Peralta v. Heights Medical Center, Inc.

Background

A hospital sued a man who had guaranteed an employee’s debt and obtained a default judgment after service of process was untimely. The man says he was never personally served or told about the judgment. The judgment was recorded in county land records, creating a lien on his property, and his property was later sold at a constable’s sale for less than its value. Two years later he filed a Texas bill of review (a state procedure to try to set aside a final judgment) claiming defective service and lack of notice.

Reasoning

The central question was whether Texas could refuse to set aside a judgment entered without notice unless the defendant first proved a meritorious defense. Texas courts required that showing even when the defendant alleged no notice. The high court explained that basic fairness and the Fourteenth Amendment require notice reasonably calculated to let people respond, and it rejected the idea that it was acceptable to deny relief just because the result might have been the same if the defendant had been present. The Court emphasized the serious consequences of the judgment — a recorded lien, impaired ability to sell or mortgage property, and a forced sale — and reversed the Texas decision that barred relief.

Real world impact

The ruling protects people who never received notice from being stuck with secret judgments that take their property. The Court limited state rules that would keep someone from getting a fresh chance to be heard when due process was not provided. The opinion dealt only with the ground relied on below and did not decide other remedies that were raised for the first time here.