Understanding Your Options After a Default Judgment in Texas
It’s sometimes the case that the stress of an unexpected lawsuit leaves folks unsure of what steps to take. Often, people do nothing. This inaction may lead to the entry of a default judgment against you.
Perhaps a lawsuit fell through the cracks in the management department of your business. Your company never filed a response.
Now your Texas business is faced with a default judgment. Many options exist for defendants subject to a default judgment.
In this article we’ll examine what options you may have for a second chance after being subjected to a default judgement in Texas.
What Is a Default Judgment in Texas?
A default judgment in Texas is a judgment made in civil court due to a defendant’s failure to respond to a plaintiff’s lawsuit against them. Completion of specific requirements must be satisfied by a plaintiff before a motion for default judgment is entered against the defendant.
First, to start a civil case in Texas, the plaintiff, or the suing party, files a complaint in Texas civil court against the defendant, or the sued party. The complaint describes what the plaintiff wants. The complaint also identifies the defendant. In addition to the complaint, the plaintiff must file a summons. A summons is the official notice of the lawsuit. Second, the plaintiff must serve the complaint and summons on the defendant.
Service is usually done personally by a process server. But the plaintiff may be unable to serve the defendant. In those situations, publishing the summons and complaint in a legal newspaper satisfies notice requirements. However, this requires permission from the court.
Lastly, upon service with notice of the complaint and summons, the defendant must respond. Texas procedural rules require the defendant to file a response within twenty days from the date of service of the initial complaint and summons.
What Is a Motion for Default Judgment in Texas?
Issues arise when a defendant fails to file a timely response to the civil complaint. As a rule, when the defendant fails to respond, the plaintiff may file a motion for a default judgment. Default judgments are decisions made by the court against the defendant. Grounds for granting a motion for default judgment in Texas exist if a defendant fails to respond to the lawsuit and make an appearance in the matter.
Plaintiffs must make a request before the court will grant a motion for default judgment in Texas. Most importantly, a default judgment is binding on both parties.
How Do I Respond to a Default Judgment in Texas?
Quick action is required to defend yourself if the plaintiff files a motion for default judgment in Texas.
Once entered, the default judgment permits a plaintiff to act quickly and enforce the terms of the judgment. A plaintiff may request an abstract of judgment. An abstract of judgment permits the plaintiff to acquire judgment liens on your real and personal property. A writ of execution permits law enforcement authorities to repossess your property. Default judgments also authorize plaintiffs to garnish your wages or attach your bank accounts to the judgment. Therefore, it is imperative to respond to a motion for default judgment quickly.
If a plaintiff has filed a motion for default judgment and the default judgment is granted, it is crucial to seek the help of a qualified attorney. Attorneys aid in crafting arguments aimed at successfully challenging the motion for default judgment.
Filing a Motion to Set Aside Default Judgment in Texas
If the court has already entered a default judgment against you, you can file a motion to set aside the default judgment in Texas with the court. Deadlines exist requiring you to file your motion to set aside a default judgment in Texas within a certain timeframe. Generally, a Motion to Set Aside a Default Judgment and Notice of Hearing must be filed within 30 days of the date the default judgment was signed by the judge.
However, if you first learned of the default judgment more than 20 days after it was signed by the judge, your 30 day deadline to file the motion begins on the date you received notice.
Lastly, if you were served notice of the default judgment by publication, you have two years from the date of the default judgment to ask for a new trial. Additionally, if you were on active military duty at the time the default judgment was entered, you have additional time to file your motion.
There exist multiple grounds for setting aside a default judgment.
Mistake, Inadvertence, Surprise, or Excusable Neglect
Grounds to set aside a default judgment may exist if there was mistake, inadvertence, surprise, or excusable neglect. As a rule, grounds based on these criteria exist in extraordinary circumstances.
Excusable neglect occurs when the defendant did not willfully ignore the complaint but failed to respond for some excusable reason. For example, let’s say that a company failed to respond to a lawsuit because one of their employees misplaced the complaint and summons. If the plaintiff subsequently obtained a default judgment, the court may grant a motion to set aside on grounds of excusable neglect. Additionally, if the company acted diligently upon notice of the default judgment, the court may view the excuse more favorably.
