Appellate win in securities-fraud suit

Former of-counsel attorney Leza Kerr obtained reversal of a no-answer default judgment that, in the trial court, had hit the client with damages, attorney’s fees, imposition of a constructive trust, and declaratory relief, all arising out of the plaintiffs’ securities investment in an unrelated entity.

By the time FSC got the case, a restricted appeal was the only available appellate route. The Austin Court of Appeals reversed, agreeing that the defendant’s due-process rights were violated when, without notice, the plaintiffs took a default judgment: because the defendant had signed off on a preliminary injunction, she had made an appearance and was thus constitutionally entitled to notice of the requested judgment.

The unanimous decision in Schoendienst v. Haug, No. 03-12-00291-CV, will be published.