Bailey's Furniture, Inc. v. Graham-Rutledge & Company

Opinion

_______

REVERSE and REMAND; Opinion Filed l)ecember 13, 2012

In The (!Eourt of Ztppeat jf iftlj JOitritt of ZEtxa at afta No.05-11-0071 0-CV

BAILEY’S FURNITURE, INC., Appellant

V.

GRAHAM-RUTLEDGE & COMPANY, Appellee

On Appeal from the 191st Judicial District Court Dallas County, Texas Trial Court Cause No. DC11-02523-J

MEMORANDUM OPINION

Before Justices O’Neill, Francis, and Murphy Opinion by Justice Francis

Bailey’s Furniture, Inc. appeals a no-answer default judgment against it in a breach of

contract suit brought by Graham-Rutledge & Company. In two issues, Bailey’s argues the trial

court lacked personal jurisdiction to render the default judgment because service of process was

defective and, alternatively, the trial court abused its discretion in denying its motion for new

trial. Because we agree that service was defective, we reverse the trial court’s judgment and

remand for further proceedings.

Graham-Rutledge alleged it had an exclusive listing agreement with Bailey’s to market a

commercial property in Dallas and that Bailey’s sold the property without paying the real estate commission provided br in the agreement. Graham—Rutledge sued Bailey’s and two parties ‘ho

represented the buyer of the property. The petition alleged that l3ailev’s could be served by

serving its registered agent, Charles Bailey. at 3910 West Camp Wisdom Road. Dallas, Texas,

75237-2425. After making four unsuccessful attempts at service, Graham-Rutledge filed a

motion for substituted service supported by the affidavit of the process server. Brandon

Parraway. In his affidavit, Parraway asserted the following:

“On JULY 28TH, 2010. 1 received the PLAINTIFF’S ORIGINAL PETITION, attached. for service upon Defendant. CHARLES BAILEY, 3910 WEST CAMP WISDOM ROAD, DALLAS, TX, 75237, which is Defendant’s usual place of abode/business, and/or a place where Defendant can he found.”

Thereafter, Parraway described his four unsuccessful attempts to execute service of

process. The affidavit then provided:

“No further attempts at delivery of process v-crc conducted by me. and there has been no contact with/from Defendant. CHARLES BAILEY.

“1 believe further attempts to serve Defendant. CHARLES BAILEY, by personal delivery would be unsuccessful and substituted service would be reasonably effective in giving Defendant, CHARLES BAILEY, notice of this suit by delivering the PLAINTIFF’S ORIGINAL PETITION, attached at the address identified as, CHARLES BAILEY, 3910 WEST CAMP WISDOM ROAD, DALLAS, TX, 75237. By serving anyone over the age of sixteen years old living/employed at the above mentioned residence/business, or;

2. By properly affixing to the front entranceway/front gatepost of the above mentioned residence/usual place of business.

The trial court granted the motion and signed an order authorizing that Bailey’s be served

by “affixing the citation, original petition, and order on the front door of the place of business of Bailey’s Furniture located at 391 0 West (‘amp Wisdom Road. Dallas. Texas 73237.” Parra\ av

executed a return of service showing that he affixed the citation. original petition. discovery, and

order on motion for substituted service “on the front door of the place of business of Bailey’s

Furniture, Inc.” located at the West Camp Wisdom road address.

For reasons not necessary to this appeal. Bailey’s did not tile an answer. The trial court

then rendered an interlocutory default judgment against Bailey’s and awarded Graham—Rutledge

$48,238.98 for the breach of contract and $1950 in attorney’s fees. Bailey’s flied a motion for

new trial arguing service of process was defective. The trial court denied the motion and then

severed the case against Bailey’s. making the default judgment against it final After the

severance. Bailey’s filed an amended motion fbr nev trial, which was denied. This appeal

ensued.

Before a trial court may properly render a default judgment, the record must reflect the

trial court has jurisdiction over the subject matter and the parties and the case is ripe for

judgment. unlay v. .Jones. 435 S.W.2d 136, 138 (Tex. 1968): TJai’rot Cominc ‘ns, Inc. v. 101112 &

Counlrv P ‘ship. 227 S.W.3d 372. 376 (Tex. App.—llouston [1st Dist.1 2007. pet. denied).

Unless the record affirmatively shows, “at the time the default judgment is entered,” either an

appearance by the defendant, proper service of citation, or a written memorandum of waiver, the

trial court does not have in personarn jurisdiction to render a default judgment against the

defendant . Marrol Coinmc ‘us. 227 S.W.3d at 376. Even actual notice to a defendant after

defective service is “not sufficient to convey upon the court jurisdiction to render default

judgment against him.” Wilson v. Dunn, 800 S.W.2d 833, 836 (Tex. 1990).

Texas Rule of Civil Procedure 1 06 allows the trial court to sign an order authorizing a

substitute method of service, provided the plaintiff files a motion supported by proper affidavit. Lx. R. Civ. P. 106(h: S/u/c Ith,n i7rc’ & ( as ( u. . Cost/er. 868 S.W.2d 298. 298—99 (1 cx.

1 993) (per curiarn). The supporting affIdavit must state (1) “the location of the defendant’s usual

place of business or usual place of abode or other place where the defendant can probably be

found” and (2) the specific thcts showing that traditional service has been attempted “at the

location named in such aflidavit hut has not been successful.” TEx. R. Civ. P. 106(b). Failure to

affirinativelv show strict compliance with this rule renders the attempted service of process

invalid and of no effect. Wi/son, 800 S.W.2d at 836. There are no presumptions favoring valid

issuance, service, and return of citation in the face of a direct attack on a default judgment. Id.

Here. service was sought upon Bailey’s Furniture, but the affidavit upon which the trial

court based its decision to order substituted service identified the defendant as Charles Bailey.

We recognize the petition alleged Charles Bailey is the registered agent of the defendant, but the

affidavit does not identify Charles Bailey as the registered agent. Because the affidavit

misidentifies the defendant. it fails to establish the necessary factors under rule 106(b) with

respect to Bailey’s. Under these circumstances, we conclude Bailey’s was not served in strict

compliance with rule 106(b) because substituted service not properly authorized by the

affidavit relied upon by the trial court. Without proper service, the trial court never obtained

personal jurisdiction over Bailey’s and the default judgment against it is void. Given our

disposition of this issue. we need not address Bailey’s second issue. See TEx. R. App. P. 47.1.

We reverse the trial court’s judgment and remand for further proceedings consistent with

this opinion.

OLLY NCIS JUSTICE 1 lO7lOF.P05

4 Qtottrt of tpptaI jftftj 1Ottrict of Z!rexa at a1ta

JUDGMENT

BAILEY’S FURNITURE, INC.. Appeal from the 19 1st Judicial District Appellant Court of Dallas County, Texas (Trial Court No. DCI l-02523-J). No. 05-1 l-00710-CV V. Opinion delivered by Justice Francis; Justices O’Neill and Murphy participating. GRAHAM-RUTLEDGE & COMPANY. Appellee

Based on the Courts opinion of this date, we REVERSE the trial court’s judgment and REMANI) the cause to the trial court fbr further proceedings consistent with the opinion. We ORDER that appellant Bailey’s Furniture, Inc. recover its costs of this appeal from appellee Graham-Rutledge & Company.

Judgment entered December 13. 2012.

MOLLY NC1S