The Texas Supreme Court, with palpable disgust, has reversed a Dallas Court of Appeals decision that upheld a $21.6 million judgment against a defendant who did not receive notice of a Zoom bench trial in his case until the day of trial.
Richard Wade v. Luis Valdetaro and Vertical Computer Systems, Inc. (No. 23-0443; August 30, 2024) arose from a suit filed by Valdetaro and Vertical against Wade for breach of fiduciary duty and fraud. The problems commenced when Wade’s attorney filed a motion to withdraw, a certified copy of which was mailed to Wade at the wrong address (even though the original petition was sent to the correct address and Wade confirmed that address in his answer). The trial court subsequently dismissed the case for want of prosecution but listed Wade’s address as “unknown.” The court then granted the motion to withdraw without hearing from Wade. Subsequently, the court removed the case from the dismissal docket and scheduled a bench trial, notice of which was again sent to Wade at the wrong address. On the morning of the trial, the court clerk managed to find Wade’s email address and send him notice of the trial. Wade appeared pro se and presented no evidence, protesting that he had just heard about the trial and was not prepared for it. The trial court brushed Wade aside and awarded plaintiffs $21.6 million after a one-hour bench trial at which the defendant did not present any evidence. The Dallas Court of Appeals affirmed.
In a per curiam opinion without oral argument, SCOTX reversed. The Court concluded that Wade had been deprived of his constitutional right to due process when the trial court refused to even hear Wade’s “reasonable explanation” for why he did not receive notice of the trial setting.
“A new trial is necessary because there is no allegation that withdrawing counsel intentionally provided an incorrect address for his client, and nothing from which to infer intent or conscious disregard on Wade’s part in failing to notice, correct, or update the address,” the Court opined. “To the contrary, the record contains evidence of a reasonable explanation for Wade’s failure to monitor the suit: the trial court had previously ordered the parties to binding arbitration and, consistent with that order, counsel’s motion to withdraw informed Wade that there were no pending trial court deadlines.”
SCOTX clearly didn’t like the way the trial court handled things, and one has to wonder what went on there. The judge didn’t seem interested at all in hearing Wade’s side of the story, and the fact that the court clerk messed up on Wade’s correct address didn’t seem to register. This is particularly strange because there was no indication from the record that Wade ever changed the address he certified in his answer to the lawsuit. Why, then, did the trial judge shut down the case on the ground that Wade should have kept the clerk’s office “updated” on his address? This case goes into the category of inexplicable things that can happen in a trial court, but one thing is clear: SCOTX should not have had to clean up this mess. Both the trial court and court of appeals fell down on the job here.
