Xiaodong Li v. DDX Group Investment, LLC D/B/A Dong Ting Chinese Restaurant

404 S.W.3d 58, 2013 WL 1488479, 2013 Tex. App. LEXIS 4595
CourtCourt of Appeals of Texas
DecidedApril 11, 2013
Docket01-12-00405-CV
StatusPublished
Cited by17 cases

This text of 404 S.W.3d 58 (Xiaodong Li v. DDX Group Investment, LLC D/B/A Dong Ting Chinese Restaurant) 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
Xiaodong Li v. DDX Group Investment, LLC D/B/A Dong Ting Chinese Restaurant, 404 S.W.3d 58, 2013 WL 1488479, 2013 Tex. App. LEXIS 4595 (Tex. Ct. App. 2013).

Opinion

OPINION

LAURA CARTER HIGLEY, Justice.

Xiaodong Li appeals the trial court’s judgment denying his petition for a bill of review concerning a default judgment taken against him by DDX Group Investment, LLC, d/b/a Dong Tin Chinese Restaurant. In four issues, Li argues (1) he was not properly served with process in the underlying suit, (2) he was not required to file a restricted appeal before bringing this action, (3) there is insufficient evidence to show he had notice of a default judgment in time to file a motion for new trial or restricted appeal, and (4) this Court should award his reasonable and necessary attorneys’ fees.

We reverse and render.

Background

Li owned and operated a Chinese restaurant, which he put up for sale in 2007. The business was DDX Group Investment, LLC, doing business as Dong Tin Chinese Restaurant. Ziguang Lu purchased the business on September 12, 2007. Two months later, DDX Group filed suit against multiple defendants, including Li. DDX Group’s petition asserted that Li could be served at a condominium on Beverlyhill Street in Houston, Texas. While he *61 owned the condominium, Li was not residing there at the time.

Service on Li was unsuccessful. DDX Group then sought to serve Li at a residence on Field Yucca Lane in Cypress, Texas. Although a Xiaodong Li lived at the Field Yucca residence, it was not the Li that was the previous owner of DDX Group. Nevertheless, the father for the other Li, who lived with his son at the time, accepted service. The other Li was in China on business at the time. Upon his return, the other Li called a telephone number contained in the documents he received — although he could not identify at the hearing which phone number he called — and left multiple messages explaining that he was not the Xiaodong Li named in the petition.

On October 27, 2008, DDX Group filed a motion to dismiss the entire cause with prejudice. On November 5, 2008, the trial court granted the motion, ordering that “Cause Number 2007-76928 is DISMISSED, With Prejudice.” On November 21, 2008, DDX Group filed a proposed default judgment against Li. Other documents were also subsequently filed. The trial court did not render any other orders until it rendered the default judgment on March 3, 2009.

Li did not learn about the lawsuit until he visited a friend still residing in one of the condominiums on Beverlyhill Street. The friend handed him a letter giving notice that his condominium was going to be foreclosed upon to satisfy the judgment. Li was not able to stop the sale.

He filed a petition for bill of review on December 15, 2009, alleging he was never served with process. A hearing on the petition for a bill of review was held on January 13, 2012. The trial court denied the petition, and this appeal followed.

Bill of Review

In his first and third issues, Li argues that the trial court abused its discretion in denying his bill of review because the evidence establishes that he was not served with process and because there was no evidence to the contrary. In his second issue, Li argues that the trial court abused its discretion in denying his bill of review because he was not required to file a restricted appeal before pursuing the bill of review.

A. Standard of Review & Applicable Law

“A bill of review is an equitable proceeding brought by a party seeking to set aside a prior judgment that is no longer subject to challenge by a motion for new trial or appeal.” Caldwell v. Barnes, 154 S.W.3d 93, 96 (Tex.2004) (citing Baker v. Goldsmith, 582 S.W.2d 404, 406 (Tex.1979)). Bill of review plaintiffs must ordinarily plead and prove (1) a meritorious defense to the underlying cause of action, (2) which the plaintiffs were prevented from making by the fraud, accident, or wrongful act of the opposing party or official mistake, (3) unmixed with any fault or negligence on their own part. Baker, 582 S.W.2d at 406-07.

When, however, the plaintiff in a bill of review establishes that he was not served with process, constitutional due process eliminates the need to make any additional showing. Caldwell, 154 S.W.3d at 97. In that circumstance, “the Constitution discharges the first element, and lack of service establishes the second and third.” Ross v. Nat’l Ctr. for the Emp’t of the Disabled, 197 S.W.3d 795, 797 (Tex.2006). In such case, the complained-of judgment is void and must be vacated. In re E.R., 385 S.W.3d 552, 566 (Tex.2012).

*62 We review a trial court’s ruling on a bill of review for an abuse of discretion, indulging every presumption in favor of the court’s ruling. Davis v. Smith, 227 S.W.3d 299, 802 (Tex.App.-Houston [1st Dist.] 2007, no pet.). A trial court abuses its discretion if it acts in an unreasonable or arbitrary manner, or without reference to guiding rules and principles. Id.

B. Analysis

The evidence from the hearing on the bill of review unequivocally shows that Li was never served with process on the underlying lawsuit. This is a fundamental due process error and renders the default judgment against him void. In re E.R., 385 S.W.3d at 566.

At trial, DDX Group established that Li received a letter at his Beverlyhill Street address from DDX Group’s attorney in May 2009, two months after the default judgment had been rendered. Li acknowledged at trial that he had written the notation “return moved” on the unopened envelope. There is no indication of the contents of the envelope. On appeal, DDX Group argues that this establishes that Li failed to seek legal remedies before seeking a bill of review.

The requirement that a party must “show that it diligently pursued all adequate legal remedies” is included as part of the third element for obtaining a bill of review. Mabon Ltd. v. Afri-Carib Enters., Inc., 369 S.W.3d 809, 813 (Tex.2012). As we have held, however, when a party establishes it was not served with process, that fact by itself establishes both the second and third elements of the bill of review. Ross, 197 S.W.3d at 797. No further proof is required. See Caldwell, 154 S.W.3d at 97 (holding “[p]roof of non-service, then, will conclusively establish the ... only elements] that bill of review plaintiffs are required to prove when they are asserting lack of service of process as their only defense” (emphasis added)). Even assuming that proof that Li received an envelope from DDX Group’s attorney without proof of the contents of the envelope had the legal effect of establishing some form of notice, this does not defeat Li’s bill of review claim.

DDX Group’s claim that Li could have pursued, but failed to pursue, a restricted appeal fails for similar reasons.

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Cite This Page — Counsel Stack

Bluebook (online)
404 S.W.3d 58, 2013 WL 1488479, 2013 Tex. App. LEXIS 4595, Counsel Stack Legal Research, https://law.counselstack.com/opinion/xiaodong-li-v-ddx-group-investment-llc-dba-dong-ting-chinese-restaurant-texapp-2013.