Deutsche Bank has won a restricted appeal to set aside a no-answer default judgment. The petition named the defendant as “DEUTSCHE BANK NATIONAL TRUST COMPANY, herein sued in its capacity as the Trustee for the Morgan Stanley ABS Capital 1 Inc., Trust 2006-NC5, Mortgage Pass Through Certificates, Series 2006-NC5.” But the clerk’s office issued a citation addressed to “Deutsche Bank National Trust Company as Trustee Company,” and that name was also used on the affidavit of service. Because the citation was addressed to the wrong party, the attempted service of process was invalid and the default judgment had to be set aside.
Deutsche Bank Nat’l Trust Co. v. Kingman Holdings, LLC, 05-14-00855-CV
Sylvester Davis sued TexPro Construction Group after the contractor failed to complete a backyard construction project. When TexPro failed to file an answer, Davis sought and obtained a partial default judgment on liability. TexPro then answered, but Davis moved forward with a hearing to establish damages. TexPro did not appear at the hearing, and the trial court awarded judgment for $117,230 in compensatory damages, treble damages under the DTPA and $350,000 in exemplary damages. After blowing through the deadlines for an ordinary appeal, TexPro hired new counsel and filed a restricted appeal. The Court of Appeals held that there was no error on the face of the record just because TexPro’s registered agent had been served at a location different from the address listed on the citation. The Court also held that there was no error in the trial court’s decision to move forward with the damages hearing, since the filing of TexPro’s answer did not negate the previously-signed default judgment on liability. However, Davis’ testimony on damages was the full amount of the money paid to TexPro, without accounting for the value of the work that TexPro had actually performed. Because his affidavit testimony was conclusory in alleging that the work done was valueless, the Court of Appeals reversed and remanded for a new trial on damages.
TexPro Constr. Group, LLC v. Davis, No. 05-14-00050-CV
Speed Boats of Texas brought suit against Fountain Powerboats and obtained a default judgment. Fountain then filed a restricted appeal in which it sought to set aside the default judgment by arguing that the record did not establish that the secretary of state served Fountain with process. The Court of Appeals agreed. Because the record did not “affirmatively show that the secretary of state forwarded a copy of the process to the defendant,” the Court set aside the default judgment and remanded the case back to the trial court.
Fountain Powerboats v. Speed Boats of Texas, No. 05-13-006570-CV
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
John Pride and Phareale Investments filed a restricted appeal from the district court’s grant of a no-answer default judgment against them. Among other things, the appellants argued that they should have been served with the plaintiffs’ first amended petition because it sought more onerous relief than the original petition that had been served on them. The record did not reflect that the amended petition had been served on either of the appellants, and the new pleading added claims against them for fraud, declaratory relief, and exemplary damages. Based on those additions, the court of appeals concluded that the failure to serve the appellants with the amended pleading meant that the trial court erred in entering a default judgment against them.
Curiously, the court of appeals mentions in a footnote that the restricted appeal had been abated for a period in order to let the district court dispose of some remaining issues that prevented the default judgment from being a final judgment. The court did not indicate why the appellants elected to proceed with the restricted appeal when they apparently could have still sought relief from the trial court to set aside the interlocutory default judgment, or why they did not pursue an appeal in the ordinary course after the judgment became final.
Pride v. Williams, No. 05-11-01189-CV
The court withdrew its previous opinion in this case, which dismissed the appeal for want of jurisdiction, and entered a new opinion affirming the trial court’s judgment denying Whitehead’s motion to vacate entry of a foreign judgment against him. The previous opinion held that Whitehead could not maintain a restricted appeal because he had participated in the hearing on the motion to vacate, despite not participating in the proceedings in Indiana that resulted in the underlying judgment. The new opinion holds that Whitehead’s lack of participation in the Indiana proceedings meets the relevant requirement to maintain a restricted appeal. The court affirmed the entry of the Indiana judgment, however, because there was no error by the Texas trial court. The certification of the Indiana judgment was accomplished by the stamped “certified copy” on the final page, meeting the authentication requirements of Texas Rule of Evidence 902.
Whitehead v. Bulldog Battery Corporation, No. 05-12-00449-CV (Memorandum Opinion on Rehearing)
HCBeck was hired to build a hall for a church. It subcontracted the foundation work to another company, B&R Development. After the building was completed, the hall began to have foundation problems, which cost HCBeck $68,976 to repair. HCBeck sued B&R for negligence and breach of contract, and obtained a no-answer default judgment. The company proved up the amount of its damages with an affidavit and supporting documentation, but the trial court did not hold an evidentiary hearing. On restricted appeal, the court of appeals reversed and remanded, holding that an evidentiary hearing was necessary because the damages sought by HCBeck were unliquidated. HCBeck’s affidavit was also inadequate to prove the claimed damages because the supporting documents totaled approximately $87,000, not the $68,976 that HCBeck sought for the default judgment. However, the court of appeals denied B&R’s request for a new trial on the merits because the company had never filed a motion for new trial in the district court. Accordingly, the remand was limited to the issue of HCBeck’s damages.
B&R Development , Inc. v. HCBeck, Ltd., No. 05-11-01150-CV
The court dismissed for lack of jurisdiction a restricted appeal from the entry of a foreign judgment. Bulldog received a judgment against Whitehead in Indiana after failing to answer a request for admissions or to appear at trial. Bulldog filed the Indiana judgment in a Texas district court pursuant to the Uniform Enforcement of Foreign Judgments Act and Whitehead moved to vacate. The court held a hearing at which both parties were represented by counsel and denied Whitehead’s motion on February 7, 2012. Whitehead filed a notice of restricted Appeal on April 4, 2012. The court of appeals dismissed the appeal for lack of jurisdiction because Whitehead fully participated in the hearing on his motion to vacate in the Texas court and because he failed to file his notice of appeal within 30 days after the judgment was signed.
Whitehead v. Bulldog Battery Corporation, No. 05-12-00449-CV
UPDATE: The court has withdrawn this opinion on rehearing.
The court of appeals has issued a short memorandum opinion in a restricted appeal following the trial court’s entry of a default judgment. Tejas Asset Holdings filed suit against a predecessor company of JPMorgan Chase, seeking a declaration that Chase’s deed of trust lien was invalid because it allegedly did not have Tejas’ original promissory note. Tejas attempted to serve Chase’s registered agent by certified mail, but neither the citation nor the proof of service were actually included in the clerk’s record, and the certified mail receipt was not sufficient to demonstrate service had actually occurred. Since the record did not show that any proper return of service was on file with the clerk at least ten days before the default judgment was entered, the court reversed the default and remanded the case for further proceedings.
JPMorgan Chase Bank, N.A. v. Tejas Asset Holdings, L.L.C., No. 05-11-00962