Opinion
No. 05-17-01412-CV
05-30-2019
PRIMESTAR CONSTRUCTION, INC., Appellant v. DELLEW CORPORATION, Appellee
On Appeal from the County Court at Law No. 5 Dallas County, Texas
Trial Court Cause No. CC-17-01057-E
MEMORANDUM OPINION
Before Justices Myers, Molberg, and Osborne
Opinion by Justice Myers
Primestar Construction, Inc. appeals the default judgment rendered against it and in favor of Dellew Corporation. Primestar brings two issues on appeal contending (1) the trial court erred by granting Dellew's motion for default judgment and by not granting Primestar's motion for new trial because Primestar was not properly served; and (2) no evidence in the record supports the judgment because there is no reporter's record from the hearing on the motion for default judgment. We affirm the trial court's judgment.
I. Background and Procedural History
On February 28, 2017 Dellew filed a suit on a sworn account against Primestar based on an agreement between the parties that Dellew would provide "goods, wares, merchandise and/or services" to Primestar in exchange for payment. Dellew alleged it fully performed its obligations under the agreement; however, Primestar failed to pay. Dellew hired a private process server, Doyle England, to serve Primestar through its registered agent, Felicia James. England attempted to serve James at her address listed with the Secretary of State's office on four occasions. On the first attempt, England spoke with a boy who said James was not there. On the second attempt, a boy said James was not there and that she had gone to the store. On the third and fourth attempts, England knocked, but there was no answer. On May 10, 2017, after the fourth failed attempt at service, Dellew served Primestar through the Texas Secretary of State. The Whitney Certificate was filed on May 22, 2017.
In Whitney v. L & L Realty Corp., 500 S.W.2d 94 (Tex. 1973), the plaintiff took a default judgment against the defendants after serving them via the Secretary of State. The Texas Supreme Court ruled that the record before the trial court must have a certificate from the Secretary of State certifying that it had forwarded a copy of the citation to the defendant and, without such a showing, the trial court did not have jurisdiction over the defendant. Id. at 95-96. Such a certificate has become known as a Whitney Certificate.
On September 12, 2017, Dellew filed a motion for default judgment. The motion stated that the citation was served by the Secretary of State by certified mail, return receipt requested, the citation and proof of service were on file with the court, the deadline for Primestar to file an answer had expired, and Primestar had not filed an answer. Further, the motion stated that the damages in the petition were liquidated and proven by written instrument such that no hearing was necessary. On September 14, 2017, the trial court signed a default judgment in favor of Dellew. On October 13, 2017, Primestar filed a motion for new trial that was overruled by operation of law. See TEX. R. CIV. P. 329b(c). On December 6, 2017 Primestar timely filed this appeal.
Appellant filed this appeal as a restricted appeal; however, it was timely filed and therefore a restricted appeal is not necessary. See TEX. R. APP. P. 26.1(a) (if any party timely files a motion for new trial, notice of appeal is due 90 days after judgment is signed).
II. Discussion
A. Standard of Review
In its first issue, Primestar contends it was not properly served because there is no evidence that Dellew attempted personal service on Primestar's registered agent before seeking service through the Secretary of State.
We review a trial court's denial of a motion for new trial after a default judgment for abuse of discretion. See, e.g., MobileVision Imaging Serv., L.L.C. v. LifeCare Hosp. of N. Tex., L.P., 260 S.W.3d 561, 564 (Tex. App.—Dallas 2008, no pet.) (citing In re R.R., 209 S.W.3d 112, 114 (Tex. 2006) (per curiam)). A trial court abuses its discretion if it acts in an unreasonable or arbitrary manner or without reference to any guiding rules and principles. Litman v. Litman, 402 S.W.3d 280, 285 (Tex. App.—Dallas 2013, pet. denied).
