U.S. Bank, N.A. v. Pinkerton Consulting and Investigations

• Court: Court of Appeals of Texas
• Decided: August 22, 2014
• Docket: 05-13-00890-CV
• Status: Published

Opinion

REVERSE and REMAND; and Opinion Filed August 22, 2014.

S In The Court of Appeals Fifth District of Texas at Dallas No. 05-13-00890-CV

U.S. BANK, N.A., Appellant

V.

PINKERTON CONSULTING AND INVESTIGATIONS, Appellee

On Appeal from the 68th Judicial District Court Dallas County, Texas Trial Court Cause No. 12-12926

MEMORANDUM OPINION Before Justices Bridges, Francis, and Lang-Miers Opinion by Justice Lang-Miers

Appellant U.S. Bank, N.A. filed this restricted appeal challenging the trial court’s entry

of a no-answer default judgment in a garnishment proceeding in favor of appellee Pinkerton

Consulting and Investigations. In two issues, U.S. Bank argues that fatal defects in the sheriff’s

return mandate reversal of the default judgment and that the trial court’s award of $350,846.35 in

damages requires reversal because the award does not meet the requirements of finance code

section 276.002(c) governing garnishment of an account at a financial institution. Because all

dispositive issues are settled in law, we issue this memorandum opinion. TEX. R. APP. P. 47.2(a),

47.4. We reverse the trial court’s default judgment and remand this case for further proceedings. BACKGROUND

After Pinkerton obtained a judgment against Kelly Hiser, Pinkerton filed an application

for writ of garnishment against U.S. Bank to collect on Pinkerton’s judgment against Hiser. A

Dallas County deputy district clerk issued a writ of garnishment and the sheriff’s return executed

the following day read:

Came to hand on the 9 Day of NOV, 2012 at 2:26 o’clock PM Executed by Dallas County Deputy Sheriff at 11:40 o’clock AM On the 9 Day of NOV, 2012 By Serving U.S. Bank, N.A. ; its registered agent CT Corporation Systems at 350 N ST Paul st #2900 Dallas, Tx 75201 serving Maria Garcia sr corporate operation specialist service process.

After U.S. Bank did not file an answer or otherwise appear in the court proceedings,

Pinkerton filed a motion for default judgment. The trial court entered an interlocutory judgment,

finding “that citation was served according to law and returned to the clerk where it remained on

file for the time required by law” and concluding “that U.S. Bank has defaulted and that plaintiff

is entitled to judgment as to liability as provided by law.” Three weeks later, the court entered

judgment against U.S. Bank, again finding “that citation was served according to law” on U.S.

Bank and awarding damages of $350,846.35 with interest and costs to Pinkerton. Almost four

months later, U.S. Bank filed a notice of restricted appeal.

STANDARD OF REVIEW AND APPLICABLE LAW

A restricted appeal is a direct attack on the trial court’s judgment. Rone Eng’g Serv., Ltd.

v. Culberson, 317 S.W.3d 506, 508 (Tex. App.—Dallas 2010, no pet.). A restricted appeal must

(1) be brought within six months after the trial court signs the judgment, (2) by a party to the

suit, (3) who did not participate in the actual trial, and (4) the error complained of must be

apparent on the face of the record. Id.; see also TEX. R. APP. P. 26.1(c), 30. In a restricted

appeal, our review is limited to error that appears on the face of the record and there are no

presumptions in favor of valid issuance, service, and return of citation. Fid. & Guar. Ins. Co. v.

–2– Drewery Constr. Co., 186 S.W.3d 571, 573 (Tex. 2006) (per curiam). For a default judgment to

withstand direct attack, strict compliance with the rules governing service of process must

affirmatively appear on the face of the record. Rone, 317 S.W.3d at 508; see Wilson v. Dunn,

800 S.W.2d 833, 836 (Tex. 1990). If the record does not show strict compliance with the rules

of civil procedure concerning issuance, service, and return of citation, attempted service of

process is invalid and of no effect, the trial court does not acquire personal jurisdiction over the

defendant, and the default judgment is void. Rone, 317 S.W.3d at 508; see generally TEX. R.

CIV. P. 124.

Under rule of civil procedure 663, a sheriff receiving a writ of garnishment “shall make

return thereof as of other citations.” TEX. R. CIV. P. 663. Rule of civil procedure 107 provides

the general rule for return of service and requires that “[t]he officer or authorized person

executing the citation must complete a return of service.” TEX. R. CIV. P. 107(a). “The return,

together with any document to which it is attached, must include[,]” among other information, “a

description of what was served” and “the manner of delivery of service or attempted service[.]”

