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Sanchez v. R.S. Concrete, L.L.C.

Court of Appeals of Texas, First District

February 27, 2018

HECTOR SANCHEZ, INDIVIDUALLY, AND CUAUHTEMOC CONSTRUCTION, Appellants
v.
R.S. CONCRETE, L.L.C., D/B/A R&S CONCRETE, L.L.C., Appellee

         On Appeal from County Court at Law No. 2 Harris County, Texas Trial Court Case No. 1087751

          Panel consists of Chief Justice Radack and Justices Higley and Bland.

          MEMORANDUM OPINION

          Sherry Radack Chief Justice

         Appellants, Hector Sanchez, individually, and Cuauhtemoc Construction[1](collectively, "Sanchez"), appeal the trial court's judgment denying his petition for a bill of review to set aside a default judgment rendered against him and in favor of appellee, R.S. Concrete, L.L.C., doing business as R&S Concrete, L.L.C. ("R&S"). In five issues, Sanchez contends that the trial court erred in denying his petition for a bill of review because he was not served with process in the underlying lawsuit, the bill-of-review limitations period was tolled by extrinsic fraud, and he was not afforded notice of the hearing on the motion for default, a hearing on his bill of review, or due process.

         We affirm.

         Background

         This suit arises from a construction project that concluded in December 2007. In its original petition, R&S alleged that it supplied concrete and other materials for the project pursuant its contract with Sanchez, doing business as Cuauhtemoc, a sole proprietorship, and a personal guaranty by Sanchez. After R&S fulfilled its obligations under the contract, however, Sanchez refused, despite demand, to pay the balance of $18, 224.97 outstanding on the account.

         In January 2009, R&S sued Sanchez for breach of contract, sworn account, quantum meruit, and violations of the Prompt Payment Act and Texas Construction Trust Fund Act.[2] After R&S was not successful in effectuating service of process on Sanchez, R&S moved for substituted service.[3]

         In its motion for substituted service, R&S asserted that its attempts to effectuate service of process on Sanchez were not successful and that reasonably effective notice could be given to him by service at his usual place of residence, located at 7112 Amarillo Street, Houston, Texas, by leaving a copy with anyone over the age of 16 living at the residence or by posting it at the front gate or front door of the residence. To support its motion, R&S attached the affidavit of a private process server, Carl Schultheis, Jr., who testified that he had attempted, at various times on January 10, 13, 15, 17, 19, and 21, 2009, to personally serve Sanchez at his usual place of residence: 7112 Amarillo Street, Houston. The process server gave specific facts about his visits to Sanchez's house and his contact with Sanchez's wife and daughter. The daughter confirmed that Sanchez lived at that address. The process server noted that, although, on three occasions, he saw numerous trucks in the driveway, the daughter said that Sanchez was at work and that she did not know when he would return.

         On February 6, 2009, the trial court granted R&S's motion for substituted service, ordering that service be made on Sanchez by leaving a copy with anyone over the age of 16 living at the residence or "by posting at the front gate or front door of the residence." The trial court also ordered that process be mailed, by regular and certified mail, to Sanchez at the same address.

         On February 27, 2009, the process server filed a verified return of service and affidavit, stating that, at 11:00 a.m. on February 21, 2009, he served Sanchez "by POSTING per Order by securely affixing to the main entry way" at 7112 Amarillo Street, Houston, Texas. Also on February 21, 2009, the process server sent to Sanchez, by regular and certified mail, return receipt requested, a copy of the citation and original petition. To his return, he appended the certified mail receipts.

         On March 24, 2009, after Sanchez did not appear or answer, R&S moved for entry of a default judgment against him. R&S appended copies of the credit application that Sanchez executed on behalf of Cuauhtemoc; Sanchez's personal guaranty; its unpaid invoice; and the affidavit of Dolores Hernandez, an account manager for R&S. R&S also appended certificates of last known address and an affidavit of counsel in support of attorney's fees.