B. Service of Citation
For a default judgment to withstand direct attack on appeal, strict compliance with the rules governing service of process must affirmatively appear on the face of the record. See Wilson v. Dunn, 800 S.W.2d 833, 836 (Tex. 1990). "There are no presumptions in favor of valid issuance, service, and return of citation in the face of a [direct] attack on a default judgment." Id. at 836 (quoting Uvalde Country Club v. Martin Linen Supply Co., 690 S.W.2d 884, 885 (Tex. 1985) (per curiam)). If the record on appeal fails to affirmatively show strict compliance with the rules of civil procedure governing service of citation, the attempted service of process is invalid and of no effect. See Uvalde Country Club v. Martin Linen Supply Co., 690 S.W.2d 884, 885 (Tex. 1985) (per curiam). Any failure to comply with the rules renders the attempted service of process invalid, and the trial court acquires no personal jurisdiction over the defendant. Lytle v. Cunningham, 261 S.W.3d 837, 839-40 (Tex. App.—Dallas 2008, no pet.). A judgment based on improper service is void. Id.
When, as here, the defendant's registered agent cannot be found at its registered address with reasonable diligence, the plaintiff is permitted to seek substituted service on the Secretary of State. See TEX. BUS. ORGS. CODE ANN. § 5.251(1)(B). Service of process on the Secretary of State is accomplished by delivering duplicate copies of the process and any required fee. See id. § 5.252. Thereafter, the Secretary of State shall forward the process to the entity's most recent address on file with the Secretary of State by certified mail, return receipt requested. See id § 5.253. The Secretary may issue a certificate of service known as a Whitney Certificate. "Absent fraud or mistake, the Secretary of State's certificate is conclusive evidence that the Secretary of State, as agent of [the defendant], received service of process for [the defendant] and forwarded the service as required by the statute." Capital Brick, Inc. v. Fleming Mfg. Co., 722 S.W.2d 399, 401 (Tex. 1986).
Primestar argues service through the Secretary of State was ineffectual because "there is no evidence in the record that Appellee ever attempted personal service upon the registered agent for Appellant or any of the officers of Appellant's corporation." However, England's affidavit of due diligence states that he attempted service at Primestar's registered agent's address on four separate dates, each at different times. We conclude the trial court did not err by determining Dellew acted with reasonable diligence to serve Primestar's registered agent before serving Primestar through the Secretary of State.
Primestar argues England's affidavit failed to show Dellew failed to attempt service on Dellew's officers before resorting to service through the Secretary of State. Section 5.251 of the Business Organizations Code does not require a plaintiff to attempt to serve a defendant's officers before serving a defendant through the Secretary of State. See BUS. ORGS. § 5.251(1)(B).
Primestar also argues England's affidavit is defective because it does not show the statements in the affidavit are based on England's personal knowledge. An affidavit must be made on personal knowledge. Humphreys v. Caldwell, 888 S.W.2d 469, 470-71 (Tex. 1994) (per curiam). But it need not explicitly state that it is made on "personal knowledge," if it is otherwise clear that the affiant is testifying based on personal knowledge. Churchill v. Mayo, 224 S.W.3d 340, 346 (Tex. App.—Houston [1st Dist.] 2006, pet. denied). England's affidavit describes the actions he took and what people said to him. These matters are necessarily within his personal knowledge.
England's affidavit demonstrated sufficient diligence to permit Dellew to serve Primestar through the Secretary of State. The record shows a Whitney Certificate was issued by the Secretary of State and filed in the clerk's record more than ten days before the default judgment was entered, as is required by Texas Rule of Civil Procedure 107(h). Once the Whitney Certificate was filed, it dispensed with any service requirements and was also conclusive proof that citation had been forwarded as required by section 5.252 of the Texas Business Organizations Code. Campus Invs., Inc. v. Cullever, 144 S.W.3d 464, 466 (Tex. 2004) (per curiam) (citing Capitol Brick, Inc., 722 S.W.2d at 401); Bank Repossessed Car Co. v. Who's Calling, Inc., No. 14-05-01251-CV, 2007 WL 2481168, at *2 (Tex. App.—Houston [14th Dist.] Sept. 4, 2007, no pet.) (mem. op.). The record affirmatively shows that, at the time default judgment was rendered, citation was properly served and returned. See Campus Invs., 144 S.W.3d at 466. We overrule Primestar's first issue.
