Heights Medical Center sued Jose Peralta in Texas state court on a debt claim. Peralta was never properly served with process and received no actual notice of the lawsuit. The court nonetheless entered a default judgment against him, awarding damages, attorney's fees, interest, and costs. The judgment creditor then recorded an abstract of judgment, which created a lien on Peralta's real property and clouded his title. Peralta discovered the judgment and lien only later, when he attempted to convey property. To clear title and complete the transaction, he paid the amount of the judgment under protest. He then filed a bill of review (an equitable vehicle under Texas procedure for setting aside final judgments) to vacate the default on the ground that the judgment was void for lack of service and notice. Although the state courts accepted that service had been defective, they denied relief because Peralta had not shown a meritorious defense to the underlying claim. The Texas Supreme Court declined review, and the U.S. Supreme Court granted certiorari.
Does the Due Process Clause permit a state to condition relief from a default judgment entered without proper service of process on the defendant's showing of a meritorious defense to the underlying action?
Due process requires notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. A judgment entered without constitutionally adequate notice and personal jurisdiction is void and must be set aside; a state may not condition vacatur of such a judgment on the defendant's demonstration of a meritorious defense. See Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950); Armstrong v. Manzo, 380 U.S. 545 (1965).
No. A state may not require a defendant to show a meritorious defense as a condition to setting aside a default judgment that was entered without proper service and notice. The default judgment violates due process and must be vacated.
The Court emphasized that due process is violated when a person is deprived of property without notice and an opportunity to be heard. The constitutional wrong is the denial of that opportunity, not merely the risk of an incorrect outcome on the merits. Requiring a showing of a meritorious defense to obtain relief effectively treats the lack of notice as harmless unless the defendant can prove he would have prevailed—an approach Armstrong v. Manzo forbids. The right to be heard cannot be conditioned on a post hoc demonstration of likely success. The Court also explained that notice serves multiple purposes beyond litigating ultimate liability: it allows a defendant to challenge personal jurisdiction, venue, damages, attorney's fees, costs, interest, limitations, and to assert counterclaims, cross-claims, or defenses affecting the scope and terms of any judgment. Even if the defendant might ultimately be liable for some amount, the absence of notice deprives him of the chance to contest the amount, timing, and collateral consequences. Here, the recording of the abstract of judgment created a lien that clouded Peralta's title, prompting payment under protest to clear property; that deprivation flowed directly from the default obtained without notice. The Constitution does not permit a state to insist that a defendant first prove the case outcome would have differed before vacating a judgment obtained in violation of due process. Accordingly, the Court reversed and remanded, holding that the default judgment must be set aside without regard to whether Peralta possessed a meritorious defense to the underlying claim.
Peralta is a leading case on void judgments and due process. It clarifies that when service of process is constitutionally deficient, the resulting default judgment is void and must be vacated without any requirement that the defendant show a meritorious defense or lack of prejudice. The case is frequently invoked in motions to vacate under Rule 60(b)(4) and state equivalents, and it informs exam analysis on personal jurisdiction, service of process, and the constitutional limits on state procedural rules. For practice, it cautions plaintiffs to ensure proper service and reminds courts that procedural shortcuts cannot be justified by assumptions about the merits.
Peralta v. Heights Medical Center underscores that due process is not a merits-dependent entitlement. A court cannot excuse a failure of constitutionally adequate notice by demanding that a defendant later prove the case would have come out differently. Where service is defective and no notice is provided, the resulting judgment is void and must be vacated.