TEX. R. CIV. P. 107(b).

SUFFICIENCY OF SHERIFF’S RETURN: MANNER OF SERVICE

U.S. Bank argues that the sheriff’s return that Pinkerton relies upon to establish proper

service “suffers from fatal deficiencies that mandate reversal of the judgment” because the

sheriff’s return does not describe (1) the manner of service or (2) what was being served as

required by rule of civil procedure 107(b). See TEX. R. CIV. P. 107(b). With respect to the

manner of service, U.S. Bank contends that the statement on the sheriff’s return that it was

“served” is “fatally deficient” because it does not indicate the manner of service. U.S. Bank

argues that the return “simply mak[es] a legal conclusion that U.S. Bank was ‘served’” but

–3– provides “no description as to the manner of service” and, as a result, the trial court never

obtained personal jurisdiction over U.S. Bank.

Pinkerton, however, contends that the sheriff’s return, together with attached documents,

adequately describes the manner of service and, as a result, was sufficient “under modern

jurisprudence to support the default judgment[.]” Pinkerton argues that (1) case law supports its

position and (2) the sheriff’s return indicates that it was hand delivered.

Case Law Argument

According to Pinkerton, U.S. Bank “relies on archaic case law” to contend that “magic

language” is required for effective return of service. Pinkerton argues that the cases that U.S.

Bank cites “for the proposition that stating a defendant is served is not sufficient to state the

manner of service” are “inapposite to the facts at hand” because—as discussed in Pinkerton’s

second argument below—“the Sheriff’s return specifies hand delivery of the executed writ of

application and citation.” Pinkerton also argues that many of the cases U.S. Bank cites “are

easily distinguishable for other reasons” because they concerned subjects such as discrepancies

in a return served by substituted service, Dolly v. Aethos Commc’ns Sys., Inc., 10 S.W.3d 384,

388–89 (Tex. App.—Dallas 2000, no pet.), and the failure of a sheriff’s return to identify the

person served as an officer or agent of a corporation, Jacksboro Nat’l Bank v. Signal Oil & Gas

Co., 482 S.W.2d 339, 340–41 (Tex. Civ. App.—Tyler 1972, no writ). In addition, Pinkerton

contends that “[c]ourts uphold default judgments even when there are defects in the return.”

In reply, U.S Bank asserts that Pinkerton “misinterprets the import” of cases it cites

concerning “[c]urrent legal standards for service of process” and for the proposition that courts

uphold default judgments even where the return had defects.

We agree with U.S. Bank. The return states that the sheriff’s deputy executed the return

“[b]y serving” U.S. Bank by “serving” its corporate representative. “A recitation that the agent

–4– ‘was served’ states only a conclusion as to service being perfected and does not show the manner

of service.” Cox Mktg., Inc. v. Adams, 688 S.W.2d 215, 218 (Tex. App.—El Paso 1985, no

writ); see Watson Van & Storage Co. v. Busse, 451 S.W.2d 557, 558 (Tex. Civ. App.—Houston

[1st Dist.] 1970, no writ) (“[I]t is settled that the qualifying words, ‘by serving,’ render the return

defective for failure to state the manner of service, as now required by Rule 107, T.R.C.P., in that

such term is merely a legal conclusion.”); Hyltin-Manor Funeral Home, Inc. v. Hill, 304 S.W.2d

469, 470 (Tex. Civ. App.—San Antonio 1957, no writ) (reversing a default judgment and

concluding that a sheriff’s return “does not show the manner of service” and instead stated “a

conclusion that [a corporate agent] was ‘served’”). Because the return does not state the manner

of service, it does not strictly comply with rule of civil procedure 107, which requires that the

officer’s return state “the manner of delivery of service[.]” See TEX. R. CIV. P. 107(b)(8).

The three cases that Pinkerton cites as authority for the proposition that “[c]ourts uphold

default judgments even when there are defects in the return” do not apply. In Faaborg v.

Allcorn, No. 11-05-00365-CV, 2006 WL 3238241, at *2 (Tex. App.—Eastland Nov. 9, 2006, no

pet.) (mem. op.), the court concluded that a return of service that stated the street, block, and an

abbreviated name of the county was sufficient because it adequately stated the place of service as

required by the rules of civil procedure. 1 But here, the issue is not the adequacy of the

description of the manner of service. Rather, the return in this case does not include any

description of the manner of service. In addition, Pinkerton quotes Faaborg for the proposition

that “[s]trict compliance does not mean ‘obeisance to the minutest detail.’” Id. at *1 (quoting

Ortiz v. Avante Villa at Corpus Christi, Inc., 926 S.W.2d 608, 613 (Tex. App.—Corpus Christi

1996, writ denied)). But Ortiz follows that quote with the statement that “[e]rrors such as

1 Pinkerton follows its citation to Faaborg with a parenthetical stating “upholding default judgment even though the court was not identified—appellate court applied presumption that identi[t]y of court was implied[.]” That issue in Faaborg concerned the sufficiency of a citation, not the sufficiency of a return.

