Turbo Restaurants, LLC v. Reid's Refrigeration Inc. D/B/A Reid's A/C & Heat

Court of Appeals of Texas·Decided August 30, 2022·No. 08-21-00071-CV·Published

Opinion

COURT OF APPEALS EIGHTH DISTRICT OF TEXAS EL PASO, TEXAS

§ TURBO RESTAURANTS, LLC, No. 08-21-00071-CV § Appellant, Appeal from the § v. 281st Judicial District Court § REID’S REFRIGERATION INC. d/b/a of Harris County, Texas REID’S A/C & HEAT, § (TC# 2020-55564) Appellee. §

OPINION

In this restricted appeal, the appellant contends that the trial court erred in entering a default

judgment because the record does not reflect proper service on its registered agent.1 Finding error

on the face of the record, we reverse the trial court’s judgment and remand the case for further

proceedings.

I. BACKGROUND

Appellee Reid’s Refrigeration Inc. (Reid’s) filed a suit on a sworn account against

Appellant Turbo Restaurants, LLC (Turbo) alleging that Turbo agreed, but failed to pay for Reid’s

1 This appeal was also originally docketed with the Fourteenth Court of Appeals but was transferred as a part of the Texas Supreme Court’s on-going docket equalizations efforts. We apply that court’s precedents to the extent they might conflict with our own. TEX.R.APP.P. 41.3 air conditioning repair services. In its petition, Reid’s alleged that Turbo was “a domestic limited

liability company doing business in the State of Texas and may be served through its registered

agent, Corporate Creations Network, Inc., at 2425 W. Loop South, #200, Houston, Texas 77027.”

The clerk issued a citation directing service on Turbo’s registered agent, using the same name and

address. Significant to this appeal, however, the process server’s return of service stated that he

delivered the citation and petition to Turbo, care of its registered agent, Corporate Creations

Network (omitting the designation “Inc.”) by delivering it to “Maria Newman” at “5444

Westheimer Rd, 10th Floor, Houston, TX 77056.” The return does not specify Ms. Newman’s

authority to accept service on behalf of either Turbo or its registered agent, and the address on

Westheimer is different from the address in the petition and citation.

When Turbo failed to answer the petition, Reid’s filed a motion for default judgment

alleging that it obtained valid service on Turbo by delivering a true copy of the citation and petition

to Turbo’s registered agent, “Corporate Creations Network Inc. located at 2425 West Loop South,

#200, Houston, Texas 77027.” Reid’s further attached a “Certificate of Last Known Mailing

Address,” listing Turbo’s registered agent as Corporate Creations Network, Inc, located at 2425

W. Loop South, #200 Houston, Texas 77027. Reid’s argued that it was therefore entitled to a

default judgment on its sworn account for $47,451.95, which included the unpaid invoice amount

and interest. In addition, Reid’s sought $6,452 in attorney’s fees, and submitted a supporting

declaration and billing records from its attorney.

The trial court granted the motion for default judgment, and entered a final judgment,

granting all the relief that Reid’s requested, including the award of attorney’s fees. Within six

months of the final judgment, Turbo filed a notice of restricted appeal from the final judgment,

2 and further posted a supersedeas bond in the amount of the judgment under Rule 26.1(c) of the

Texas Rules of Appellate Procedure.

II. ISSUE ON APPEAL

In a single issue, Turbo contends that the trial court erred in granting the default judgment,

asserting that the record does not establish that the service was made in strict compliance with the

Texas Rules of Civil Procedure. In particular, Turbo contends that (1) the return of service

incorrectly states that service was made on “Corporate Creations Network,” as its registered agent,

rather than on “Corporate Creations Network, Inc.,” as reflected in the petition and citation; (2)

the return of service reflects that service was made at a different address than that stated in the

petition and citation; and (3) nothing in the record reflects that the person who accepted service,

Maria Newman, was allowed to accept service on behalf of either Turbo or its registered agent.

For the reasons noted below, we agree with Turbo that the record does not reflect that the service

was valid as required to support a default judgment.2

III. APPLICABLE LAW

A. A Court Lacks Jurisdiction Over a Defendant Absent Proper Service

A defendant who fails to timely answer a lawsuit may suffer a default judgment.

TEX.R.CIV.P. 239. However, a trial court lacks the jurisdiction to enter a default judgment against

a defendant who has not been properly served. See Spanton v. Bellah, 612 S.W.3d 314, 316-17

(Tex. 2020); see also W. Garry Waldrop DDS, Inc. v. Pham, No. 14-15-00747-CV, 2016 WL

4921588, at *2 (Tex.App.--Houston [14th Dist.] Sept. 15, 2016, no pet.) (mem. op.) (“When

2 Turbo also contends that Reid’s was not entitled to an award of attorney’s fees under Chapter 38 of the Texas Rules of Civil Procedure, and that the trial court’s award of fees reflects another error on the “face of the record.” Because we determine that service was invalid and that the default judgment must be set aside, we need not address that issue in resolving the appeal.

