Substitute Service Survives Restricted Appeal

A pair of California residents sought to set aside a default judgment by means of a restricted appeal. The defendants claimed that the trial court lacked jurisdiction due to defective service of process, which had been accomplished through the Secretary of State. The Secretary of State’s certificate of service stated that process for both defendants had been “Unclaimed.” After the defendants failed to appear, the trial court entered default judgment for $612,500 in damages and another $13,258.27 in attorney fees. The Court of Appeals affirmed. Although the process server had listed the date of execution as taking place the month before he received the citation, that apparent typographical error was not enough to invalidate the return of service, particularly where the other service documents demonstrated the correct date of service. Substitute service through the Texas Secretary of State was also proper, the Court held, because the petition alleged that they were doing business in Texas by entering into a promissory note and guaranty with a Texas company, with the note also secured by real property located in Kaufman County. Nor did the “Unclaimed” notations demonstrate that the citations had not been served. Instead, the Court followed previous cases holding that it indicated only that the defendants had refused or failed to claim the citations from the Secretary of State’s mailings, not that service had not been accomplished.

Dole v. LSREF2 APEX 2, LLC, No. 05-12-01683-CV

Can’t “Refuse” Service on the Secretary of State

Big D appealed from the denial of its motion for new trial following a no-answer default judgment. The court of appeals found that the trial court properly refused to set aside the default judgment.  Big D did not prove that its failure to answer was not intentional or the result of conscious indifference but was due to a mistake or accident.  Rollins properly served Big D by substituted service on the secretary of state after seven failed attempts to serve Big D’s registered agent at the agent’s registered office and home.  The substitute service on the secretary of state was not rendered void by the process being returned with the notation “Refused” because the secretary is not an agent for serving but for receiving process on the defendant’s behalf.  Big D also failed to show that the evidence was insufficient to support the amount of damages awarded by the trial court.  The court of appeals found that the car owner’s testimony regarding the “Blue Book” value of her vehicle was not so weak that the finding of damages was clearly wrong and unjust.  Thus, the court of appeals affirmed the trial court’s judgment.

Big D Transmission v. Rollins, No. 05-11-01019

Details Matter

Karen Smith sued Brown Consulting & Associates, her employer, for injuries she sustained during the course of her employment.  BCA never appeared, and the trial court entered  default judgment in Smith’s favor.   On appeal, BCA argued that Smith failed to properly serve it, and that the default judgment should be voided.  The Court of Appeals agreed with BCA, finding that the affidavit Smith submitted in suport of her rule 106(b) motion for substitute service of process was defective for two reasons.  First, the affidavit did not contain a statement that BCA’s address was the usual place of business of the defendant or its registered agent.  Second, the affidavit did not contain a statement that the address is a place where the registered agent could probably be found.  Because the Court strictly construes the rules governing service when a default judgment is entered, it reversed the trial court’s entry of default judgment and remanded the case for further proceedings.

Brown Consulting v. Smith

21-Year-Old Default Judgment Revived

The court affirmed a summary judgment reviving a default judgment entered against Bartz in 1989. Randall brought this action to revive it in 2010, providing affidavit evidence purportedly showing that she procured a writ of execution to be served on Bartz at his last known address in 1999, thereby extending the time to revive and enforce the judgment until 2011. The court granted Randall’s motion for summary judgment, reviving the default judgment.

On appeal, Bartz argued that Randall failed to show that her revival action was timely. The court noted that Randall had the burden to show that a writ was prepared and issued by the court clerk and delivered to the proper officer for execution within the 10-year statutory time period. The evidence showed that Randall had a writ issued just inside of 10 years after the judgment and that the judgment thus became dormant in 2009, ten years after the writ issued. Randall’s action to revive the judgment was then filed less than two years after the judgment became dormant, so the action was timely. Finally, when the writ was returned due to a bad address Bartz supplied, Randall had no obligation under the statute extending the life of the judgment to ensure actual service.

Bartz v. Randall, No. 05-11-00836-CV

Defective Service

Few defendants are willing to take the risk of not answering a lawsuit when service of process has been defective.  After all, moving to quash service in Texas only gets you additional time to file an answer (see TRCP 122), and there is always the chance that a default judgment will be sustained if the attack on service is unsuccessful.  But whether by  luck or design, Bailey’s Furniture, Inc. has reversed the trial court’s entry of default judgment by challenging the plaintiff’s attempted service of process.  According to the process server’s affidavit, he had attempted to serve “Defendant Charles Bailey” on five occasions.  But while the petition identified Charles Bailey as the registered agent of Bailey’s Furniture, nothing in the process server’s affidavit indicated that he was being served in that capacity, and he was not in fact the defendant named in the lawsuit.  Because proper service had not been made prior to entry of the default judgment, the trial court never obtained personal jurisdiction over Bailey’s, rendering the judgment void.  The court of appeals therefore reversed and remanded the case to the district court for further proceedings.

Bailey’s Furniture, Inc. v. Graham-Rutledge & Co., No. 05-11-00710-CV