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Ny-Mac Enterprises, Inc. v. Orr

Court of Appeals of Texas, Sixth District, Texarkana

May 31, 2018

NY-MAC ENTERPRISES, INC., Appellant
v.
JORENE ORR, Appellee

          Submitted Date: May 30, 2018

          On Appeal from the 62nd District Court Hopkins County, Texas Trial Court No. CV43360

          Before Morriss, C.J., Moseley and Burgess, JJ.

          MEMORANDUM OPINION

          Josh R. Morriss, III Chief Justice

         Ny-Mac Enterprises, Inc., appeals the trial court's denial of a motion for new trial following the entry of a no-answer default judgment. Because the record demonstrates that Ny-Mac was not served in strict compliance with the rules of service of process, we vacate the trial court's default judgment and remand this case for further proceedings.

         Jorene Orr sued Ny-Mac on June 27, 2017, for breach of contract and alleged violations of the Texas Deceptive Trade Practices Act. On the same day, Orr requested that the district clerk accomplish service of citation and the petition on InCorp Services, Inc., Ny-Mac's registered agent for service of process in Texas. United States Postal Service (USPS) tracking showed that the citation and petition were delivered June 29, 2017, to "Front Desk/Reception" of InCorp Services, Inc. USPS's return receipt (green card) was returned July 3, 2017. Ny-Mac failed to answer, and on October 31, 2017, the trial court entered default judgment against Ny-Mac for $45, 295.00 in actual damages, plus $1, 333.00 in pre-judgment interest, $306.00 in court costs, and $2, 000.00 in attorney fees.

         After receiving notice of the default judgment, Ny-Mac timely filed a motion for new trial and asked the trial court to set aside its default judgment. The trial court denied Ny-Mac's motion for new trial.[1] On appeal, Ny-Mac argues that the default judgment cannot stand because citation was not properly served. We agree.

         For a default judgment to survive a direct attack, service of citation must have been obtained in strict compliance with the rules for such service. Ins. Co. of State of Pa. v. Lejeune, 297 S.W.3d 254, 255 (Tex. 2009) (per curiam); In re T.J.T., 486 S.W.3d 675, 678-79 (Tex. App.- Texarkana 2016, no pet.). Failure to comply with rules for service of citation makes such attempted service void. T.J.T., 486 S.W.3d at 679; Devine v. Duree, 616 S.W.2d 439, 441 (Tex. Civ. App.-Dallas 1981, writ dism'd by agr.). Therefore, deviation from those rules requires a resulting default judgment to be set aside. T.J.T., 486 S.W.3d at 678. Without proper service, even actual notice to a defendant will not support default judgment. Greystar, LLC v. Adams, 426 S.W.3d 861, 867 (Tex. App.-Dallas 2014, no pet.).

         In "a direct attack upon a default judgment, the ordinary presumptions in support of valid service that are raised in a judgment addressed to the merits do not apply." T.J.T., 486 S.W.3d at 678 (quoting Harmon Truck Lines, Inc. v. Steele, 836 S.W.2d 262, 263 (Tex. App.-Texarkana 1992, writ dism'd)). When the record does not reflect strict compliance with rules of service, it will not support a default judgment. Id. at 678-79 (quoting Harmon Truck Lines, Inc., 836 S.W.2d at 263).

         Even a corporation serving as a registered agent for another corporation can be served only by service on the agency corporation's authorized agents. Reed Elsevier, Inc. v. Carrollton-Farmers Branch Indep. Sch. Dist., 180 S.W.3d 903, 905 (Tex. App.-Dallas 2005, pet. denied).

         To support a default judgment, the record must show that an individual that was served for a corporation was in fact authorized or held an office that carried such authority, such as "president, vice president, or registered agent." W. Garry Waldrop DDS, Inc. v. Pham, No. 14-15-00747-CV, 2016 WL 4921588, at *3 (Tex. App.-Houston [14th Dist.] Sept. 15, 2016, no pet.) (mem. op.) (citing Reed Elsevier, Inc., 180 S.W.3d at 905 (holding service was improper when return did not indicate capacity or authority of person actually served)).

         Here, the return of service does not reflect compliance with the rules of service of process. See Tex. R. Civ. P. 107(c) (return must contain addressee's signature). The green card, although reflecting delivery to the address for InCorp Services, Inc., was signed by Jason Casey with no indication of Casey's capacity to accept the service. Where, as here, both the "Agent" and Addressee" boxes were left unchecked on the green card, the record does not indicate Casey's connection, if any, with InCorp Services, Inc. See Alamo Home Fin., Inc. v. Duran, No. 13-14-00462-CV, 2015 WL 4381091, at *5 (Tex. App.-Corpus Christi July 16, 2015) (mem. op.). Accordingly, "[t]he record, on its face, shows that the return was not signed by the addressee or agent." Id. (citing Tex.R.Civ.P. 107; All Commercial Floors, Inc. v. Barton & Rasor, 97 S.W.3d 723, 726 (Tex. App.-Fort Worth 2003, no pet.)); see Landmark Org., L.P. v. Sunbelt Air Conditioning & Refrigeration Serv., Inc., No. 13-08-00676-CV, 2010 WL 2784032, at *4 (Tex. App.-Corpus Christi July 15, 2010, no pet.) (mem. op.); Sw. Sec. Servs., Inc. v. Gamboa, 172 S.W.3d 90, 93 (Tex. App.-El Paso 2005, no pet.). With no record indication of Casey's capacity to receive service, and thus no indication of strict compliance with Rule 107, default judgment was improper. See Reed Elsevier, Inc., 180 S.W.3d at 905.

          Because Ny-Mac was not served in strict compliance with the rules for service of process, we vacate the default judgment and remand the case ...


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