Wallen v. State

667 S.W.2d 621, 1984 Tex. App. LEXIS 5149
CourtCourt of Appeals of Texas
DecidedMarch 7, 1984
Docket13863
StatusPublished
Cited by23 cases

This text of 667 S.W.2d 621 (Wallen v. State) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wallen v. State, 667 S.W.2d 621, 1984 Tex. App. LEXIS 5149 (Tex. Ct. App. 1984).

Opinion

PHILLIPS, Chief Justice.

Edward E. Wallen and Equitable Insurance Exchange appeal from the judgment of the trial court which, following a nonju-ry trial, decreed that the State of Texas recover from appellants for gross receipts taxes found due and unpaid.

We abate Wallen’s appeal to enable him to request additional findings of fact. We affirm the judgment as regards Equitable.

*622 Wallen was a mixed beverage permittee during the period for which taxes were found to be owing. Equitable had executed two bonds to secure payment of Wal-len’s taxes.

On January 8, 1981 the State filed its original petition in district court. Service was made upon Equitable, and it timely filed an answer. Service was not made upon Wallen until June 17, 1981. On November 16, 1981, the trial court rendered an interlocutory default judgment against Wallen; as of that day he had filed no answer.

On July 19, 1982 the State and Equitable proceeded to trial based upon the State’s claim on the bond. On this same day Wal-len filed an answer and appeared in court. Because of the entry of the default judgment, the trial court refused to consider Wallen’s answer or to allow Wallen to contest the State’s tax audit. The trial court did, however, permit Wallen to introduce evidence regarding bankruptcy proceedings had against Wallen. Wallen contended before the trial court that he had received service of citation at a time when the bankruptcy court’s automatic stay of collection efforts was in effect, and that, as a result, service was void. He asserted that the trial court therefore lacked jurisdiction to enter the November 16th default judgment.

Wallen testified that he had filed for bankruptcy in April of 1981 and that he was discharged from bankruptcy on September 10, 1981. Wallen’s attorney testified that on the Friday prior to the Monday trial, he, the attorney, had attempted to obtain certified copies of the entire bankruptcy file from the bankruptcy court, but that the bankruptcy office was “closed the entire day for the transfer of files.”

The trial court refused to admit into evidence a document offered by Wallen which was entitled “Order for Meeting of Creditors and Fixing Times for Filing Objections to Discharge and for Filing Complaints to Determine Dischargeability of Certain Debts, Combined with Notice Thereof and of Automatic Stay.” The State objected to admission of the document on the ground that it was neither an original document nor a properly certified copy. Wallen does not complain before this Court of the trial court’s refusal to admit this document.

In its final judgment the trial court made final the interlocutory default judgment against Wallen. It additionally found that the State was entitled to recover from Equitable a portion of the amount owed by Wallen (up to the limits of the bonds). It is undisputed that the trial court had jurisdiction to enter the final judgment against Wallen, since he appeared in court.

Following a timely request and reminder by appellant, the trial court failed to timely file findings of fact and conclusions of law. Findings and conclusions were filed on December 14, 1982, which was approximately two weeks past the statutory deadline for filing such. The findings and conclusions reached this court by supplemental transcript on January 5, 1983.

Although Equitable has filed a cost bond, and has thereby perfected an appeal, it has submitted no brief. It has neither raised any points of error nor requested any relief. For that reason we will affirm that portion of the judgment which assesses Equitable’s liability.

Wallen presents four points of error. Because of the disposition we here make, we consider only points one, two, and four, which provide as follows: (1) that the trial court erred in assuming jurisdiction over Wallen since service upon him was effected during his bankruptcy and was therefore void; (2) that the trial court erred in entering judgment against Wallen based upon the interlocutory default judgment, and (4) that the trial court erred in filing its findings of fact and conclusions of law after it lost jurisdiction and control over the case and beyond the time when Wallen could request additional or supplemental findings.

We initially note that if the trial court had jurisdiction to render the interlocutory default judgment, then we cannot find any abuse of discretion in its refusal to consider Wallen’s answer, in its refusal to *623 allow Wallen to introduce evidence attacking the State’s tax audit, or in its rendition of a final judgment based in part upon the interlocutory default judgment. Tex.R.Civ. P.Ann. 240 & 241 (1976); Kemp v. Harrison, 431 S.W.2d 900 (Tex.Civ.App.1968, writ ref d n.r.e.); 33 Tex.Jur.2d Judgments § 128 (1962). We find no abuse of discretion on the part of the trial court in refusing to consider Wallen’s answer and evidence as to the merits, since Wallen, without explanation as to delay, failed to offer such answer until the day of trial on Equitable’s liability (over a year after Wallen was served).

The question thus arises as to whether the trial court had jurisdiction to enter the interlocutory default judgment. The filing of a petition in bankruptcy operates as an automatic stay of certain actions against the debtor. 11 U.S.C.A. § 362(a) (1979 & Supp.1983). Among the actions stayed by 11 U.S.C.A. § 362(a) are the following:

(1) the commencement or continuation, including the issuance of process, of a judicial, administrative, or other proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title;
⅝ ⅜ # ⅜ ⅜ ⅝
(6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title....

Id. § 362(a)(1) & (6).

Actions taken in violation of the automatic bankruptcy stay are void even when there is no actual notice of the existence of the stay. Kalb v. Luce, 308 U.S. 433, 60 S.Ct. 343, 84 L.Ed. 370 (1940); In re Eisenberg, 3 Collier Bankr.Cas.2d 440 (B.Ct., E.D.N.Y.1980); In re Wheeler, 2 Collier Bankr.Cas.2d 980 (B.Ct., N.D.Ga. 1980); 2 Collier on Bankruptcy tl 362.11 (1983); See Community Investers v. Phillips Plastering, 593 S.W.2d 418 (Tex.Civ.App.1980, no writ).

We hold that the citation served upon Wallen was the type of action which is subject to the automatic stay. If service was made upon him during the pendency of the stay, such was void and without legal effect. The State points to the legislative history of 11 U.S.C.A. § 362 in an attempt to show that the citation served upon Wal-len was not the type of process intended to be affected by the automatic stay; the provisions cited by the State do not support that proposition.

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