         On March 31, 2009, the trial court, after finding that Sanchez was duly cited, the return had been on file for more than ten days, and Sanchez had not answered or appeared, granted R&S a default judgment on its claims. The trial court awarded to R&S, and against Sanchez, actual damages in the amount of $18, 224.97, attorney's fees of $2, 245.25, interest, and costs. Also on March 31, 2009, the Harris County clerk sent notice of the default judgment to Sanchez at 7112 Amarillo Street, Houston, Texas.

         On October 17, 2016, a writ of execution issued. On January 3, 2017, Sanchez's real property, located at 947 Gazin Street, Houston, Texas, was sold at a constable's sale.

         On January 10, 2017, Sanchez filed a petition for a bill of review. He asserted that, although the four-year limitations period governing petitions for bill of review had expired, he was prevented by R&S's "extrinsic fraud" from filing his petition earlier. Specifically, R&S had "failed to serve [him] in person, " despite that it had communicated with him in the past and could have "easily located" him. He asserted that his "address is 7112 Amarillo Street, Houston, Texas, 77020." Although, "[o]n February 21, 2009, service by certified mail was attempted" on him, "pursuant to an order by the trial court authorizing such service, " he had "no recollection" of having been served.

         Sanchez also asserted that he was prevented from filing his petition earlier by R&S's "extrinsic fraud, " in that R&S had made "false promises of compromise." In December 2007, he purchased concrete and materials from R&S to fulfill his contract with a third party, "Ritmo Latino, "[4] pursuant to which Sanchez had agreed to provide concrete services, in the amount of $265, 000.00, on a construction project. He asserted that, for a "few months, " he paid R&S. However, after Ritmo stopped paying him, he was unable to pay R&S. Sanchez asserted that, on July 31, 2008, he met with R&S, and its counsel, and showed them his unpaid invoices. He asserted that they "agreed" that he was "not at fault for the unpaid materials" and that Ritmo "was liable, " and R&S "told him that [it] would not sue" him. Sanchez stated that he "understood" that R&S "would not pursue litigation against him" and "understood that the matter had been settled." He asserted that the parties had memorialized their agreement and that he had appended a copy of their agreement to his petition.

         Sanchez further argued that he was deprived of due process because R&S had failed to provide timely notice of the hearing on its motion for default.

         To his petition, Sanchez attached a copy of the default judgment; R&S's motion for substituted service; the process server's affidavit, detailing his attempts to personally serve Sanchez at 7112 Amarillo Street, Houston; the trial court's order authorizing substituted service; a December 10, 2007 "Letter of Agreement" between Ritmo and Sanchez, on behalf of Cuauhtemoc, agreeing to provide concrete services to Ritmo for the construction project; a July 31, 2008 letter by Sanchez to R&S, acknowledging receipt of its demand for payment and asserting that it had "issued check# on [sic] for payment of those deliveries"; and a "Deed of Trust, " filed on January 23, 2008, securing a loan to Sanchez, at "7112 Amarillo, Houston, TX."

         R&S answered, generally denying the allegations and asserting, inter alia, that Sanchez's suit for bill of review was barred by limitations. R&S also filed objections to Sanchez's petition for a bill of review, asserting that it had served him with process in the underlying lawsuit in accordance with the trial court's order authorizing substituted service[5] and that Sanchez had failed to plead and prove that he was prevented from making an appearance due to fraud by R&S.

         The trial court denied Sanchez's petition for bill of review.

         Bill of Review

         In reviewing the denial of a bill of review, every presumption is indulged in favor of the trial court's ruling, which will not be disturbed unless it is affirmatively shown that there was an abuse of discretion. Xiaodong Li v. DDX Grp. Inv., LLC, 404 S.W.3d 58, 62 (Tex. App.-Houston [1st Dist.] 2013, no pet.). A bill of review is a separate, independent suit brought by a party to a former action who is seeking to set aside a final judgment that is no longer subject to a motion for new trial or appealable. Caldwell v. Barnes, 154 S.W.3d 93, 96 (Tex. 2004); Wolfe v. Grant Prideco, Inc., 53 S.W.3d 771, 773 (Tex. App.-Houston [1st Dist.] 2001, pet. denied); see Tex. R. Civ. P. 329b(f). It is an equitable remedy available only when a party has "demonstrated due diligence and can show, through no ...


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