Civil Procedure II, Pages 528–530

Peralta v. Heights Medical Center

Supreme Court of the United States, February 24, 1988

Facts:

Plaintiff sued to recover $5600 allegedly due under defendant's guarantee of a hospital debt incurred by one of his employee's. Defendant did not appear or answer, so default judgment was entered for the amount claimed, plus attorney's fees and costs.

Defendant began a bill of review, as he was served too late.

Plaintiff's Argument:

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Appellee argued that despite the allegation of no service and no notice of judgment, the meritorious-defense requirement prevented relief and that even though the bill of review was the only avenue of relief, the State could constitutionally insist on the showing of a meritorious defense.

Procedural History:

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The Texas courts nevertheless held, as appellee urged them to do, that to have the judgment set aside, appellant was required to show that he had a meritorious defense, apparently on the ground that without a defense, the same judgment would again be entered on retrial and hence appellant had suffered no harm from the judgment entered without notice.

Issue:

Does a lack of service enable a judgment to be set aside without a showing of a meritorious defense?

Reasoning:

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    Failure to give notice violates "the most rudimentary demands of due process of law."

  • If notice had been given, defendant could have taken other options such as negotiating a settlement or paying the debt himself instead of it his property being sold by others without notice.

Judgment:

Reversed.

Rule/Holding:

Yes, due process demands that a judgment be set aside for a lack of service.