3 process is not validly served, the trial court acquires no personal jurisdiction over the defendant

and any default judgment is void.”). Thus, to sustain a default judgment, the record must reflect

that the defendant was served in “strict compliance” with all applicable requirements in the law.

See Spanton, 612 S.W.3d at 315 (“We have long held that a no-answer default judgment cannot

stand when the defendant ‘was not served in strict compliance with applicable requirements.’” ),

quoting Wilson v. Dunn, 800 S.W.2d 833, 836 (Tex. 1990); see also Primate Const., Inc. v. Silver,

884 S.W.2d 151, 153 (Tex. 1994) (recognizing that a trial court lacks jurisdiction to enter a no-

answer default judgment, where there is a lack of proof of proper service). “[S]trict compliance

with service requirements in the default context is . . . intended to safeguard due process, allowing

the defendant an opportunity to appear and defend the action on the merits.” Pham, 2016 WL

4921588, at *2.

B. Service of Process

The party filing suit is responsible for obtaining service of the citation and a copy of the

petition on the defendant. TEX.R.CIV.P. 99 (a). Among other things, the citation must contain

the “names of parties,” and “be directed to the defendant.” TEX.R.CIV.P. 99 (b) (7)(8). In turn,

Rule 107 provides that an “officer or authorized person executing the citation must complete a

return of service,” and that the return, together with any document to which it is attached, must

include, among other things, “the person or entity served” and the “address served.”

TEX.R.CIV.P. 107 (a) (5)(6).

When, as here, a defendant is a domestic corporation authorized to transact business in

Texas, it is not a person that can accept process, and it must therefore be served through its

president, vice president, or registered agent. Pham, 2016 WL 4921588, at *3, citing

TEX.BUS.ORGS. CODE ANN. §§ 5.201(b). 5.255(1); see also Asset Prot. & Sec. Servs., L.P. v.

4 Armijo, 570 S.W.3d 377, 383 (Tex.App.--El Paso 2019, no pet.) (“A domestic corporation

Free access — add to your briefcase to read the full text and ask questions with AI

Turbo Restaurants, LLC v. Reid's Refrigeration Inc. D/B/A Reid's A/C & Heat, (Tex. Ct. App. 2022).

Turbo Restaurants, LLC v. Reid's Refrigeration Inc. D/B/A Reid's A/C & Heat (Turbo Restaurants, LLC v. Reid's Refrigeration Inc. D/B/A Reid's A/C & Heat) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Union Pacific Corp. v. Legg
49 S.W.3d 72 (Court of Appeals of Texas, 2001)
Williams v. Williams
150 S.W.3d 436 (Court of Appeals of Texas, 2004)
Fox v. Wardy
234 S.W.3d 30 (Court of Appeals of Texas, 2007)
White Motor Company v. Loden
373 S.W.2d 863 (Court of Appeals of Texas, 1963)
Garcia v. Gutierrez
697 S.W.2d 758 (Court of Appeals of Texas, 1985)
Payne & Keller Co. v. Word
732 S.W.2d 38 (Court of Appeals of Texas, 1987)
Ortiz v. Avante Villa at Corpus Christi, Inc.
926 S.W.2d 608 (Court of Appeals of Texas, 1996)
Uvalde Country Club v. Martin Linen Supply Co.
690 S.W.2d 884 (Texas Supreme Court, 1985)
Hurd v. D. E. Goldsmith Chemical Metal Corp.
600 S.W.2d 345 (Court of Appeals of Texas, 1980)
Myan Management Group, L.L.C. v. Adam Sparks Family Revocable Trust
292 S.W.3d 750 (Court of Appeals of Texas, 2009)
All Commercial Floors, Inc. v. Barton & Rasor
97 S.W.3d 723 (Court of Appeals of Texas, 2003)
Harvestons Securities, Inc. v. Narnia Investments, Ltd.
218 S.W.3d 126 (Court of Appeals of Texas, 2007)
Payless Cashways, Inc. v. Hill
139 S.W.3d 793 (Court of Appeals of Texas, 2004)
Primate Construction, Inc. v. Silver
884 S.W.2d 151 (Texas Supreme Court, 1994)
Wilson v. Dunn
800 S.W.2d 833 (Texas Supreme Court, 1991)
Brown-McKee, Inc. v. J. F. Bryan & Associates
522 S.W.2d 958 (Court of Appeals of Texas, 1975)
Joyce Creaven v. Caroline Creaven
551 S.W.3d 865 (Court of Appeals of Texas, 2018)