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Peralta v. Heights Medical Center, Inc.

Supreme Court of the United States · 1988 · Civil Procedure

Civil ProcedureDue ProcessNoticeDefault JudgmentsFourteenth AmendmentDue Process Clauseservice of processnotice

Facts

Heights Medical Center sued Peralta on an alleged guaranty of a hospital debt and obtained a default judgment when he did not appear. In his later bill of review proceeding, Peralta alleged that he had not been personally served, had no notice of the default judgment, and that the return itself showed defective service under Texas law. He also alleged that the judgment was recorded, became a lien on his property, and led to an execution sale of his real property without his knowledge. For purposes of summary judgment and in the Supreme Court, the case proceeded on the assumption that Peralta had received no notice or service and that he had no meritorious defense to the underlying debt action.

Issue

May a state, consistent with the Due Process Clause of the Fourteenth Amendment, refuse to set aside a default judgment entered without notice or service unless the defendant first shows a meritorious defense to the underlying claim? Put differently, does lack of a meritorious defense cure the constitutional defect created by a judgment entered without notice?

Rule

A judgment entered without constitutionally adequate notice or service is infirm under the Due Process Clause, and a state may not condition relief from that judgment on the defendant's showing of a meritorious defense. When property has been affected by a judgment entered without notice at a meaningful time and in a meaningful manner, due process requires wiping the slate clean rather than asking whether the same result might have occurred on the merits.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Phoenix, Desert Mesa Supply sued Omar Vega for an unpaid equipment guaranty. Omar was never served, but Desert Mesa obtained a default judgment, recorded it, and the judgment immediately became a lien on Omar’s duplex. Arizona procedure allows a late challenge to that judgment only if Omar first shows a meritorious defense to the underlying debt, and Omar admits he likely owed the money.

If Omar argues that the meritorious-defense requirement violates due process because he never received constitutionally adequate notice, how should a court rule?

Explanation. Due process requires notice reasonably calculated to apprise the defendant of the action and permit objections. When a default judgment is entered without constitutionally adequate notice or service, the State cannot refuse to set it aside merely because the defendant cannot show a meritorious defense. The majority rejected the idea that lack of notice is harmless simply because the same result might later be reached on the merits, especially where the judgment itself creates serious property consequences such as a lien.