Court Opinion

ID: 9377534
Source: CourtListenerOpinion
Date Created: 2023-03-08 07:08:58.454681+00
Date Added: 2024-06-11T17:17:14.699441
License: Public Domain

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–