellant's guarantee of a hospital debt
incurred by one of his employees. The judgment was recorded, a writ
of attachment was issued, and appellant's real property was sold to
satisfy the judgment. In 1984, appellant initiated a bill of review
proceeding seeking,
inter alia, to set aside the default
judgment and void the sale, and alleging that, since the original
service of process itself showed it was untimely made and, in fact,
he had never been personally served, the judgment was void under
Texas law. The court entered summary judgment for appellee on the
ground that it must be shown in a bill of review proceeding that
the complainant had a meritorious defense to the action in which
the judgment was entered, which appellant conceded he did not have.
In affirming, the State Court of Appeals rejected appellant's
contention that the meritorious defense requirement violated his
due process rights under the Fourteenth Amendment to the Federal
Constitution, declaring that the requirement was "not onerous." The
State Supreme Court denied appellant's application for a writ of
error, noting "No Reversible Error."
Held: The holding below contravenes this Court's
precedents, under which a judgment entered without notice or
service violates the Due Process Clause.
See, e.g., Mullane v.
Central Hanover Bank & Trust Co., 339 U.
S. 306;
Armstrong v. Manzo, 380 U.
S. 545. The argument that appellant suffered no harm
from the default judgment, since the same judgment would again be
entered on retrial absent a meritorious defense, is untenable
because, had he had notice of the suit, appellant might have
impleaded the employee whose debt had been guaranteed, worked out a
settlement, paid the debt, or sold the property himself rather than
suffer its sale at a constable's auction for allegedly much less
than its true value. Nor is there any doubt that the entry of the
judgment itself had substantial adverse consequences, since the
judgment was entered on county records, became a lien on
appellant's property which impaired his ability to mortgage or
alienate the property, and was the basis for issuance of the writ
of execution under which the property was promptly sold, again
without notice. The contention that appellant has other
Page 485 U. S. 81
remedies to escape the consequences of an invalid judgment, and
should be left to pursue those avenues, will not be considered
here, since there is no indication that it was raised below. Pp.
485 U. S.
84-87.
Reversed.
WHITE, J., delivered the opinion of the Court, in which all
other Members joined, except KENNEDY, J., who took no part in the
consideration or decision of the case.
JUSTICE WHITE delivered the opinion of the Court.
Heights Medical Center, Inc. (hereafter appellee), sued
appellant Peralta in February, 1982, to recover some $5,600
allegedly due under appellant's guarantee of a hospital debt
incurred by one of his employees. Citation issued, the return
showing personal, but untimely, service. Appellant did not appear
or answer, and on July 20, 1982, default judgment was entered for
the amount claimed, plus attorney's fees and costs.
In June, 1984, appellant began a bill of review proceeding in
the Texas courts to set aside the default judgment and obtain other
relief. [
Footnote 1] In the
second amended petition, it was alleged
Page 485 U. S. 82
that the return of service itself showed a defective service,
[
Footnote 2] and that appellant
in fact had not been personally served at all. The judgment was
therefore void under Texas law. It was also alleged that the
judgment was abstracted and recorded in the county real property
records, thereby creating a cloud on appellant's title, that a writ
of attachment was issued, and that, unbeknownst to him, his real
property was sold to satisfy the judgment, and for much less than
its true value. Appellant prayed that the default judgment be
vacated, the abstract of judgment be expunged from the county real
property records, the constable's sale be voided, and that judgment
for damages be entered against the Medical Center and Mr. and Mrs.
Paul Seng-Ngan Chen, the purchasers at the constable's sale and
appellees here.
Appellee filed a motion for summary judgment asserting that, in
a bill of review proceeding such as appellant filed, it must be
shown that petitioner had a meritorious defense to the action in
which judgment had been entered, that petitioner was prevented from
proving his defense by the fraud, accident, or wrongful act of the
opposing party, and that there had been no fault or negligence on
petitioner's part. Although it was assumed for the purposes of
summary judgment that there had been defective service and that
this lapse excused proof of the second and third requirement for
obtaining a bill of review, it was assertedly necessary,
nevertheless, to show a meritorious defense, which appellant had
conceded
Page 485 U. S. 83
he did not have. In response to the motion, appellant repeated
the allegations in his petition and filed an affidavit denying that
he had ever been personally served or had ever been notified of the
entry of default judgment [
Footnote
3] or of the sale of his property. Appellee's motion for
summary judgment was granted. Record 54.
Appellant's motion for rehearing for the first time asserted
federal constitutional claims under the Fourteenth Amendment.
