Big D Transmission & Auto Service, Inc. v. Kary Lynn Rollins

• Court: Court of Appeals of Texas
• Decided: June 13, 2013
• Docket: 05-11-01019-CV
• Status: Published

Opinion

AFFIRM; Opinion Filed June 13, 2013.

S In The Court of Appeals Fifth District of Texas at Dallas No. 05-11-01019-CV

BIG D TRANSMISSION & AUTO SERVICE, INC., Appellant V. KARY LYNN ROLLINS, Appellee

On Appeal from the County Court at Law No. 4 Dallas County, Texas Trial Court Cause No. CC-11-00447-D

MEMORANDUM OPINION Before Justices Moseley, Francis, and Lang Opinion by Justice Moseley Big D Transmission & Auto Service, Inc. appeals from the denial of its motion for new

trial following a no-answer default judgment. In three issues, Big D argues the trial court abused

its discretion by denying the motion for new trial, the evidence is insufficient to support a claim

under the DTPA, and the evidence is insufficient to support the amount of damages awarded by

the trial court.

The background of the case and the evidence adduced at trial are well known to the

parties; thus, we do not recite them here in detail. Because all dispositive issues are settled in

law, we issue this memorandum opinion. TEX. R. APP. P. 47.2(a), 47.4. We affirm the trial

court’s judgment. BACKGROUND Kary Lynn Rollins sued Big D for violations of the Deceptive Trade Practices-Consumer

Protection Act, conversion, fraud, and negligent misrepresentation relating to representations

about repairs on her vehicle. After several unsuccessful attempts to serve Big D through its

registered agent, Rollins served her second amended petition on Big D by substituted service on

the secretary of state. After Big D failed to file an answer, the trial court heard evidence of

Rollins’s damages and granted a default judgment. In its motion for new trial, Big D argued its

registered agent never received notice of the lawsuit and it met the standards for granting a new

trial following a default judgment.

SERVICE OF PROCESS Big D’s first issue asserts the trial court abused its discretion by denying the motion for

new trial. A default judgment should be set aside and a new trial granted if (1) the failure to

answer was not intentional or the result of conscious indifference but was due to a mistake or

accident, (2) the defendant sets up a meritorious defense, and (3) the motion is filed at such time

that granting a new trial would not result in delay or otherwise injure the plaintiff. See Craddock

v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d 124, 126 (1939). We review a trial

court’s denial of a motion for new trial for abuse of discretion. Dir., State Emps. Workers’

Comp. Div. v. Evans, 889 S.W.2d 266, 268 (Tex. 1994).

The defendant’s burden as to the first Craddock element is satisfied when the factual

assertions, if true, negate intentional or consciously indifferent conduct by the defendant and the

factual assertions are not controverted by the plaintiff. See Fid. & Guar. Ins. Co. v. Drewery

Constr. Co., Inc., 186 S.W.3d 571, 576 (Tex. 2006) (per curiam). In determining if the

defendant’s factual assertions are controverted, the court looks to all the evidence in the record.

See Evans, 889 S.W.2d at 269.

–2– Generally, a default judgment must be set aside if the defendant did not get the suit

papers. See Fidelity, 186 S.W.3d at 574 (citing Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80,

84 (1988)). There are exceptions to this rule where non-receipt is uncorroborated or where it is

the defendant’s own fault. Id. (citing Primate Constr., Inc. v. Silver, 884 S.W.2d 151, 152 (Tex.

1994) (per curiam) (recitals in return of service cannot be rebutted by uncorroborated proof of

moving party) and Campus Invs., Inc. v. Cullever, 144 S.W.3d 464, 466 (Tex. 2004) (per curiam)

(default judgment affirmed following substituted service on secretary of state where corporation

failed to update addresses for its registered agent and office and did not receive certified mail

from secretary of state)).

A corporation is required to continuously maintain a registered agent for service of

process and a registered office. See TEX. BUS. ORGS. CODE ANN. § 5.201 (West 2012). If the

registered agent cannot with reasonable diligence be found at the registered office, the secretary

of state is an agent for service of process on the corporation. See id. § 5.251(1)(B). Service of

process on the secretary of state is accomplished by delivering duplicate copies of the process

and any required fee. See id. § 5.252. After service on the secretary of state, the secretary

forwards the process to the corporation by certified mail, return receipt requested. See id.

