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Propel Financial Services, LLC v. Conquer Land Utilities, LLC

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

April 18, 2019

PROPEL FINANCIAL SERVICES, LLC, Appellant,
v.
CONQUER LAND UTILITIES, LLC, Appellee.

          On appeal from the 206th District Court of Hidalgo County, Texas.

          Before Justices Benavides, Longoria, and Hinojosa

          OPINION

          LETICIA HINOJOSA JUSTICE

         Appellant Propel Financial Services, LLC (Propel) appeals a no-answer default judgment in favor of appellee Conquer Land Utilities, LLC (Conquer), awarding $13, 000, 000 in damages, and post-judgment orders granting turnover relief and appointing a receiver.[1] By three issues, Propel argues that: (1) the default judgment should be set aside by restricted appeal because error appears on the face of the record; and the trial court abused its discretion in (2) ordering turnover relief and (3) appointing a receiver. We reverse and remand.

         I. Background

         Propel loaned Conquer $47, 383.68. The loan was secured by a twelve-acre tract of land located in Hidalgo City, Texas. After Conquer defaulted on the loan, Propel sold the property at a foreclosure sale. Conquer sued Propel, alleging that Propel wrongfully foreclosed on the property and sold the property for only 5% of its appraised value.

         A. Service of Citation

         Conquer filed its original petition on November 1, 2017. The petition identified Kohm & Associates, P.C., as Propel's registered agent for service of process. Conquer requested that the Hidalgo County District Clerk issue a citation to Propel and serve the citation and petition by certified mail, return receipt requested. See Tex. R. Civ. P. 103, 106. The citation was directed to "Propel Financial Services, LLC c/o Kohm & Associates, PC."[2] On November 9, the clerk filed the following digital return receipt from the United States Postal Service (USPS):[3]

         (Image Omitted)

         The digital return receipt contained the following reference identification:

         (Image Omitted)

         B. Default Judgment

         Propel failed to file an answer to the suit, and Conquer moved for default judgment. The motion was heard on December 4, 2017. At the hearing, Conquer's counsel informed the trial court that "the return of service has been filed with the Court since November 9th." Conquer then presented the testimony of Francisco Xavier Badir Vasquez Rezzah (Rezzah), Conquer's managing member. Rezzah testified that the value of the foreclosed property was $4, 000, 000. He based his valuation on a "2008 or 2009" appraisal of $3, 000, 080.[4] Rezzah stated that he planned to develop two hotels and a commercial shopping center on the property. He estimated that "the loss of not being able to develop [on] this land is about $15, 000, 000 and $20, 000, 000." Rezzah requested the trial court award $13, 000, 000 in damages, which he represented to be "the value of the property plus some of the lost income or some of the lost profits" for the planned development.

         The trial court rendered a default judgment in favor of Conquer and awarded $13, 000, 000 in damages.

         C. Amended Proof of Service

         On January 29, 2018, Conquer filed a motion to amend the proof of service pursuant to Texas Rule of Civil Procedure 118. See Tex. R. Civ. P. 118 (providing for the amendment of process or proof of service). The trial court granted the motion, and the ...


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