REVERSE; RENDER and REMAND and Opinion Filed March 3, 2023
S In The Court of Appeals Fifth District of Texas at Dallas No. 05-21-00206-CV
TRUIST BANK, Appellant V. ROGELIO LOYOLA AND EMPIRE EXOTIC MOTORS, INC., Appellees
On Appeal from the 95th District Court Dallas County, Texas Trial Court Cause No. DC-20-18492
MEMORANDUM OPINION Before Justices Partida-Kipness, Reichek, and Goldstein Opinion by Justice Goldstein Truiust Bank appeals the trial court’s dismissal of its petition for bill of review
to set aside a Default Judgment. In four issues, Truist Bank1 argues (1) the trial court
erred in dismissing its bill of review asserting it had standing to challenge the default
judgment in a suit where it was not a party, (2) it is undisputed it was never served,
joined or notified of the underlying lawsuit which extinguished its properly perfected
and unreleased lien on a 2018 Ferrari, (3) it raised meritorious defenses, and (4) the
1 Truist Bank asserts it is the successor in interest to SunTrust Bank, which is not disputed in the record before us, and therefore references to Truist Bank shall mean SunTrust Bank where applicable. trial court’s failure to file findings of fact and conclusions of law was harmful error.
We reverse the trial court’s judgment dismissing the petition for bill of review,
render judgment granting the bill of review, and remand for further proceedings
consistent with this opinion.
BACKGROUND
This dispute centers around the right to possess a 2018 Ferrari. The facts are
well known to the parties2 and we draw these facts from the record before us.
Briefly, Lou Gigliotti financed the purchase of the Ferrari through Truist Bank.
Gigliotti traded in the Ferrari to Empire Exotic Motors. Empire thereafter sold the
Ferrari to Loyola without satisfying the Truist Bank loan or obtaining clear title.
Gigliotti sued Rogelio Loyola and his wife in Collin County asserting a
conversion claim and seeking a declaratory judgment that he is the lawful owner of
the Ferrari and restoration of title. In his Collin County original petition, Gigliotti
asserted that the Ferrari was financed through Truist Bank, which took a security
interest in, and held possession of, the title for amounts due and owing. After he
filed an answer in the Collin County suit, Loyola sued Empire in Dallas County
seeking title to the Ferrari through breach of implied warranty or suit for specific
performance. In his Dallas County lawsuit, Loyola did not reference the pending
2 The extensive background facts are set forth in a separate appeal resolving the right of possession issue. Loyola v Truist Bank, No. 05-21-00948-CV, 2023 WL 1501629, (Tex. App.— Dallas February 3, 2023, no pet. h.) (mem. op.). We note that Truist Bank was not a party to the Collin County lawsuit at the time Loyola filed the Dallas County lawsuit. –2– Collin County proceedings and failed to identify Truist Bank as a party in interest or
otherwise apprise the trial court of a lien on the Ferrari. On June 9, 2020, Loyola
obtained a default judgment against Empire which stated that Loyola “is the good
faith purchaser of the Ferrari and is entitled to a valid Texas title, free and clear of
all liens.”3 Truist Bank asserts that Loyola applied for and obtained a new title to
the Ferrari removing the Truist Bank lien.
On December 16, 2020, Truist Bank filed its original petition for bill of review
alleging Loyola filed a suit to obtain clear title to the 2018 Ferrari on which Truist
Bank had a properly perfected, unreleased lien. Truist Bank asserted Loyola
obtained a default judgment invalidating Truist Bank’s secured interest lien by
failing to serve, join, or notify Truist Bank of the Dallas County lawsuit. Because
Loyola failed to properly serve, join, or notify Truist Bank, it argued, Truist Bank
was entitled to have its bill of review granted and the final judgment in favor of
Loyola set aside. Loyola answered, asserting Truist Bank lacked standing. In a
verified plea, Loyola asserted another suit was pending between the same parties
involving the same claim. On March 1, 2021, the trial court entered an order denying
Truist Bank’s bill of review having “determined that the Petition is not well
founded.” Truist Bank requested findings of fact and conclusions of law and timely
3 The record before us reflects the Dallas County suit sought transfer of title, with no reference to liens. –3– gave notice of past due findings of fact and conclusions of law. None were issued,
and this appeal followed.
STANDARD OF REVIEW
We review the denial of a bill of review for an abuse of discretion. Ramsey v.
Davis, 261 S.W.3d 811, 815 (Tex. App.—Dallas 2008, no pet.). Generally, a party
seeking a bill of review must allege and prove that (1) he had a meritorious defense
to the underlying cause of action; (2) which he was prevented from making because
of fraud, accident, or a wrongful act by the opposite party; (3) that was untainted by
any fault or negligence of his own. Caldwell v Barnes, 154 S.W.3d 93, 96 (Tex.
2004).