§ 5.253. A certificate by the secretary of state as to service conclusively establishes that process

was served. See Campus Invs., 144 S.W.3d at 466.

Rollins served Big D by substituted service on the secretary of state after seven failed

attempts to serve Big D’s registered agent, Daniel Garcia, at the registered office and at Garcia’s

home. Rollins filed affidavits of two process servers establishing her attempts to serve Garcia. 1

1 The affidavit of the first process server stated he made three attempts to serve Garcia at Big D’s registered office, which is its place of business. The first process server spoke to the same employee each time, left a business card and a message for Garcia to call him. The employee said he had given Garcia the process server’s business card and message to call, but the process server never received a call from Garcia. The affidavit of the other process

–3– Big D does not argue that Rollins failed to exercise reasonable diligence to serve its

registered agent; and the record would not support such an argument. Thus, Rollins was entitled

to use substituted service on the secretary of state to serve Big D. See TEX. BUS. ORGS. CODE

ANN. § 5.251(1)(B). The certificate of the secretary of state indicates process was received and

forwarded to Big D by certified mail, return receipt requested. A supplement certificate of the

secretary of state indicates the process was returned with the notation “Refused.”

When substituted service on the secretary of state is allowed, the secretary “is not an

agent for serving but for receiving process on the defendant’s behalf.” Campus Invs., 144

S.W.3d at 466 (emphasis original). The secretary of state’s certificate “conclusively establishes

that process was served.” Id. (“[a]bsent fraud or mistake, the Secretary of State’s certificate is

conclusive evidence that the Secretary of State, as agent of [the defendant], received service of

process for [the defendant] and forwarded the service as required by the statute”) (quoting

Capitol Brick, Inc. v. Fleming Mfg. Co., 722 S.W.2d 399, 401 (Tex. 1986)).

Thus, Big D was served through substituted service on the secretary of state and,

therefore, had constructive notice of the lawsuit. See TEX. BUS. ORGS. CODE ANN. § 5.251;

Campus Invs., 144 S.W.3d at 466, BLS Limousine Serv., Inc. v. Buslease, Inc., 680 S.W.2d 543,

546 (Tex. App.—Dallas 1984, writ n.r.e.) (“[a]lthough the citations were returned to the

Secretary bearing the notation ‘refused,’ appellants were served in accordance with the

requirements” of the long-arm statute).

Big D relied on Garcia’s affidavit and his testimony at the motion for new trial hearing to

support the first Craddock element. In his affidavit, Garcia merely said he did not receive

server stated he made four attempts to serve Garcia on behalf of Big D at Garcia’s home, but Garcia was not there. The process server spoke to Garcia’s wife once and explained to her he was trying to serve a lawsuit brought by Rollins.

–4– process or notice “either personally or by mail from the Texas Secretary of State.” 2

The secretary of state’s certificate establishes that process was forwarded to Big D at its

registered office and was returned marked “Refused.” Garcia’s affidavit includes no facts as to

why Big D did not receive or accept the certified mail sent by the secretary of state as established

by the secretary of state’s certificate. Indeed, it states no facts that, if true, would negate

conscious indifference or intent on the part of Big D. Conclusory allegations will not support the

first element of the Craddock test. See Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 82

(Tex. 1992).

At the hearing, Garcia testified he was only at the office ten to fifteen percent of the time

because of his and his wife’s health issues. He relied on his employees to handle the business

while he was away, but he did not establish any procedure for receiving certified mail while he

was away. Even after learning of the default judgment, Garcia did not ask his employees about

receiving certified mail for the secretary of state.

The return of the process marked “Refused” stands in contrast to Big D’s evidence that

Garcia did not know about the certified mail. Nothing in the record explains how Big D’s refusal

of the certified mail from the secretary of state was an accident or mistake. Here, unlike Fidelity,

Big D presented no evidence that it established a system to avoid what happened in this case.

