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Authentic Brands Group LLC v. Porter

Court of Appeals of Texas, Fourteenth District

July 11, 2017

AUTHENTIC BRANDS GROUP LLC, SUCCESSOR IN INTEREST TO JUICY COUTURE, INC. AND KATE SPADE & COMPANY, SUCCESSOR IN INTEREST TO FIFTH & PACIFIC, Appellants
v.
MONTRAY PORTER, Appellee

         On Appeal from the 61st District Court Harris County, Texas Trial Court Cause No. 2014-72290

          Panel consists of Justices Christopher, Jamison, and Donovan.

          MEMORANDUM OPINION

          Martha Hill Jamison Justice.

         Appellants, Authentic Brands Group LLC and Kate Spade & Company, file this restricted appeal from a default judgment favoring Montray Porter in Porter's personal injury lawsuit. The trial court awarded Porter $270, 000. In two issues, appellants contend that (1) the trial court lacked personal jurisdiction over them because the record does not demonstrate proper service of citation, and (2) the evidence is legally and factually insufficient to support the award of medical expenses. Because the record does not demonstrate that the trial court obtained personal jurisdiction over the appellants, we reverse and remand for further proceedings.

         Restricted Appeal

         To prevail in a restricted appeal, appellants are required to establish that (1) they filed notice of the restricted appeal within six months after the judgment was signed, (2) they were parties to the underlying lawsuit, (3) they did not participate in the hearing that resulted in the challenged judgment and did not timely file any postjudgment motions or requests for findings of fact and conclusions of law, and (4) error is apparent on the face of the record. Alexander v. Lynda's Boutique, 134 S.W.3d 845, 848 (Tex. 2004); Air Voice Wireless, LLC v. M&E Endeavours LLC, No. 14-15-00548-CV, 2016 WL 5342707, at *3 (Tex. App.-Houston [14th Dist.] Sept. 22, 2016, no pet.) (mem. op.). For purposes of a restricted appeal, the record consists of all papers on file in the appeal. Air Voice Wireless, 2016 WL 5342707, at *3.

         It is undisputed that appellants were named parties in the underlying lawsuit and filed their notice of restricted appeal within six months of the judgment being signed. The record further reflects appellants did not participate in the hearing that resulted in the default judgment and did not timely file any postjudgment motions or requests for findings of fact and conclusions of law. Accordingly, the only question remaining is whether error was apparent on the face of the record. See id.

         Service of Process

         As stated, appellants assert in their first issue that the record does not establish that they were properly served. The Texas Supreme Court has "required that strict compliance with the rules for service of citation affirmatively appear on the record in order for a default judgment to withstand direct attack." Primate Constr., Inc. v. Silver, 884 S.W.2d 151, 152 (Tex. 1994) (per curiam); see also Wilson v. Dunn, 800 S.W.2d 833, 836 (Tex. 1990) ("For well over a century the rule has been firmly established in this state that a default judgment cannot withstand direct attack by a defendant who complains that he was not served in strict compliance with applicable requirements."). When a default judgment is challenged by restricted appeal, there are no presumptions in favor of valid issuance, service, or return of citation. See Wachovia Bank of Del., N.A. v. Gilliam, 215 S.W.3d 848, 848 (Tex. 2007) (per curiam); Air Voice Wireless, 2016 WL 5342707, at *3. If the record does not show strict compliance with the rules governing issuance, service, and return of citation, the attempted service of process is invalid and the trial court has no personal jurisdiction over a defendant. Air Voice Wireless, 2016 WL 5342707, at *3. Moreover, virtually any deviation from these rules is sufficient to set aside the default judgment in a restricted appeal. Id.

         Porter asserts that she properly served appellants twice, once on their registered agents by certified mail and once through substitute service on the Texas Secretary of State as approved by the trial court. The record does not support either contention.

         We begin with Porter's contention that she served appellants' registered agents. Foreign corporations, such as appellants, may register with the Texas Secretary of State, and are sometimes required to register, in order to do business in the State of Texas. See Tex. Tex. Bus. Orgs. Code §§ 9.001-.004. To register, a corporation must provide the name and address of a registered agent for service of process. Id. § 9.004. A recital in a petition that a named person or entity is the registered agent for service on a defendant is prima facie evidence of that fact and may be sufficient to support a default judgment unless the defaulted defendant proves otherwise. Conseco Fin. Servicing Corp. v. Klein I.S.D., 78 S.W.3d 666, 671 (Tex. App.-Houston [14th Dist.] 2002, no pet.). A return of service showing delivery of process to a registered agent is also prima facie evidence that the person served is in fact an authorized agent. Izen v. Sjostrom, No. 14-06-00142-CV, 2007 WL 968841, at *3 (Tex. App.-Houston [14th Dist.] Apr. 3, 2007, no pet.) (mem. op.) (citing Pleasant Homes, Inc. v. Allied Bank of Dallas, 776 S.W.2d 153, 154 (Tex. 1989)).

         Here, Porter contends that she identified appellants' registered agents in her petition and served them by certified mail; however, several items in the record refute the latter contention. First, when a citation is served by return or certified mail, the return of service by the officer executing the citation must contain the return receipt with the addressee's visible signature, but here, the return receipts for delivery to appellants' agents contained no signatures. See Tex. R. Civ. P. 107(c); MYRMAC Corp. v. P.H., No. 02-16-00319-CV, 2017 WL 1173841, at *2 (Tex. App.-Fort Worth Mar. 30, 2017, no pet.) (mem. op.). Second, the record reflects that the mailing to Kate Spade's registered agent was actually returned as "Undeliverable as Addressed." And lastly, Porter expressly represented to the trial court in her motions for substituted service that the original attempts to serve appellants were unsuccessful.

         The record reflects that Porter did, in fact, attempt substitute service on appellants through the Texas Secretary of State, as approved by the trial court pursuant to Texas Rule of Civil Procedure 106(b)(2) and Texas Business Organizations Code sections 5.251 to 5.253. While the record reflects that service was successfully had on the secretary, the record does not, however, reflect that the secretary forwarded citation to appellants.

         The supreme court has consistently held that when a long-arm jurisdictional statute requires the secretary to forward citation to the defendant, the record must affirmatively demonstrate that the citation was in fact forwarded in order to support a default judgment. See, e.g., Wachovia, 215 S.W.3d. at 849-50; Whitney v. L & L Realty Corp., 500 S.W.2d 94, 96 (Tex. 1973). This court, among others, has concluded that this requirement pertains to the long-arm statute at issue in this case, Business Organizations Code sections 5.251 to 5.253. See Rooftop Grp. USA, Inc. v. Shopper Events LLC, No. 14-15-01040-CV, 2017 WL 2125648, at *2 (Tex. App.-Houston [14th Dist.] May 16, 2017) (mem. op.); MC Phase II Owner, LLC v. TI Shopping Ctr., LLC, 477 S.W.3d 489, 492-94 (Tex. App.-Amarillo 2015, no pet.); El Paisano Nw. Highway, Inc. v. Arzate, No. 05-12-01457-CV, 2014 WL 1477701, at *3 (Tex. App.-Dallas Apr. 14, 2014, no pet.) (mem. op.); BLS Dev., LLC v. Lopez, 359 S.W.3d 824, 828 (Tex. App.-Eastland 2012, no pet.); see also Wachovia, 215 S.W.3d. at 849 & n.1 (including sections 5.251 to 5.253 in list of statutes requiring secretary to forward service to the defendant). Proof of forwarding is typically accomplished by including a certificate from the secretary of state in the record, which generally conclusively establishes that citation was forwarded to the ...


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