Mungia v. Via Metro. Transit

Opinion by: CATHERINE STONE

Reversed in part, rendered in part, and remanded.

Mark Anthony Cevallos, Miller & Bicklein, San Antonio, TX, for Appellant. David M. Prichard, Prichard Hawkins McFarland & Young, San Antonio, TX, for Appellee.

Opinion by: CATHERINE STONE, Chief Justice.

Ernest Mungia sued his former employer, VIA Metropolitan Transit, and obtained a default judgment. Four years later, VIA attempted to set aside the default judgment by filing a bill of review and a claim for declaratory relief. The trial court granted VIA's motion for summary judgment as to both causes of action and awarded attorney's fees to VIA. In one issue on appeal, Mungia contends the trial court abused its discretion in awarding attorney's fees.

Most critical to our holding was the fact that the members' declaratory action entitled them to attorney's fees under both the Texas Property Code and the UDJA. See id. (“the declaratory relief sought was not a means to obtain otherwise impermissible attorneys' fees ....”) (emphasis in original). Since the members were otherwise entitled to attorney's fees under the Property Code, they were not asserting the claim for declaratory relief for the sole purpose of obtaining attorney's fees under the UDJA.

In ProFinance Assocs., Inc. v. Cohen–Sagi, 04–10–00242–CV, 2011 WL 2150356, at *2 (Tex.App.-San Antonio Jul. 8, 2011, pet. denied) (mem. op.), the plaintiff asserted a declaratory judgment action related to the construction of a contract. The defendant asserted a counter-claim for, inter alia, breach of contract and also declaratory relief. Id. The trial court entered judgment in favor of the defendant. Id. We reversed the judgment of the trial court and remanded the case for a determination of attorney's fees under the UDJA. Id. at *3. On remand, the trial court awarded the plaintiff attorney's fees and the defendant appealed, citing MBM Fin. Corp. Id. Although the attorney's fees were awarded for the plaintiff's sole claim under the UDJA, the defendant argued that the declaratory relief action was sought for the sole purpose of obtaining attorney's fees because the plaintiff's declaratory action claim was “in essence a defense against [the defendant's] breach of contract [counter-] claim.” Id. We rejected the defendant's argument and explained:

Unlike the facts in [MBM Fin. Corp.], in our case, [the plaintiff] did not tack her declaratory judgment action onto a standard breach-of-contract claim. [The plaintiff] did not seek declaratory relief as a means to obtain otherwise impermissible attorney's fees; declaratory relief was a means of obtaining the quickest and most effective relief pertaining to the dispute between her and [the defendant]. See [ Zuehl] (explaining that the existence of another adequate remedy such as breach of contract does not preclude a declaratory judgment and upholding award of attorney's fees because declaratory relief was not sought as a means to obtain otherwise impermissible attorney's fees-it was a means of obtaining the quickest and most effective relief).
Id. at *5. Most notably, the plaintiff in ProFinance asserted only one claim: one for declaratory relief under the UDJA. The attorney's fee award was proper because the declaratory judgment claim did not concern issues or relief duplicative of another asserted claim.

Our observations in Zuehl and ProFinance regarding the quick and effective relief of the declaratory action were included to further establish that the declaratory judgment claims were not asserted for the sole purpose of obtaining impermissible attorney's fees. We do not read these holdings, as VIA contends, to authorize attorney's fees under the UDJA simply because declaratory relief is sought as a means to obtain relief quicker and more effectively than that authorized by another asserted cause of action. By enacting the UDJA, the Legislature intended to create “a ‘speedy and effective remedy’ for settling disputes before substantial damages were incurred.” MBM Fin. Corp., 292 S.W.3d at 670 (quoting Cobb v. Harrington, 144 Tex. 360, 190 S.W.2d 709, 713 (1945)). The UDJA was intended to provide “a means of determining the parties' rights when a controversy has arisen but before a wrong has been committed, and is preventative in nature.” Etan, 359 S.W.3d at 624 (citing Cobb, 144 Tex. at 367, 190 S.W.2d at 713). If the quick and effective nature of declaratory relief was, by itself, sufficient to establish a purpose aside from obtaining attorney's fees, attorney's fees would almost always be justified under the UDJA, regardless of whether attorney's fees are authorized under other asserted claims. This, of course, would obviate the rule in MBM Fin. Corp.

Moreover, VIA has not established that the relief sought in its declaratory judgment action was any greater than that sought in its bill of review. The bill of review sought to vacate the default judgment while the declaratory action sought to declare it void and unenforceable. To “vacate” a judgment is to “make [it] void.” Black's Law Dictionary 1584 (8th ed. 2004). Thus, the result of both the bill of review and the declaratory action was that the default judgment was set aside. VIA argues that by asserting the declaratory action, it was afforded a “faster resolution” with regard to its liability under the default judgment, noting that its declaratory judgment action resulted in a final judgment while the bill of review merely resulted in an interlocutory order.

However, neither the bill of review nor the declaratory judgment action disposed of the entire controversy and VIA's liability with regard to Mungia's claims against it remains unresolved. Under either cause of action, the relief obtained was the same—the default judgment was set aside. See City of Carrollton v. RIHR Inc., 308 S.W.3d 444, 455 (Tex.App.-Dallas 2010, pet. denied) (attorney's fee award under UDJA improper where landowner asserted a claim for unconstitutional taking and a declaratory action seeking to declare taking unconstitutional despite landowner's argument that declaratory action was independently viable—the declaratory action duplicated issues in the taking claim and sought no relief greater than that available with the taking claim); cf. Rapid Settlements, LTD. v. Settlement Funding, LLC, No. 14–09–00637–CV, 2010 WL 3504182, at *4 (Tex.App.-Houston [14th Dist.] Sep. 9, 2010, no pet.) (mem. op.) (attorney's fee award under the UDJA proper where declaratory action would have established ownership of structured settlement payments and request to vacate arbitration award would have established, at most, that arbitration award was invalid).

In conclusion, the issue of whether the improper service rendered the default judgment void is the same in both VIA's bill of review and declaratory judgment action. Additionally, the declaratory judgment action afforded VIA no relief greater than that afforded by its bill of review because both causes of action sought to set aside the default judgment. Accordingly, the declaratory judgment action served no purpose other than to obtain attorney's fees.

The trial court did not have discretion to award VIA attorney's fees under the UDJA. The judgment of the trial court is reversed as to the award of attorney's fees and judgment is rendered that VIA is not entitled to recover attorney's fees under the UDJA. The case is remanded to the trial court for further proceedings as to Mungia's claims against VIA.