See Fidelity, 186 S.W.3d at 576 (affidavits that suit papers were lost after service on registered

agent and detailing procedures for handling service papers and efforts to establish a system to

2 Garcia’s affidavit stated: Defendant’s failure to appear at the trial in this matter was not intentional nor the result of conscious indifference but was due to a mistake or accident. I never received service of process or notice in this matter, either personally or by mail from the Texas Secretary of State. Moreover, I did not evade service or intentionally or consciously ignore this matter, rather I have not been at Defendant’s place of business much over the last few months as I have been consumed with medical problems. In early 2011, I underwent surgery on my knee and am still in the process of rehabilitating the same. All the while, I remain my wife’s primary care provider in her ongoing battle with cancer.

–5– avoid loss of papers supported the first Craddock element). According to Garcia, Big D had no

system to handle certified mail when he was out of the office. Further, the suit papers here were

not lost, they were returned to the secretary of state marked “Refused.”

Big D did not show its failure to answer was not intentional or the result of conscious

indifference. Because Big D did not establish the first Craddock element, we need not discuss

the other elements. We conclude the trial court did not abuse its discretion by denying the

motion for new trial. We overrule Big D’s first issue.

SUFFICIENCY OF THE EVIDENCE AS TO LIABILITY Big D’s second issue asserts Rollins did not present evidence to support the DTPA claim

at the default judgment prove-up. However, in a no-answer default case, the defaulting

defendant admits all facts properly pleaded in the plaintiff’s petition except for the amount of

unliquidated damages. Holt Atherton, 835 S.W.2d at 83. Thus, the plaintiff is only required to

prove its claim for unliquidated damages. Id.; see TEX. R. CIV. P. 243. In addition, Big D cites no

authority to support the argument on its second issue. See TEX. R. APP. P. 38.1(i) (argument in

brief must contain clear and concise argument for contentions made, with appropriate citations to

authorities and record). We overrule Big D’s second issue.

SUFFICIENCY OF THE EVIDENCE AS TO DAMAGES Big D’s third issue contends the evidence is insufficient to establish the market value of

Rollins’s vehicle. Big D argues that Rollins did not show that she was familiar with the market

value of her vehicle and did not adjust the value for the condition of the vehicle.

An owner of property may testify to the market value of her own property, but not the

intrinsic value. See Redman Homes, Inc. v. Ivy, 920 S.W.2d 664, 669 (Tex. 1996). Nothing in

the record indicates Rollins testified about the intrinsic value of her vehicle. She testified the

“Blue Book” value of her vehicle was $6,200. She testified vehicles like hers were selling for

–6– between $6,300 and $8,000. She concluded that in her opinion the fair market value of her

personal property in Dallas County at the time it was taken from her was $6,200. The trial court

found Rollins’s economic damages were $6,200 and awarded three times that amount for a

knowing violation of the DTPA. See TEX. CIV. PRAC. & REM. CODE ANN. § 17.50(b)(1).

Considering the evidence in the light most favorable to the trial court’s judgment, we

conclude there is more than a scintilla of evidence to support the finding. See City of Keller v.

Wilson, 168 S.W.3d 802, 807, 827 (Tex. 2005) (legal sufficiency standard of review); Holt

Atherton, 835 S.W.2d at 84. Considering all the evidence, we conclude the evidence is not so

weak that the finding of damages is clearly wrong and unjust. See Cain v. Bain, 709 S.W.2d

175, 176 (Tex. 1986) (per curiam) (factual sufficiency standard of review). We overrule Big D’s

third issue.

Having overruled all of Big D’s issues, we affirm the trial court’s judgment.

111019F.P05

/Jim Moseley/ JIM MOSELEY JUSTICE

–7– S Court of Appeals Fifth District of Texas at Dallas JUDGMENT

BIG D TRANSMISSION & AUTO On Appeal from the County Court at Law SERVICE, INC., Appellant No. 4, Dallas County, Texas Trial Court Cause No. CC-11-00447-D. No. 05-11-01019-CV V. Opinion delivered by Justice Moseley. Justices Francis and Lang participating. KARY LYNN ROLLINS, Appellee

In accordance with this Court’s opinion of this date, the judgment of the trial court is AFFIRMED. It is ORDERED that appellee KARY LYNN ROLLINS recover her costs of this appeal from appellant BIG D TRANSMISSION & AUTO SERVICE, INC.

Judgment entered this 13th day of June, 2013.

–8–