Shamrock Enterprises, LLC D/B/A FRSTeam Gulfcoast/LA v. Top Notch Movers, LLC

• Court: Court of Appeals of Texas
• Decided: June 6, 2024
• Docket: 13-22-00529-CV
• Status: Published

Opinion

NUMBER 13-22-00529-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI – EDINBURG

SHAMROCK ENTERPRISES, LLC D/B/A FRSTEAM GULFCOAST/LA, Appellant,

v.

TOP NOTCH MOVERS, LLC, Appellee.

ON APPEAL FROM THE COUNTY COURT AT LAW NO. 4 OF NUECES COUNTY, TEXAS

MEMORANDUM OPINION Before Chief Justice Contreras and Justices Tijerina and Peña Memorandum Opinion by Justice Tijerina

Appellant Shamrock Enterprises, LLC, d/b/a FRSTeam Gulfcoast/LA (FRSTeam)

appeals the trial court’s no-answer default judgment in favor of appellee Top Notch

Movers, LLC (Top Notch). By two issues, FRSTeam argues the trial court erred because:

(1) Top Notch failed to plead facts showing that FRSTeam was amenable to substituted service, and (2) FRSTeam failed to serve Top Notch in strict compliance with the statutory

requirements. We affirm.

I. BACKGROUND

Top Notch is in the business of providing moving services. On February 10, 2022,

Top Notch filed suit against FRSTeam.1 According to Top Notch’s petition, sometime

between October 2020 and November 2020, FRSTeam hired Top Notch for moving

services, which Top Notch provided. FRSTeam refused to pay for the services.

In its petition, Top Notch asserted that FRSTeam is a foreign limited liability

company whose principal office is in Alabama. Top Notch alleged that FRSTeam “may

be served with process by serving the Texas Secretary of State [(SOS)] . . . as its agent

for service because [FRSTeam] is required to register with the [SOS] but has not

appointed or maintained a registered agent for service of process in Texas.” Top Notch

asserted that the trial court had jurisdiction over FRSTeam because FRSTeam conducted

business in Texas, operated a business in Texas, or had continuing contacts with Texas,

and that the acts giving rise to this suit occurred in Nueces County. Top Notch filed a

“Nueces County Process Request Sheet” indicating it sought citation by the SOS.

The district clerk issued a citation to be served on FRSTeam at its Alabama

address and duplicate copies to be issued to the SOS. The SOS filed a sworn certification

(a “Whitney certificate,” see U.S. Bank Nat’l Ass’n v. Moss, 644 S.W.3d 130, 132 (Tex.

2022) (citing Whitney v. L & L Realty Corp., 500 S.W.2d 94, 95 (Tex. 1973))) stating that

1 Top Notch asserted suit on sworn account, breach of contract, quantum meruit, unjust enrichment, and promissory estoppel causes of action seeking $170,801.98 in damages.

2 it had received a copy of the citation and the original petition on February 22, 2022, and

forwarded the same to FRSTeam at the Alabama address by certified mail, return receipt

requested, but that process was returned on April 12, 2022, bearing the notation “Return

to Sender, Vacant, Unable to Forward.”

On May 2, 2022, Top Notch filed a motion for entry of default judgment, asserting

FRSTeam was served and did not appear. Top Notch attached an affidavit from its

accountant attesting to the alleged outstanding balance owed by FRSTeam, numerous

invoices reflecting the services Top Notch provided and the fees incurred, an affidavit of

attorney’s fees and itemized bill, and its certificate of FRSTeam’s last known Alabama

address.

On May 9, 2022, the trial court held a hearing on the motion for default judgment,

but FRSTeam failed to appear. The trial court entered a default judgment in Top Notch’s

favor in the amount of $170,801.98 along with attorney’s fees, conditional appellate fees,

prejudgment interest, and court costs. On May 11, 2022, the district clerk sent notice of

the default judgment to the FRSTeam’s Alabama address based on the certificate of last

known address submitted by Top Notch. The mailing was returned to the district clerk

with the following notation: “RETURN TO SENDER, NOT DELIVERABLE AS

ADDRESSED UNABLE TO FORWARD.” FRSTeam filed this restricted appeal on

October 28, 2022.

II. RESTRICTED APPEAL

FRSTeam argues that the trial court erred in entering a no-answer default

judgment because: (1) Top Notch failed to allege in its petition that service on the SOS

3 was proper; and (2) the record reflects prima facie proof that Top Notch failed to serve

FRSTeam in strict compliance with the statutory requirements.

