Court of Appeals of Texas, Fourth District, San Antonio
Sitting: Sandee Bryan Marion, Chief Justice Rebeca C.
Martinez, Justice Patricia O. Alvarez, Justice
Bryan Marion, Chief Justice.
Texas Real Estate Commission ("TREC") seeks
mandamus relief from the trial court's order granting
real party in interest Evan Jacobson's bill of review and
setting aside a default judgment against him. Based on the
reasons set forth below, we conditionally grant TREC's
2012, Dr. Ben Luong sued Evan Jacobson, a licensed real
estate agent, both individually and d/b/a Advantage Realty
Group for breach of a joint venture agreement to acquire,
renovate, and sell residences for a profit. Luong claimed
that Jacobson intentionally misrepresented the amounts of
invoices for materials and supplies used in the remodeling
and commingled joint venture money with his own funds. Luong
also pled that Jacobson had violated the Texas Real Estate
Licensing Act, and sought recovery of his actual damages from
the Real Estate Recovery Trust Account. See Tex.
Occ. Code Ann. §§ 1101.601-.602 (West 2012 &
Supp. 2016). Jacobson retained an attorney and filed an
answer. Jacobson's counsel subsequently withdrew on June
13, 2013, and Jacobson proceeded pro se in the case.
On July 1, 2013, Luong's attorney filed a motion to set
the case for a non-jury trial on July 31, 2013. On July 15,
2013, Jacobson filed an "Original Answer to Motion to
Set on Non-Jury Docket" objecting to the trial setting
because: (i) he did not receive proper notice of the setting;
and (ii) he was scheduled to be out of town from July 25 to
August 6, 2013.
31, 2013, Luong and his attorney appeared for trial, but
Jacobson did not appear. Prior to permitting Luong's
attorney to present evidence of damages, the trial court made
several inquiries into whether Jacobson had been given the
required notice of the trial setting. Luong's attorney
represented to the court that he sent a letter with notice of
the trial setting to Jacobson at his last known address by
both certified mail and regular mail. The trial court noted
that Jacobson had filed an objection to the setting, but the
court treated it as a motion for continuance and overruled
it. The trial court expressly stated it was relying on
"the representation [by Luong's counsel] to the
Court that you have given proper notice to the Defendant of
today's hearing, " and proceeded to enter a
post-answer default judgment against Jacobson. The judgment
awarded Luong actual damages of $45, 587.25 for
fraud/misrepresentation, breach of contract, and violations
of the Texas Real Estate Licensing Act, and $7, 268.48 in
attorney's fees. Luong also received treble damages of
$136, 761.75 under the Deceptive Trade Practices Act.
did not file a motion for new trial or a notice of appeal.
Luong sought to collect the actual damages portion of the
judgment from the Real Estate Recovery Trust Account.
See Tex. Occ. Code Ann. §§ 1101.601-.602.
After a hearing on May 12, 2014, the trial court found that
the $45, 587.25 in actual damages and the $7, 268.48 in
attorney's fees awarded to Luong were payable out of the
Real Estate Recovery Trust Account, and ordered TREC to pay
Luong the sum of $50, 000. The court also ordered Luong to
assign to TREC "all of his right, title and interest in
the judgment, to the extent of payment." TREC and Luong
negotiated a settlement and TREC paid Luong $41, 200.00 in
exchange for the transfer and assignment of Luong's
rights and interest in the judgment.
2016, Jacobson filed an original petition for bill of review
seeking to set aside the July 31, 2013 default judgment and
to enjoin its enforcement and collection. In his petition,
Jacobson asserted he did not receive the required forty-five
days' notice of the trial setting and Luong's
attorney misrepresented to the trial court that Jacobson had
received the required notice. Jacobson also asserted he was
deprived of the ability to file a timely motion for new trial
by the district clerk's official mistakes in (i) failing
to promptly notify him that a default judgment had been
entered against him by sending the notice more than thirty
days after entry of the judgment, and (ii) erroneously
informing him on the day he received actual notice of the
judgment that "there was nothing he could do to change
or modify the judgment" because thirty days had already
passed. Jacobson also pled that he had a meritorious defense
to Luong's claims in the underlying lawsuit based on his
records containing invoices, expenses, bills, and charges for
the supplies and repairs relating to the two joint venture
intervened in the bill of review proceeding, arguing that
Jacobson was not entitled to bill of review relief and TREC
would be injured if the default judgment was set aside
because it already paid a portion of the judgment to Luong.
The trial court held an evidentiary hearing on the bill of
review on March 6, 2017. Jacobson and Luong testified, as did
Henry J. Novak, Jacobson's former trial attorney in the
underlying lawsuit. On March 15, 2017, the trial court signed
a general order granting the bill of review and setting aside
the default judgment. TREC then filed this petition for writ
of mandamus, asking this court to order the trial court to
vacate its order and reinstate the July 31, 2013 judgment.
relief is appropriate only to correct a clear abuse of
discretion by the trial court when there is no adequate
remedy by appeal. In re Prudential Ins. Co. of Am.,
148 S.W.3d 124, 135-36 (Tex. 2004) (orig. proceeding). A
trial court has no discretion in determining what the law is
or applying the law to the facts. Walker v. Packer,
827 S.W.2d 833, 840 (Tex. 1992) (orig. proceeding). "[A]
clear failure by the trial court to analyze or apply the law
correctly will constitute an abuse of discretion."
Id. We have previously recognized that mandamus is
the appropriate remedy for a bill of review that was
erroneously granted based on the lack of an adequate remedy
by appeal. In re J.M., IV, 373 S.W.3d 725, 728 (Tex.
App.-San Antonio 2012, orig. proceeding).
General Bill of Review Standard
of review is an equitable proceeding through which a party
seeks to set aside a judgment that may no longer be
challenged by a motion for new trial or an appeal.
Barnes, 154 S.W.3d 93, 96 (Tex. 2004). Due to the
public interest in the finality of judgments, the grounds for
obtaining a bill of review are narrow. In re J.M.,
373 S.W.3d at 728. A bill of review petitioner must generally
plead and prove (1) a meritorious defense to the underlying
cause of action, (2) which the petitioner was prevented from
making by the fraud, accident or wrongful act of the opposing
party, or by official mistake, (3) unmixed with any fault or
negligence on the petitioner's part. Caldwell,
154 S.W.3d at 96; In re J.M., 373 S.W.3d at 728-29.
mandamus petition, TREC argues that Jacobson failed to prove
the second and third prongs of this general bill of review
standard. Among other arguments, TREC argues
Jacobson failed to prove his own lack of fault or negligence
because he admitted receiving actual knowledge of the default
judgment on or about September 5, 2013 and could have still
filed a motion for new trial under the extended timeline
provided by Rule 306a, but failed to pursue that legal
remedy. See Tex. R. Civ. P. 306a(4) (providing that
when a party adversely affected by a judgment does not
receive notice or acquire actual knowledge of the judgment
within twenty days after the judgment is signed, then the
thirty-day period for filing a motion for new trial is
extended and begins on the date notice is received or actual
knowledge is acquired, as long as no more than ninety days
have passed since the judgment was signed). Jacobson responds
to this argument by asserting he was prevented from timely
filing a motion for new trial based on the misinformation
provided to him by the clerk's office, and relies on this
court's opinion in In re RPH Capital Partners,
LP, No. 04-16-00424-CV, 2017 WL 2561562, at *2 (Tex.