C. Absence of Reporter's Record
In its second issue, Primestar contends there is no evidence in the appellate record to sustain the judgment. Dellew pleaded a suit on a sworn account and attached documents supporting the account. Primestar did not file an answer under oath denying the claim. Therefore, Primestar "shall not be permitted to deny the claim, or any item therein." TEX. R. CIV. P. 185.
Primestar argues the judgment is reversible because there was no reporter's record made of the default-judgment hearing. Primestar cites Carstar Collision, Inc. v. Mercury Finance Co., 23 S.W.3d 368 (Tex. App.—Houston [1st Dist.] 1999, pet. denied). In that case, Mercury Finance sued Carstar Collision for possession of an automobile, and Carstar Collision filed a counterclaim for conversion. Id. at 369. Carstar Collision did not appear for trial, and Mercury Finance moved for a post-answer default judgment. Id. The trial court granted the default judgment. Id. The court reporter did not record the testimony at the hearing. Id. at 370. The court of appeals stated,
If a defendant has both an answer on the merits and a counterclaim on file, failure to appear at trial does not constitute an abandonment of its pleadings. In such an event, the plaintiff is not entitled to a judgment on the pleadings and must proceed to trial and prove its case. If the judgment is rendered after presentation of evidence to the court in the absence of the appellant and his attorney, the failure to have the court reporter present to make a record constitutes reversible error. Such an error is not harmless because, without a reporter's record, this Court is unable to determine if sufficient evidence was submitted to support the judgment.Id. (citations omitted). Unlike Carstar, this case involves a no-answer default judgment on a suit on a sworn account. Primestar had no pleadings. The reasoning in Carstar does not apply to no-answer default judgments. See Rooftop Group USA, Inc. v. Shopper Events LLC, No. 14-15-01040-CV, 2017 WL 2125648, at *5 (Tex. App.—Houston [14th Dist.] May 16, 2016, pet. denied) (mem. op.). Therefore, Carstar does not apply to this case. No reporter's record is necessary to uphold on appeal a no-answer default judgment on a suit on a sworn account. See Mantis v. Resz, 5 S.W.3d 388, 392 (Tex. App.—Fort Worth 1999, pet. denied), overruled on other grounds by Sheldon v. Emergency Med. Consultants, I, P.A., 43 S.W.3d 701, 702 n.2 (Tex. App.—Fort Worth 2001, no pet.) (overruling statement that theory of misnomer tolls statute of limitations).
Primestar also cites Smith v. Smith, 544 S.W.2d 121 (Tex. 1976), and Sharif v. Par Tech, Inc., 135 S.W.3d 869 (Tex. App.—Houston [1st Dist.] 2004, no pet.), for the proposition that a default judgment for which there is no reporter's record of the hearing is reversible. However, both of those cases involved post-answer default judgments, not no-answer default judgments from suits on sworn accounts. See Smith, 544 S.W.2d at 122; Sharif, 135 S.W.3d at 872 (post-answer default from suit on sworn account to which defendant had filed verified denial of the claim). These cases do not support Primestar's argument.
Aside from the argument that there was no reporter's record, Primestar makes no argument explaining why there was no evidence. Primestar does not argue that Dellew's petition and attachments did not meet the requirements for a suit on a sworn account.
We conclude Primestar has not shown that no evidence supports the judgment. We overrule Primestar's second issue.
D. Conclusion
We affirm the trial court's judgment.
/Lana Myers/
LANA MYERS
JUSTICE 171412F.P05
JUDGMENT
On Appeal from the County Court at Law No. 5, Dallas County, Texas
Trial Court Cause No. CC-17-01057-E.
Opinion delivered by Justice Myers. Justices Molberg and Osborne participating.
In accordance with this Court's opinion of this date, the judgment of the trial court is AFFIRMED.
It is ORDERED that appellee DELLEW CORPORATION recover its costs of this appeal from appellant PRIMESTAR CONSTRUCTION, INC. Judgment entered this 30th day of May, 2019.