A. Standard of Review

A party can prevail in a restricted appeal only if: “(1) it filed its notice of restricted

appeal within six months after the judgment was signed; (2) it was a party to the

underlying suit”; (3) it did not participate in the proceedings below and did not timely file

any postjudgment motions or requests for findings of fact and conclusions of law; and “(4)

error is apparent on the face of the record.” Ins. Co. of the State of Pa. v. Lejeune, 297

S.W.3d 254, 255 (Tex. 2009) (per curiam); see TEX. R. APP. P. 30. The first three elements

are not in dispute, and the only contested element is the fourth element—whether error

is apparent on the face of the record.

“Error is apparent on the face of the record when the record fails to show strict

compliance with the rules relating to the issuance, service, and return of citation.” Acadian

Props. Austin, LLC v. KJMonte Invs., LLC, 650 S.W.3d 98, 103 (Tex. App.—El Paso 2021,

no pet.). The Texas Supreme Court has held that it will “indulge no presumptions in favor

of valid issuance, service, or return of citation.” Spanton v. Bellah, 612 S.W.3d 314, 316–

17 (Tex. 2020). Instead, proper service must affirmatively appear on the record. Id. at

316. Service that does not strictly comply with the rules of service is “invalid and of no

effect.” Id. at 317. “In a restricted appeal, the prevailing party bears the burden to prove

proper service of process.” Acadian, 650 S.W.3d at 104.

B. Applicable Law

4 The Texas Business Organizations Code provides that to conduct business in this

state, a foreign entity such as FRSTeam must, among other things, register with the SOS

and provide the name and address of the “initial registered agent for service of process

that Chapter 5 requires to be maintained.” TEX. BUS. ORGS. CODE ANN. §§ 9.001(a)(b);

9.004(9). Pursuant to Chapter 5, a foreign entity must “designate and continuously

maintain in this state” both a registered agent and a registered office for service of

process. Id. §§ 1.002(29); 5.201(a), (b). The registered agent has a duty to “receive or

accept, and forward to the represented entity . . . any process, notice, or demand that is

served on or received by the registered agent.” Id. §§ 5.201(b)(1), (2); 5.206(a)(1); see

also id. § 5.2011(a) (providing that the designation of a person as registered agent of an

entity in a registered agent filing is an affirmation by the entity that the person named as

registered agent has consented to serve in that capacity). The SOS may become an

entity’s agent for service of process in place of a registered agent if the entity fails to

appoint or does not maintain a registered agent in this state, or if the registered agent of

the entity cannot with reasonable diligence be found at the registered office of the entity.

See id. § 5.251.

C. Discussion

Section 5.251 of the Texas Business Organizations Code expressly provides that

the SOS “is an agent of” a foreign entity where “the entity fails to appoint or does not

maintain a registered agent in this state.” See id. FRSTeam does not dispute that it does

not have a registered agent in Texas. Instead, FRSTeam argues that there is error on the

face of the record because: Top Notch’s pleadings do not allege “facts showing that

5 [FRSTeam] was amenable to substituted service.” However, FRSTeam cites no authority

expressly imposing such a pleading requirement.

In Acadian, the appellant argued that the trial court erred in entering a default

judgment against it “as [the appellee] did not allege any facts in its petition to support a

finding that service of process on the [SOS] was proper.” 650 S.W.3d at 110. The

appellate court concluded that appellee “was not required to make those allegations in its

petition” because “the proper inquiry in a restricted appeal of this nature is whether the

record as a whole reflects that service on the [SOS] was proper.” Id. Specifically, the

Acadian court noted that, in Collective Interests, “the Austin Court of Appeals has

expressly held that the allegations supporting service on the [SOS] are not required to be

included in the plaintiff’s petition, if the facts supporting such service are otherwise

reflected in the record.” Id. (citing Collective Ints. v. Reagan Nat’l Advert., No. 03-08-

00283-CV, 2010 WL 2977458, at *3 (Tex. App.—Austin July 29, 2010, no pet.) (mem.

op.)).

Like Acadian and Collective Interests, we similarly conclude that allegations

supporting service on the SOS are not required to be included in Top Notch’s petition if

the facts supporting such service are otherwise reflected in the record. See Acadian, 650

S.W.3d at 110; Collective Ints., 2010 WL 2977458, at *3. Thus, we will review the record

as a whole in determining whether error is apparent on the face of the record. See

Acadian, 650 S.W.3d at 110; Collective Ints., 2010 WL 2977458, at *3.