ANALYSIS
A bill of review is an equitable proceeding to set aside a prior judgment that
is no longer subject to challenge by a motion for new trial or a direct appeal. Mabon
Ltd. v. Afri–Carib Enters., Inc., 369 S.W.3d 809, 812 (Tex. 2012) (per curiam). A
bill of review is a “direct attack” on a judgment. See PNS Stores, Inc. v. Rivera, 379
S.W.3d 267, 271 (Tex. 2012). Ordinarily, a bill of review involves an independent
action by a party to the former case. Id. at 270 n.1. 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. See Frost Nat’l Bank v. Fernandez, 315
S.W.3d 494, 504 (Tex. 2010). A party can argue that a judgment is void in either a
bill of review or a collateral attack. See PNS Stores, 379 S.W.3d at 271 (“It is well
–4– settled that a litigant may attack a void judgment directly or collaterally”). It is
undisputed that Truist Bank claimed it had an interest in the Ferrari at the time of the
default judgment and that Loyola, through participation in the Collin County suit,
was on notice of Truist Bank’s unreleased lien and possession of the original title.
The Default Judgment granting Loyola title “free and clear of all liens” no doubt
prejudices Truist Bank’s legal right and interest in its priority, unreleased lien and
original title.4 Based upon the record before us, we conclude that Truist Bank had
standing to bring a bill of review.5 See Frost Nat’l Bank, 315 S.W.3d at 504.
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 the Dallas County 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. The record does not contain
the evidence considered by the trial court in rendering the default or indicate what
Loyola knew at the time of title transfer and whether such title transferred was free
and clear of all liens.
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REVERSE; RENDER and REMAND and Opinion Filed March 3, 2023
S In The Court of Appeals Fifth District of Texas at Dallas No. 05-21-00206-CV
TRUIST BANK, Appellant V. ROGELIO LOYOLA AND EMPIRE EXOTIC MOTORS, INC., Appellees
On Appeal from the 95th District Court Dallas County, Texas Trial Court Cause No. DC-20-18492
MEMORANDUM OPINION Before Justices Partida-Kipness, Reichek, and Goldstein Opinion by Justice Goldstein Truiust Bank appeals the trial court’s dismissal of its petition for bill of review
to set aside a Default Judgment. In four issues, Truist Bank1 argues (1) the trial court
erred in dismissing its bill of review asserting it had standing to challenge the default
judgment in a suit where it was not a party, (2) it is undisputed it was never served,
joined or notified of the underlying lawsuit which extinguished its properly perfected
and unreleased lien on a 2018 Ferrari, (3) it raised meritorious defenses, and (4) the
1 Truist Bank asserts it is the successor in interest to SunTrust Bank, which is not disputed in the record before us, and therefore references to Truist Bank shall mean SunTrust Bank where applicable. trial court’s failure to file findings of fact and conclusions of law was harmful error.
We reverse the trial court’s judgment dismissing the petition for bill of review,
render judgment granting the bill of review, and remand for further proceedings
consistent with this opinion.
BACKGROUND
This dispute centers around the right to possess a 2018 Ferrari. The facts are
well known to the parties2 and we draw these facts from the record before us.
Briefly, Lou Gigliotti financed the purchase of the Ferrari through Truist Bank.
Gigliotti traded in the Ferrari to Empire Exotic Motors. Empire thereafter sold the
Ferrari to Loyola without satisfying the Truist Bank loan or obtaining clear title.
Gigliotti sued Rogelio Loyola and his wife in Collin County asserting a
conversion claim and seeking a declaratory judgment that he is the lawful owner of
the Ferrari and restoration of title. In his Collin County original petition, Gigliotti
asserted that the Ferrari was financed through Truist Bank, which took a security
interest in, and held possession of, the title for amounts due and owing. After he
filed an answer in the Collin County suit, Loyola sued Empire in Dallas County
seeking title to the Ferrari through breach of implied warranty or suit for specific
performance. In his Dallas County lawsuit, Loyola did not reference the pending
2 The extensive background facts are set forth in a separate appeal resolving the right of possession issue. Loyola v Truist Bank, No. 05-21-00948-CV, 2023 WL 1501629, (Tex. App.— Dallas February 3, 2023, no pet. h.) (mem. op.). We note that Truist Bank was not a party to the Collin County lawsuit at the time Loyola filed the Dallas County lawsuit. –2– Collin County proceedings and failed to identify Truist Bank as a party in interest or
otherwise apprise the trial court of a lien on the Ferrari. On June 9, 2020, Loyola
obtained a default judgment against Empire which stated that Loyola “is the good
faith purchaser of the Ferrari and is entitled to a valid Texas title, free and clear of
all liens.”3 Truist Bank asserts that Loyola applied for and obtained a new title to
the Ferrari removing the Truist Bank lien.
