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Menon v. Water Splash, Inc.

Court of Appeals of Texas, Fourteenth District

January 9, 2018

TARA MENON, Appellant
v.
WATER SPLASH, INC., Appellee

         On Appeal from the 212th District Court Galveston County, Texas Trial Court Cause No. 13-CV-0205

          Panel consists of Justices Christopher, Donovan, and Wise.

          MEMORANDUM OPINION

          Tracy Christopher Justice.

         This case, an appeal from a no-answer default judgment, is before us on remand from the United States Supreme Court, which held that Article 10(a) of the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters ("the Hague Service Convention")[1] permits service of process abroad by direct mail to the person to be served if (a) the receiving state does not object, and (b) the service is authorized by otherwise-applicable law. Water Splash, Inc. v. Menon, __U.S.__, 137 S.Ct. 1504, 1513, 197 L.Ed.2d 826 (2017). On remand, defendant/appellant Tara Menon, a resident of Québec, Canada, argues that the service upon her satisfied neither requirement.

         The question of whether the receiving state objects to service abroad is not before us on remand because it already has been established that Canada does not object to service by mail under Article 10(a). We conclude, however, that Menon has adequately preserved, and has not waived, her new argument that under Texas Rule of Civil Procedure 103, the person who served her-a legal assistant employed by plaintiff/appellee Water Splash, Inc.'s trial counsel-was not authorized to do so. We therefore hold that the trial court abused its discretion in denying Menon's motion for new trial. We reverse the default judgment against Menon and remand the case for further proceedings consistent with this opinion.

         I. Background

         Québec resident Tara Menon formerly was the North Texas regional sales representative for Water Splash, Inc., which manufactures "aquatic playground systems" known as "splash pads." Water Splash alleges that while working for Water Splash, Menon also was working as sales manager for South Pool and Spa, Inc. and that the two conspired to steal Water Splash's designs and propriety information for conversion to their own use.

         Water Splash sued Menon, South Pool, and South Pool's owner Muhammad Tello in a Galveston County district court for conversion, quantum meruit, violations of the Texas Theft Liability Act, tortious interference with prospective business relations, conspiracy, fraud, and negligent misrepresentation. Water Splash pleaded an additional claim against Menon for breach of fiduciary duty.

         After attempting service on Menon unsuccessfully through the Texas Secretary of State, Water Splash filed a motion for substituted service pursuant to Article 10(a) of the Hague Service Convention, which states, in the English version, "Provided the State of destination does not object, the present Convention shall not interfere with . . . the freedom to send judicial documents, by postal channels, directly to persons abroad . . . ." Water Splash correctly pointed out that Canada does not object to service under Article 10(a).[2] Service pursuant to the Hague Service Convention is permitted under Texas Rule of Civil Procedure 108a, which states, "Service of process may be effected upon a party in a foreign country if service of the citation and petition is made . . . pursuant to the terms and provisions of any applicable treaty or convention . . . ." Tex.R.Civ.P. 108a(1)(d).

         The trial court granted the motion and rendered an order permitting service by publication, by first class mail, by certified mail with return receipt requested, by Federal Express, and by email to four of Menon's last-known email addresses.

         A couple of months later, Water Splash moved for default judgment on liability and damages. Water Splash stated in its motion that at the time of the hearing on the motion, proof of service would have been on file for at least ten days. As proof of service, Water Splash attached the affidavit of Nancy Jacobs, a legal assistant with the law firm of Water Splash's trial counsel, Hawash Meade Gaston Neese & Cicack LLP. Jacobs attested that she attempted to notify Menon of the suit in accordance with the trial court's order for substituted service by sending copies of the original petition, the first amended petition, and the order of substituted service to Menon via registered mail, Federal Express, and email.[3] The day before the hearing on the motion for default judgment, Water Splash filed a supplemental motion asking for a permanent injunction and exemplary damages.

         At the hearing the next day, the trial court granted the motions and awarded Water Splash actual damages of $60, 000, exemplary damages of $60, 000, attorney's fees of $9, 500 through trial, and conditional appellate attorney's fees of up to $22, 500. The trial court also permanently enjoined Menon from engaging in a variety of acts of unfair competition.

         Menon moved for a new trial, arguing that service was defective for three reasons: (1) service by mail does not comport with Article 10(a) of the Hague Service Convention because Québec requires requests for service to be sent to its Central Authority, [4] (2) there is no indication that she actually received or evaded service, and (3) service by email is improper. She argued in the alternative that even if the service was not defective, she was entitled to a new trial because all of the criteria stated in Craddock v. Sunshine Bus Lines, Inc.[5] for setting aside a default judgment were satisfied. After the trial court denied Menon's motion for new trial, Water Splash dismissed the other defendants with prejudice, and Menon appealed the rulings against her.

         When the case was first before us, Menon did not reurge most of the arguments made in her motion for new trial, but instead stated, "If Article 10(a) authorizes service of process by a litigant mailing or emailing documents directly to a party, without going through the Central Authority of the receiving nation, then the service in this case was good;" but if not, then the service was defective. She argued that because Article 10(a) used the word "send" rather than "serve, " it did not apply to service of process, and thus, service of process under the Hague Service Convention does not include service by mail. A ...


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