Litigation between two parties about the ownership of a valuable Ferrari ended with a final judgment that awarded clean title to the car–except, lienholder Truist Bank was not joined as a party. Truist filed a bill of review; as the Fifth Court explained: “Ordinarily, a bill of review involves an independent action by a party to the former case. A nonparty, however, has standing to bring a bill of review if it had a then-existing legal right or interest that was prejudiced by the prior judgment.” The Court went on to reverse and render judgment for Truist on its bill, observing:

“Truist Bank asserted a meritorious defense based upon its unreleased priority lien, its possession of the original title to the Ferrari, and its challenge to Loyola’s right to relief in [another related] lawsuit. On this record, we are not persuaded by Loyola’s 2.403 Business and Commerce Code argument that, as a matter of law, he had a right to clear title, and we decline to so determine. … Truist Bank was prevented from establishing or protecting its priority lien rights by Loyola’s wholesale failure to serve, join, or notify Truist Bank in the … suit.”

Truist Bank v. Loyola, No. 05-21-00206-CV

“The Supreme Court of Texas recently determined that section 17.028 of the civil practice and remedies code provides the exclusive means for service of process on a financial institution. Section 17.028 requires service on the institution’s registered agent. The … court held that ‘service on the Secretary [of State] as a foreign corporate fiduciary’s “agent” under [Estates Code] Chapter 505 does not constitute service on a financial institution’s “registered agent” for purposes of section 17.028.'” Bank of New York Mellon v. FFGGP, Inc., No. 05-20-00384-CV (March 11, 2022) (mem. op.) (citations omitted) (applying U.S. Bank, N.A. v. Moss, No. 20-0517 (Tex. Feb. 25, 2022)).

The trial court dismissed a bill of review proceeding for failing to state a claim and the Fifth Court reversed: “Accepting appellant’s allegations as true, together with any inference reasonably drawn therefrom, we conclude the petition alleges a wrongful act by the judge and the opposing party’s attorney that occurred outside of the adversarial proceeding and affects how the judgment was procured. The alleged wrongful act was unmixed with any fault on the part of appellant. We conclude appellant’s allegations are sufficient to meet the second and third elements of a bill of review in the face of a motion to dismiss pursuant to [Tex. R. Civ. P.] 91a.” For similar reasons, the Court concluded that the petition alleged a sufficiently serious deprivation of the movants’ rights. Thomas v. 462 Thomas Family Properties LP, No. 05-16-01161-CV (Aug. 2, 2018).

Appellants filed a bill of review about the dismissal of their case, but could not prove a lack of fault: “Because appellants failed to pursue all adequate legal remedies when they did not appeal the denial of [the] motion to reinstate, appellants could not plead and prove the third element of a bill of review.” McCurdy v. Oeftering, No. 05-14-01353-CV (Feb. 19, 2016) (mem. op.)

A year ago, the Dallas Court of Appeals affirmed the denial of an equitable bill of review in which the defendants claimed that the plaintiff had not exercised reasonable diligence in its attempts to effect service through registered mail and personal delivery. The Texas Supreme Court has now set aside that ruling, holding that the defendants had presented some evidence that their failure to receive notice of the default judgment resulted solely from the plaintiff’s failure to certify the defendants’ last known mailing address, and not from any negligence or fault on the defendants’ own part. The record contained evidence that the plaintiff’s owner had met with the defendants’ registered agent at their current address, rather than the outdated address on file with the Secretary of State, that raised a genuine issue of material fact as to the validity of the plaintiff’s “last known mailing address” certification.

Katy Venture, Ltd. v. Cremona Bistro, LLC, No. 14-0629

The court of appeals has reversed summary judgment for the defendant in a bill of review case.  After 23 years of marriage, the appellant had filed for divorce from her husband.  Their divorce papers purported to waive the parties’ right to investigate assets and financial information.  But the wife later found out that her husband had substantially more assets than she had been led to believe, which in turn led her to seek a bill of review to overturn the couple’s property division, claiming extrinsic fraud in the judgmenmt.  The trial court granted summary judgment in favor of the husband.  The court of appeals disagreed, holding that whether the husband’s alleged misrepresentations of his financial position and attempts to intimidate his wife into foregoing further investigation  presented a fact question for the jury on whether the settlement was procured by extrinsic fraud.  The court also rejected the husband’s estoppel defense, as there was a fact question whether the wife’s prior testimony that the settlement was fair and equitable was based on mistake, fraud, or duress.  Having reversed the summary judgment, the court of appeals remanded the case to the trial court for further proceedings.

In re Stroud, No. 05-00982-CV