Appellee answered that, under Texas law, there were three avenues
by which to attack a judgment on the grounds that it was void for
want of service: an appeal within 30 days of the judgment; by writ
of error within 6 months; and by bill of review. It being too late
to seek either of the first two courses, appellee urged that the
bill of review was the only route then open to appellant, and that
route was not available to him -- even assuming he did not receive
notice of the action filed against him -- since he had no
meritorious defense. Appellee denied that the meritorious defense
requirement threatened any federal constitutional rights. Rehearing
was denied.
On appeal to the Texas Court of Appeals, appellant repeated his
claims that, in the absence of valid service of process and notice
of the judgment, showing a meritorious defense was not necessary
under Texas law, and requiring it violated the Fourteenth
Amendment. Appellee argued that, despite the allegation of no
service and no notice of judgment, the meritorious defense
requirement prevented relief, and that, even though the bill of
review was the only avenue of relief, the State could
constitutionally insist on the showing of a meritorious defense.
The Court of Appeals affirmed, reciting the three elements
essential for granting a bill of review and holding that a
meritorious defense must be shown
Page 485 U. S. 84
whether there had been proper service and notice or not. 715
S.W.2d 721 (1986). The court rejected the due process challenge
because it viewed the meritorious defense requirement as "not
onerous."
Id. at 722. Rehearing was denied, as was the
application for a writ of error filed with the Texas Supreme Court,
that court noting, "No Reversible Error." App. to Juris. Statement
2a.
Because the holding below appeared problematic in light of our
precedents, we noted probable jurisdiction. 481 U.S. 1067 (1987).
The case was briefed and argued, and we now reverse. [
Footnote 4]
In opposition to summary judgment, appellant denied that he had
been personally served and that he had notice of the judgment. The
case proceeded through the Texas courts on that basis, [
Footnote 5] and it is not denied by
appellee that under our cases, a judgment entered without notice or
service is constitutionally infirm.
"An elementary and fundamental requirement of due process in any
proceeding which is to be accorded finality is notice reasonably
calculated, under the circumstances, to apprise interested parties
of the pendency of the action and afford them the opportunity to
present their objections."
Mullane v. Central Hanover Bank & Trust Co.,
339 U. S. 306,
339 U. S. 314
(1950). Failure to give notice violates "the most rudimentary
demands of due process of law."
Armstrong v. Manzo,
380 U. S. 545,
380 U. S. 550
(1965).
See also
Page 485 U. S. 85
World-Wide Volkswagen Corp. v. Woodson, 444 U.
S. 286,
444 U. S. 291
(1980);
Mathews v. Eldridge, 424 U.
S. 319,
424 U. S. 333
(1976);
Zenith Radio Corp. v. Hazeltine Research, Inc.,
395 U. S. 100, 110
(1969);
Pennoyer v. Neff, 95 U. S.
714,
95 U. S. 733
(1878).
The Texas courts nevertheless held, as appellee urged them to
do, that, to have the judgment set aside, appellant was required to
show that he had a meritorious defense, apparently on the ground
that, without a defense, the same judgment would again be entered
on retrial, and hence appellant had suffered no harm from the
judgment entered without notice. But this reasoning is untenable.
As appellant asserts, had he had notice of the suit, he might have
impleaded the employee whose debt had been guaranteed, worked out a
settlement, or paid the debt. He would also have preferred to sell
his property himself in order to raise funds, rather than to suffer
it sold at a constable's auction.
Nor is there any doubt that the entry of the judgment itself had
serious consequences. It is not denied that the judgment was
entered on the county records, became a lien on appellant's
property, [
Footnote 6] and was
the basis for issuance of a writ of execution under which
appellant's property was promptly sold without notice. Even if no
execution sale had yet occurred, the lien encumbered the property
and impaired appellant's ability to mortgage or alienate it; and
state procedures for creating and enforcing such liens are subject
to the strictures of due process.
See Mitchell v. W. T. Grant
Co., 416 U. S. 600,
416 U. S. 604
(1974);
Hodge v. Muscatine
County, 196
Page 485 U. S. 86
U.S. 276,
196 U. S. 281
(1905). Here, we assume that the judgment against him and the
ensuing consequences occurred without notice to appellant, notice
at a meaningful time and in a meaningful manner that would have
given him an opportunity to be heard.
Armstrong v. Manzo,
supra, at
380 U. S.
552.
In this Court, appellee insists that appellant has other
remedies to escape the consequences of an invalid judgment, and
should be left to pursue those avenues. This argument, which is
made for the first time in this litigation and which appellant
disputes, is apparently offered as an alternative ground for
affirming the judgment below. We are not required, however, to
entertain such submissions, particularly when there is no
indication that they were raised below, and we are especially
disinclined to become involved in resolving disputes about Texas
law that should have been presented to the state courts. We shall
deal with the case as it came here and affirm or reverse based on
the ground relied on below.
