United States District Court, S.D. Texas, Houston Division
ORDER AND OPINION
MELINDA HARMON UNITED STATES DISTRICT JUDGE
the Court are Plaintiffs' Motion to Alter or Amend the
Dismissal Order (Document No. 22) and Defendant's
Response to Plaintiffs' Motion (Document No. 25). After
considering the motion, response, and the applicable law, the
Court concludes that Plaintiffs' motion is GRANTED. The
Court's July 27, 2017 order and opinion (Document No. 21)
is withdrawn and this opinion is substituted in its place.
After further considering Defendant's Motions to Dismiss,
the Court concludes that Defendant's Motion to Dismiss
Pursuant to Federal Rule of Civil Procedure 12(b)(6)
(Document No. 14) is DENIED. Further, the Court concludes
that Defendant's Motion to Dismiss for Lack of
Jurisdiction (Document No. 6) is GRANTED.
Tu Nguyen and Chau Ho Huynh filed the current action in the
333rd Judicial District Court of Harris County, Texas, on
October 25, 2013. Plaintiffs allege that Defendant Bank of
America's lien on their home is fraudulent and should not
be accorded lien status. After Defendant did not respond to
Plaintiffs' pleadings in state court, the court issued a
default judgment against Defendant. Defendant removed the
case to this Court on May 31, 2016 and filed a motion to
vacate the default judgment arguing that service was never
obtained. Document No. 4. This Court agreed and vacated the
default judgment. Document No. 12. Defendant then filed two
motions to dismiss. Document Nos. 6 & 14. Plaintiffs
never responded to the motions to dismiss.
reviewing the motions and the applicable law, the Court
concluded that the motions should be granted and dismissed
the case with prejudice. Document No. 21. In the Court's
opinion, the Court found that the case was barred by res
judicata. Document No. 21 at 4. Plaintiffs now file their
motion to alter or amend the Court's order. Document No.
motion for reconsideration “calls into question the
correctness of a judgment.” In re Transtexas Gas
Corp., 303 F.3d 571, 581 (5th Cir. 2002). “[S]uch
a motion is not the proper vehicle for rehashing evidence,
legal theories, or arguments that could have been offered or
raised before the entry of judgment.” Templet v.
Hydro Chem, Inc., 367 F.3d 473, 479 (5th Cir. 2004)
(citing Simon v. United States, 891 F.2d 1154, 1159
(5th Cir. 1990)). Rather, it merely serves to allow “a
party ‘to correct manifest errors of law or fact or to
present newly discovered evidence.'” Waltman v.
Int'l Paper Co., 875 F.2d 468, 473 (5th Cir. 1989)
(quoting Keene Corp. v. Int'l Fidelity Ins. Co.,
561 F.Supp. 656, 665 (N.D. Ill. 1982)). A motion for
reconsideration may also be used to bring an intervening
change in the controlling law to the court's attention.
Schiller v. Physicians Res. Grp., Inc., 342 F.3d
563, 567-68 (5th Cir. 2003) (citing In re Benjamin Moore
& Co., 318 F.3d 626, 629 (5th Cir. 2002)).
Nevertheless, “[r]econsideration of a judgment after
its entry is an extraordinary remedy that should be used
sparingly.” Templet, 367 F.3d at 479 (citing
Clancy v. Employers Health Ins. Co., 101 F.Supp.2d
463, 465 (E.D. La. 2000)).
Plaintiffs argue that they were denied their due process
rights because they did not receive notice of the motions to
dismiss. Document No. 22 at 2-3. The Fifth Circuit, however,
is clear in what is required to serve adequate notice under
Federal Rule of Civil Procedure 5. “[S]ervice by mail
‘is complete upon mailing.'” Daniels v.
JP Morgan Chase Bank, 574 F. App'x 337, 338 (5th
Cir. 2014) (per curiam) (quoting Fed.R.Civ.P. 5(b)(2)(C));
see also LaBlanche v. Ahmad, 538 F. App'x 463,
464 (5th Cir. 2013) (per curiam) (“Under Federal Rule
of Civil Procedure 5(b)(2)(C), a party properly serves a
motion on its opponent by ‘mailing it to the
person's last known address-in which event service is
complete upon mailing.'” (quoting Fed.R.Civ.P.
5(b)(2)(C))); Anthony v. Marion Cty. Gen. Hosp., 617
F.2d 1164, 1168 n.5 (5th Cir. 1980) (noting that the Federal
Rules provide “that service is complete upon mailing.
Moreover, refusal to accept mail does not vitiate
service”). The affidavit included with Plaintiffs'
motion shows that the notice was mailed, which is all that is
required under the Federal Rules. Therefore, Plaintiffs'
due process argument fails.
Motions to Dismiss
further argue that the Court's order dismissing the case
should be amended because several of the federal court cases
relied upon by the Court when determining that the case was
barred by res judicata actually involved a different property
than the one at issue here. Document No. 22 at 3-4. Defendant
acknowledges that three of the federal court cases relied
upon by this Court involve a different property and withdraws
its arguments concerning those cases. Document No. 25 at 2.
In light of this revelation, the Court withdraws its earlier
opinion, and issues a new one. Further, because
Defendant's Motion to Dismiss Pursuant to Federal Rule of
Civil Procedure 12(b)(6) (Document No. 14) rests solely on
its arguments that the federal court cases bar review of the
current case under res judicata, that motion must be denied.
to Defendant's Motion to Dismiss for Lack of Jurisdiction
(Document No. 6), Defendant argues that this case should be
dismissed because the claims at issue here were decided by
the state courts. Document No. 6 at 1. After this case was
removed to this Court, Defendant filed a bill of review in
the state court, asking the state court to review its
decision to grant a default judgment. Document No. 10-1 at 3.
The state court granted Defendant's bill of review and
then granted its motion for summary judgment on the merits,
vacating its earlier judicial finding that the lien was
fraudulent and sanctioning Plaintiffs for fraudulently
misleading the court. Document No. 6-1 at 2. Plaintiffs then
appealed to the Court of Appeals for the First District of
Texas. Document No. 10-1. The First Court of Appeals affirmed
the state court's order.
federal court, asked to give res judicata effect to a state
court judgment, must apply the res judicata principles of the
law of the state whose decision is set up as a bar to further
litigation.” Hernandez v. City of Lafayette,
699 F.2d 734, 736 (5th Cir. 1983) (citing ED Sys. Corp.
v. Sw. Bell Tel. Co., 674 F.2d 453, 457 (5th Cir.
1982)). Because the state court action was rendered by a
Texas state court, this Court applies Texas res judicata law.
See Jones v. Sheehan, Young & Culp, P.C., 82
F.3d 1334, 1338 (5th Cir. 1996). “In Texas,
‘[r]es judicata, or claims preclusion, prevents the
relitigation of a claim or cause of action that has been
finally adjudicated, as well as related matters that, with
the use of diligence, should have been litigated in the prior
suit.'” Id. (quoting Barr v.
Resolution Trust Corp., 837 S.W.2d 627, 628 (Tex.
1992)). The party advocating for res judicata must show
“(1) a ...