Billy Lee Burgin v. the Frost National Bank

• Court: Court of Appeals of Texas
• Decided: May 6, 2010
• Docket: 02-10-00008-CV
• Status: Published

Opinion

COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH

NO. 2-10-008-CV

BILLY LEE BURGIN APPELLANT

V.

THE FROST NATIONAL BANK APPELLEE

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FROM THE 17TH DISTRICT COURT OF TARRANT COUNTY

MEMORANDUM OPINION 1

Billy Lee Burgin filed this restricted appeal from a default judgment granted in

favor of Appellee The Frost National Bank on Frost’s suit for breach of contract.

Burgin raises two points, both based on the trial court rendering judgment while

Burgin’s co-defendant was in bankruptcy. Because we hold that Burgin has not

demonstrated error on the face of the record, we affirm the trial court’s judgment.

According to Frost’s original petition, Burgin and Andrew Totz executed

personal guarantees for two loans made by Summit Bank, N.A. The first loan was

1  See Tex. R. App. P. 47.4. made to Apprecia LP and assumed by 8525 Mid-Cities Boulevard LLC (Mid-Cities),

in which Burgin owned an interest. The second loan was made to Mid-Cities.

Summit Bank merged with Frost, which became the owner and holder of the notes.

Mid Cities, Totz, and Burgin subsequently defaulted on their obligations under the

notes and guarantees.

Frost filed suit against Burgin and Totz, jointly and severally, to recover for

breach of contract based on their guarantees. Frost served Burgin on July 2, 2008,

and filed proof of service with the trial court on July 10, 2008. A little over a year

later, on July 21, 2009, Frost filed a motion for default judgment against Burgin,

which the trial court granted the next day. The judgment awarded Frost actual

damages of $155,478.18, prejudgment interest, postjudgment interest, and

attorney’s fees. This judgment became final when, on Frost’s motion, the trial court

dismissed Frost’s claims against Totz without prejudice on September 16, 2009. On

January 8, 2010, Burgin filed a notice of restricted appeal.

A direct attack on a judgment by restricted appeal must (1) be brought within

six months after the trial court signs the judgment; (2) by a party to the suit; (3) who

did not participate in the hearing that resulted in the judgment made the subject of

the complaint or file a timely postjudgment motion, request for findings of fact and

conclusions of law, or other notice of appeal; and (4) raise error that is apparent on

2 the face of the record. 2 The parties dispute whether Burgin has satisfied the last

element.

Burgin argues in two points that the record does show error. In his first point,

Burgin argues that the trial court erred by granting a default judgment and that the

judgment is void because Totz, his co-debtor and co-defendant, was in bankruptcy,

and the automatic stay was in effect at the time that the judgment was entered. In

his second point, Burgin argues that the default judgment is void because Frost

failed to advise the trial court of the bankruptcy case against Totz and failed to

request a severance prior to the entry of the default judgment. He combines his

argument on these two points.

W hen an entity 3 files for bankruptcy, an automatic stay of judicial proceedings

goes into effect, but ordinarily, this stay only operates against the debtor. 4 Under

certain circumstances, the automatic stay may be extended to parties other than the

debtor, such as co-debtors or co-defendants. 5 Nothing in the record that was before

2  GMR Gymnastics Sales, Inc. v. Walz, 117 S.W .3d 57, 58–59 (Tex. App.—Fort W orth 2003, pet. denied). 3  See 11 U.S.C.A. § 101(15) (Supp. 2010) (defining the term “entity” to include “person, estate, trust, governmental unit, and United States trustee”). 4  In re Sw. Bell Tel. Co., 35 S.W .3d 602, 604 (Tex. 2000). 5  Lisanti v. Dixon, 147 S.W .3d 638, 641 (Tex. App.—Dallas 2004, pet. denied), cert. denied, 549 U.S. 818 (2006); see also 11 U.S.C.A. § 362(a) (Supp. 2010) (making automatic stay applicable to proceedings to obtain property of the debtor’s estate).

3 the trial court when it entered its judgment shows that Totz had filed for bankruptcy. 6

Thus, nothing on the face of the record shows that the default judgment was entered

while an automatic stay applied to Burgin. W e therefore overrule Burgin’s first point.

As to his second point, Burgin fails to make any argument as to why Frost’s failure

to notify the trial court of Totz’s bankruptcy filing or its failure to request a severance

constitutes error on the face of the record. 7 Accordingly, we overrule this point.

Having overruled both of Burgin’s points, we affirm the trial court’s judgment.

LEE ANN DAUPHINOT JUSTICE

PANEL: LIVINGSTON, C.J.; DAUPHINOT and MEIER, JJ.

DELIVERED: May 6, 2010

6  See Alexander v. Lynda’s Boutique, 134 S.W .3d 845, 848–49 (Tex. 2004) (noting that “the face of the record” for deciding a restricted appeal includes only the evidence that was before the trial court at the time it rendered its judgment). 7  See Tex. R. App. P. 38.1(i).