–5– mistaken capitalization in the defendant’s name and spelling errors too minor to raise any doubt

that the correct person was served are insufficient to invalidate service.” Ortiz, 926 S.W.2d at

613. The error in this case is not a minor error of capitalization or spelling but of omission of a

required element of the sheriff’s return. Lastly, the court in Herbert v. Greater Gulf Coast

Enterprises, Inc., 915 S.W.2d 866, 871 (Tex. App.—Houston [1st Dist.] 1995, no writ),

overruled the appellant’s argument that an affidavit attached to an officer’s return was defective

because it referred to a complaint when the pleading was entitled a petition. Here, the error is an

omission rather than a misnomer.

In addition, Pinkerton relies upon Jamison v. National Loan Investors, L.P., 4 S.W.3d

465, 469 (Tex. App.—Houston [1st Dist.] 1999, pet. denied), for the proposition that “parties do

not control the manner in which the constable performs his duties as prescribed by the Texas

Constitution and Legislature.” But Jamison considered whether a constable was acting as the

garnishor’s agent in a wrongful garnishment claim, an issue not before us.

Lastly, although Pinkerton argues that the cases that U.S. Bank cites are “inapposite[,]”

Pinkerton does not refute U.S. Bank’s central premise—nor does it refute that various authorities

cited by U.S. Bank support the premise—that the statement in a sheriff’s return that a party is

“served” does not satisfy the requirement that the return state the manner of service. See, e.g.,

Cox, 688 S.W.2d at 218; Hyltin-Manor, 304 S.W.2d at 470. Instead, it argues that the sheriff’s

return in this case “specifies hand delivery[.]”

“Came to Hand” Argument

Pinkerton argues that (1) “it is beyond dispute” that the application for writ of

garnishment identifies CT Corporation as U.S. Bank’s registered agent and (2) “the Sheriff’s

Return specifically indicates that the Sheriff’s deputy hand delivered (‘came to hand’) the

executed writ of garnishment on Ms. Maria Garcia, a senior corporate operation specialist of CT

–6– Corporation, as opposed to reflecting some other mode of service, such as service by certified

mail.” Pinkerton contends that, as a result, the sheriff’s return “sufficiently identifies the manner

of service of process[.]” But Pinkerton does not cite any authority supporting its contention that

the phrase “came to hand” indicates that the documents were hand delivered to U.S. Bank’s

registered agent. And, in reply, U.S. Bank contends that the statement “came to hand” in the

sheriff’s return does not establish that the documents were hand delivered and that, instead,

“came to hand” indicates “that the Sheriff’s deputy received the process documents.”

We conclude that the sheriff’s return does not state the manner of service as required by

rule of civil procedure 107 and that error appears on the face of the record and the service was

void and of no effect. Consequently, the trial court did not have personal jurisdiction over U.S.

Bank and erred in entering default judgment.

We sustain U.S. Bank’s first issue. Because we decide in favor of U.S. Bank on its first

issue, it is not necessary for us to address its second issue. TEX. R. APP. P. 47.1.

CONCLUSION

We reverse the trial court’s default judgment and remand this case for further

proceedings. No new service of process is necessary. See TEX. R. CIV. P. 123.

/Elizabeth Lang-Miers/ ELIZABETH LANG-MIERS JUSTICE

130890F.P05

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

U.S. BANK, N.A., Appellant On Appeal from the 68th Judicial District Court, Dallas County, Texas No. 05-13-00890-CV V. Trial Court Cause No. 12-12926. Opinion delivered by Justice Lang-Miers, PINKERTON CONSULTING AND Justices Bridges and Francis participating. INVESTIGATIONS, Appellee

In accordance with this Court’s opinion of this date, the judgment of the trial court is REVERSED and this cause is REMANDED to the trial court for further proceedings consistent with this opinion.

It is ORDERED that appellant U.S. BANK, N.A. recover its costs of this appeal from appellee PINKERTON CONSULTING AND INVESTIGATIONS.

Judgment entered this 22nd day of August, 2014.

–8–