Here, the record as a whole demonstrated that FRSTeam could be served by the

SOS. See Acadian, 650 S.W.3d at 110; Collective Ints., 2010 WL 2977458, at *3. The

6 record provides that (1) FRSTeam has not appointed or maintained a registered agent

for service of process in Texas; (2) FRSTeamis a foreign entity with a principal place of

business in Alabama; (3) Top Notch’s claims and causes of action are based on acts

which occurred in Nueces County, Texas; (4) service on the SOS was requested; and

(5) the SOS filed a Whitney certificate. Thus, the record shows that FRSTeam failed to

appoint or maintain a registered agent, and the facts supporting service on the SOS were

supported by the record. See TEX. BUS. ORGS. CODE ANN. § 5.251; Acadian, 650 S.W.3d

at 110; Collective Ints., 2010 WL 2977458, at *3. We overrule FRSTeam’s first issue.

Next, FRSTeam argues that there is prima facie proof that service was defective

because the SOS was unable to forward process to FRSTeam’s most recent address.

“When substituted service on a statutory agent is allowed, the designee is not an agent

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

Cullever, 144 S.W.3d 464, 466 (Tex. 2004). “A [Whitney] certificate like the one here from

the [SOS] conclusively establishes that process was served.” Id. “Absent fraud or mistake,

a [Whitney certificate] is conclusive evidence that the [SOS] received service of process

and forwarded the process as required.” Zuyus v. No’Mis Commc’ns, Inc., 930 S.W.2d

743, 746 (Tex. App.—Corpus Christi–Edinburg 1996, no writ).

Here, the record reflects that the SOS fulfilled its statutory duty by forwarding the

process to FRSTeam’s registered address, by certified mail, return receipt requested, as

reflected in the Whitney certificate. Whether the process was returned as “unable to

forward” has no bearing on whether process was properly served. See Campus, 144

S.W.3d at 465–466 (holding that absent fraud or mistake, a Whitney certificate from the

7 SOS is conclusive evidence that the SOS received service of process as agent of the

defendant regardless of whether the certificate of service bore the notation “Attempted—

Not known”); Acadian, 650 S.W.3d at 111–112 (concluding that the SOS’s Whitney

certificate bearing the notation “Return to Sender, Not deliverable as Addressed, Unable

to Forward” was conclusive proof, absent fraud or mistake, that process was properly

served); see also Ontario Produce, LLC v. Whitlock, No. 13-19-00585-CV, 2021 WL

1045805, at *4 (Tex. App.—Corpus Christi–Edinburg Mar. 18, 2021, no pet.) (mem. op.)

(“This is true even if the certificate states that the forwarded process was returned

undelivered.”). The SOS’s “only duty is to forward the process to the registered agent’s

most recent address on file with its office by certified mail, return receipt requested.”

Acadian, 650 S.W.3d at 111; see also COR 1558 Props., LLC v. Sunbelt Rentals, Inc.,

No. 13-22-00487-CV, 2023 WL 4499885, at *2 (Tex. App.—Corpus Christi–Edinburg July

13, 2023, no pet.) (mem. op.) (“Once the [SOS] has forwarded the service and citation to

the defendant, it must issue what is known as a ‘Whitney certificate,’ which conclusively

establishes that it forwarded the service and citation.”).

FRSTeam has not alleged fraud or mistake. See Campus, 144 S.W.3d at 465;

Acadian, 650 S.W.3d at 112. Therefore, the SOS’s Whitney certificate conclusively

established that FRSTeam was properly served with process. See Zuyus, 930 S.W.2d at

746; see also AGC Custom Homes, Inc. v. Gabbard, No. 13-20-00294-CV, 2021 WL

1680198, at *3 (Tex. App.—Corpus Christi–Edinburg Apr. 29, 2021, no pet.) (mem. op.)

(“The record, however, contains no certificate from the [SOS’s] office indicating the [SOS]

forwarded a copy of process to the appellant, and the record is otherwise silent in this

8 regard,” thus, “service therefore did not strictly comply with the trial court’s order.”). We

overrule FRSTeam’s second issue.

III. CONCLUSION

We affirm the judgment of the trial court.

JAIME TIJERINA Justice

Delivered and filed on the 6th day of June, 2024.