An example of mistake may occur if the defendant’s attorney miscalculates the response date to the lawsuit when counting days on a calendar.
Fraud, Misrepresentation, or Other Conduct By the Plaintiff
Fraud is action by a party constituting wrongful deception for financial gain. Misrepresentation is giving false or misleading accounts of the nature of something. Grounds of fraud, misrepresentation, or other conduct, are much harder to prove than grounds like mistake and excusable neglect. The court will analyze the facts on a case-by-case basis.
If the defendant relied upon certain statements made by the plaintiff, an excuse for failure to timely respond to a complaint may exist. For example, let’s say a plaintiff assures a defendant that the lawsuit will be dismissed. The defendant fails to file a response based on the plaintiff’s representations. But in actuality, the plaintiff proceeds with the case. If the defendant then seeks a default judgment based on the defendant’s inaction, the defendant may have a basis for setting aside the default judgment on misrepresentation or fraud grounds.
A motion to set aside a default judgment exists if the judgment has been satisfied. Satisfaction of judgment filed with the court shows completion of payment to the plaintiff.
Personal Service Improper
The law requires proper notice to defendants of a lawsuit against them. Any resulting default judgment against the defendant is voidable if a defendant has inadequate notice of the action.
Improper notice of a pending action against them prohibits a defendant from preparing an adequate defense. Notably, a defendant cannot use lack of notice as an excuse if it resulted from the defendant’s conduct or avoidance of service.
Request for New Trial
Additionally, a filed motion to set aside a default judgment may also request a new trial. If granted, the default judgment will be vacated and a new trial will be scheduled on the matter. In a county or district court in Texas, the deadline for a request for a new trial is 30 days from entry of the default judgment.
Filing a Restricted Appeal
Another useful tool to fight against a default judgment in Texas is filing a restricted appeal. A restricted appeal is not the same as a motion to set aside a default judgment in Texas. Further, mistake or excusable neglect are not grounds for a restricted appeal. A restricted appeal attacks the judgment itself by asserting that the default judgment was not supported by the law or facts alleged by the plaintiff.
A restricted appeal has specific filing requirements and deadlines. Procedural rules require a defendant to file a restricted appeal within six months of the entry of default judgment. Additionally, appeals must be brought by a named party in the lawsuit. Most importantly, the party bringing the claim could not have participated in the lawsuit, responded to the complaint, or made an appearance. Lastly, the basis for the restricted appeal must be apparent from the face of the record.
Filing a Bill of Review
A bill of review is an equitable proceeding. According to the Texas Supreme Court, a bill of review is “an independent equitable action brought by a party to a former action seeking to set aside a judgment which is no longer appealable or subject to a motion for a new trial.” An equitable proceeding requests the court for action, as opposed to a request for a monetary award. A person requesting a bill of review must prove the following:
- A valid defense exists;
- Fraud, accident, or wrongful act of the plaintiff prevented the defendant making a valid defense; and
- The lack of response was not due to any failure of the defendant.
If granted, the bill of review is a direct attack on the judgment. Therefore, there will be a brand new lawsuit. The defendant becomes the plaintiff. If granted, the court sets aside the default judgment. A new trial is granted based on the facts presented in the new case.
Additionally, if granted, the default judgment is set aside. Then, the parties revert to their original roles as plaintiff and defendant. The plaintiff must then prove his or her case. If unsuccessful and denied, the bill of review fails and the defendant may pursue an appeal.
The statute of limitations governing bill of review proceedings is four years from the date of the default judgment.
How Can an Attorney Help Me Defend Against a Default Judgment?
Finding yourself subject to the binding terms of a default judgment is an overwhelming and stressful experience. The dedicated attorneys at Wood Edwards LLP can help. Wood Edwards LLP possesses extensive litigation experience in state and federal courts. Our firm focus provides big-firm talent with small-firm efficiency.
Contact our office today with any questions you have about a default judgment in Texas.