Appellee's position below was that appellant either had a remedy
by bill of review or not at all, and that that remedy was
unavailable, since no meritorious defense had been shown. It
appears to us that the Texas courts decided the case on this basis.
There was no mention of other remedies, no suggestion that
appellant had sought the wrong remedy; and it seems obvious that,
had a meritorious defense been shown and the allegations on service
and notice found to be true, the offending judgment would have been
vacated. The Texas court held that the default judgment must stand
absent a showing of a meritorious defense to the action in which
judgment was entered without proper notice to appellant, a judgment
that had substantial adverse consequences to appellant. By reason
of the Due Process Clause of the Fourteenth Amendment, that holding
is plainly infirm.
Where a person has been deprived of property in a manner
contrary to the most basic tenets of due process, "it is no answer
to say that in his particular case due process of law would have
led to the same result because he had no adequate
Page 485 U. S. 87
defense upon the merits."
Coe v. Armour Fertilizer
Works, 237 U. S. 413,
237 U. S. 424
(1915). As we observed in
Armstrong v. Manzo, 380 U.S. at
380 U. S. 552,
only
"wip[ing] the slate clean . . . would have restored the
petitioner to the position he would have occupied had due process
of law been accorded to him in the first place."
The Due Process Clause demands no less in this case.
The judgment below is
Reversed.
JUSTICE KENNEDY took no part in the consideration or decision of
this case.
[
Footnote 1]
Texas Rule of Civil Procedure 329b(f) provides:
"On expiration of the time within which the trial court has
plenary power, a judgment cannot be set aside by the trial court
except by bill of review for sufficient cause, filed within the
time allowed by law; provided that the court may at any time
correct a clerical error in the record of a judgment and render
judgment nunc pro tunc under Rule 316, and may also sign an order
declaring a previous judgment or order to be void because signed
after the court's plenary power had expired."
[
Footnote 2]
The petition alleged that the record contained a return of
service of process, showing that service was effected more than 90
days after its issuance, contrary to Texas Rule of Civil Procedure
101 (repealed effective Jan. 1, 1988). Record 41. The parties agree
that, under Texas law at the time of this suit, the citation lost
its official status after 90 days. Texas courts have held that
service after the 90th day is a nullity, depriving the court of
personal jurisdiction over the defendant.
Lewis v. Lewis,
667 S.W.2d 910, 911 (Tex.App.1984);
Kem v. Krueger, 626
S.W.2d 143, 144 (Tex.App.1981);
Lemothe v. Cimbalista, 236
S.W.2d 681, 682 (Tex.Civ.App.1951).
[
Footnote 3]
Texas Rule of Civil Procedure 239(a) requires that notice of
default judgment be mailed to the defendant at the address which
the party taking the judgment is required to file with the clerk.
Appellant argued in the Court of Appeals that neither of these
requirements had been fulfilled.
[
Footnote 4]
Further examination of the record indicates that appellee was
correct in challenging our appellate jurisdiction, Motion to
Dismiss 3-4, because there was no explicit challenge to the
constitutionality of Texas Rule of Civil Procedure 329b(f) and
because the Texas courts did not pass on any such issue.
Charleston Federal Savings & Loan Assn. v. Alderson,
324 U. S. 182,
324 U. S. 185
(1945);
Richmond Newspapers, Inc. v. Virginia,
448 U. S. 555,
448 U. S. 562,
n. 4 (1980). Treating the filed papers as a petition for
certiorari, however, we grant the petition. We nevertheless
continue to refer to Peralta and Heights Medical Center as
appellant and appellee.
[
Footnote 5]
Appellee conceded at oral argument that, for purposes of this
decision, we must assume the truth of appellant's claims that he
was never served with process. Tr. of Oral Arg. 39.
[
Footnote 6]
Under Texas law, a judgment entitles the judgment creditor to a
lien on the debtor's property. As a matter of right and without
notice and hearing, a judgment creditor can have the judgment
abstracted and recorded. Tex.Prop.Code Ann. §§ 52.002,
52.004(a) (1984 and Supp.1988). Such a recorded abstract
"constitutes a lien on the real property of the defendant
located in the county in which the abstract is recorded and
indexed, including real property acquired after such recording and
indexing,"
§ 52.001, and the holder of a judgment lien will have a
superior interest to a later purchaser.
Masterson v.
Adams, 197 S.W.2d 154, 156 (Tex.Civ.App.1946).