On December 16, 2020, Truist Bank filed its original petition for bill of review
alleging Loyola filed a suit to obtain clear title to the 2018 Ferrari on which Truist
Bank had a properly perfected, unreleased lien. Truist Bank asserted Loyola
obtained a default judgment invalidating Truist Bank’s secured interest lien by
failing to serve, join, or notify Truist Bank of the Dallas County lawsuit. Because
Loyola failed to properly serve, join, or notify Truist Bank, it argued, Truist Bank
was entitled to have its bill of review granted and the final judgment in favor of
Loyola set aside. Loyola answered, asserting Truist Bank lacked standing. In a
verified plea, Loyola asserted another suit was pending between the same parties
involving the same claim. On March 1, 2021, the trial court entered an order denying
Truist Bank’s bill of review having “determined that the Petition is not well
founded.” Truist Bank requested findings of fact and conclusions of law and timely
3 The record before us reflects the Dallas County suit sought transfer of title, with no reference to liens. –3– gave notice of past due findings of fact and conclusions of law. None were issued,
and this appeal followed.
STANDARD OF REVIEW
We review the denial of a bill of review for an abuse of discretion. Ramsey v.
Davis, 261 S.W.3d 811, 815 (Tex. App.—Dallas 2008, no pet.). Generally, a party
seeking a bill of review must allege and prove that (1) he had a meritorious defense
to the underlying cause of action; (2) which he was prevented from making because
of fraud, accident, or a wrongful act by the opposite party; (3) that was untainted by
any fault or negligence of his own. Caldwell v Barnes, 154 S.W.3d 93, 96 (Tex.
2004).
ANALYSIS
A bill of review is an equitable proceeding to set aside a prior judgment that
is no longer subject to challenge by a motion for new trial or a direct appeal. Mabon
Ltd. v. Afri–Carib Enters., Inc., 369 S.W.3d 809, 812 (Tex. 2012) (per curiam). A
bill of review is a “direct attack” on a judgment. See PNS Stores, Inc. v. Rivera, 379
S.W.3d 267, 271 (Tex. 2012). Ordinarily, a bill of review involves an independent
action by a party to the former case. Id. at 270 n.1. 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. See Frost Nat’l Bank v. Fernandez, 315
S.W.3d 494, 504 (Tex. 2010). A party can argue that a judgment is void in either a
bill of review or a collateral attack. See PNS Stores, 379 S.W.3d at 271 (“It is well
–4– settled that a litigant may attack a void judgment directly or collaterally”). It is
undisputed that Truist Bank claimed it had an interest in the Ferrari at the time of the
default judgment and that Loyola, through participation in the Collin County suit,
was on notice of Truist Bank’s unreleased lien and possession of the original title.
The Default Judgment granting Loyola title “free and clear of all liens” no doubt
prejudices Truist Bank’s legal right and interest in its priority, unreleased lien and
original title.4 Based upon the record before us, we conclude that Truist Bank had
standing to bring a bill of review.5 See Frost Nat’l Bank, 315 S.W.3d at 504.
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 the Dallas County 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. The record does not contain
the evidence considered by the trial court in rendering the default or indicate what
Loyola knew at the time of title transfer and whether such title transferred was free
and clear of all liens. Nor did Loyola assert being a bona fide purchaser for value as
a defense to the bill of review; instead, he raised this issue in his trial brief, supported
by his declaration to the trial court. Truist Bank was prevented from establishing or
4 We were not asked and do not opine about Loyola’s ability to receive title free and clear of all liens as against Commerce Bank which Loyola represented to have financed the balance of the Ferrari purchase. 5 On appeal, Loyola does not dispute Truist Bank had standing. –5– protecting its priority lien rights by Loyola’s wholesale failure to serve, join, or
notify Truist Bank in the Dallas County suit. As a result, Loyola was unchallenged
in obtaining a default judgment granting him the ability to obtain title to the Ferrari
free and clear of all liens. Loyola does not assert, and the record is devoid of any
evidence of fault or negligence on the part of Truist Bank.
We conclude on the record before us that the trial court abused its discretion
by not affording Truist Bank the opportunity to assert its existing legal right or
interest in the Ferrari juxtaposed against Loyola’s legal right to title or possession.
See id. Based upon this determination, we need not and do not address the failure to
issue findings of fact or conclusions of law. TEX. R. APP. P. 47.1.
We reverse the trial court’s judgment, render judgment granting Truist Bank’s
bill of review, and remand for further proceedings consistent with this opinion.
/Bonnie Lee Goldstein/ BONNIE LEE GOLDSTEIN 210206F.P05 JUSTICE
–6– S Court of Appeals Fifth District of Texas at Dallas JUDGMENT
TRUIST BANK, Appellant On Appeal from the 95th District Court, Dallas County, Texas No. 05-21-00206-CV V. Trial Court Cause No. DC-20-18492. Opinion delivered by Justice ROGELIO LOYOLA AND EMPIRE Goldstein. Justices Partida-Kipness EXOTIC MOTORS, INC., Appellees and Reichek participating.
In accordance with this Court’s opinion of this date, the judgment of the trial court is REVERSED and judgment is RENDERED GRANTING Truist Bank’s bill of review. This case is REMANDED for further proceedings consistent with this opinion. It is ORDERED that appellant TRUIST BANK recover its costs of this appeal from appellees ROGELIO LOYOLA AND EMPIRE EXOTIC MOTORS, INC.
Judgment entered this 3rd day of March 2023.
–7–