Opinion
NO. 03-14-00453-CV
03-31-2016
Bartonplace Condominiums Homeowners Association, Appellant v. Karen Keup, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 200TH JUDICIAL DISTRICT
NO. D-1-GN-13-003889, HONORABLE GISELA D. TRIANA, JUDGE PRESIDINGMEMORANDUM OPINION
Appellee Karen Keup obtained a default judgment against appellant Bartonplace in district court for damages related to an injury she sustained on Bartonplace's premises. Bartonplace brings this restricted appeal, contending that the default judgment is void for lack of jurisdiction due to defective service of process. For the following reasons, we will reverse the default judgment and remand this cause for further proceedings.
BACKGROUND
Bartonplace operates a condominium complex located at 1600 Barton Springs Road, Austin, Texas 78704. In June of 2013, Keup sustained an injury while adjusting a lounge chair by the condominium complex's pool, permanently severing the tip of her finger. Keup then sued Bartonplace, seeking damages including alleged medical expenses, lost earning capacity, pain and suffering, mental anguish, physical impairment, inconvenience, loss of enjoyment of life, and attorney's fees. Keup named "BartonPlace Condominiums Home Owners Association" as defendant. Bartonplace maintains that this is a misnomer and that its true name is "BartonPlace Owners Association."
In her petition, Keup alleged that Bartonplace could be served through its General Manager, Martin Weinkove, at 1600 Barton Springs Road, Unit 3107; Austin, Texas 78704. Bartonplace contends that Martin Weinkove was not its general manager at any time relevant to these proceedings.
Bartonplace did not file an answer to Keup's petition. Keup filed a motion for default judgment, in which she claimed that the defendant had been served both personally and through the Secretary of State. She attached a return of service reflecting that her process server served "Bartonplace Condominiums Home Owners Association By Delivering To Its General Manager, Martin Weinkove. By Delivering to Michael Orta, authorized to accept" at 1019 Brazos, Ste 105; Austin, Texas 78701. She also attached a certificate from the Secretary of State verifying that its office received the citation and petition and forwarded them to "BartonPlace Condominiums Home Owners Association" and Martin Weinkove, general manager, at the Barton Springs Road address. Keup identified the defendant as a "business entity" in her motion for default judgment, but did not specify the type of business entity in her pleadings to the district court.
This is the physical address of the Texas Secretary of State.
The district court held a hearing, granted the motion for default judgment, and awarded damages for medical expenses, lost earning capacity, pain and suffering, and attorney's fees. Keup attempted to serve a writ of execution on Bartonplace and filed an abstract of judgment, again referring to the defendant as "BartonPlace Condominiums Home Owners Association." Bartonplace contends that it was unaware of Keup's lawsuit until the Sheriff's Department attempted to serve the writ of execution, at which point it brought this restricted appeal.
DISCUSSION
Bartonplace brings four points of error on appeal, contending that: (1) the default judgment is void because the district court lacked jurisdiction over Bartonplace due to defective service; (2) the district court erred in granting the default judgment without any pleading or evidence that Bartonplace owed any duty to Keup; (3) the record does not contain sufficient evidence of Keup's future medical expenses to support the district court's award; and (4) the record does not contain sufficient evidence of Keup's lost revenue, wages, and earning capacity to support the district court's award. For the following reasons, we conclude that the record does not demonstrate strict compliance with the procedural rules governing service of process and will therefore reverse the judgment and remand this cause for further proceedings. Consequently, we need not reach Bartonplace's second, third, and fourth points of error. See Tex. R. App. P. 47.1 (appellate courts must hand down opinions that are as brief as practicable but that address every issue raised and necessary to disposition of appeals).
Restricted Appeals
To prevail on a restricted appeal, an appellant must establish four elements: (1) appellant filed notice of the restricted appeal within six months after the judgment was signed; (2) appellant was a party to the underlying lawsuit; (3) appellant did not participate in the hearing resulting in the judgment complained of and did not timely file post-judgment motions or a request for findings of fact and conclusions of law; and (4) error is apparent on the face of the record. Tex. R. App. P. 30; Alexander v. Lynda's Boutique, 134 S.W.3d 845, 848 (Tex. 2004). The reviewing court may not consider evidence outside of the record. "[I]f extrinsic evidence is necessary, it should be presented in a motion for new trial or a bill of review." Alexander, 134 S.W.3d at 848.
Restricted appeals are a type of direct attack on a default judgment. Larson v. Giesenschlag, 368 S.W.3d 792, 795-96 (Tex. App.—Austin 2012, no pet.). "While ordinarily presumptions are made in support of a judgment (including presumptions of due service of citation when the judgment so recites), no such presumptions are made in a direct attack upon a default judgment." McKanna v. Edgar, 388 S.W.2d 927, 929 (Tex. 1965). The Texas Supreme Court has long "required that strict compliance with the rules for service of citation affirmatively appear on the record in order for a default judgment to withstand a direct attack." Primate Constr. Inc. v. Silver, 884 S.W.2d 151, 152-53 (Tex. 1994) (noting that plaintiff's responsibility of accomplishing service "extends to seeing that service is properly reflected in the record" and finding error on face of the record because it did not affirmatively show proper service); Insurance Co. of State of Pa. v. Lejeune, 297 S.W.3d 254, 255 (Tex. 2009); McKanna, 388 S.W.2d at 930 ("[J]urisdiction in this type of case must affirmatively appear on the face of the record."); TAC Americas, Inc. v. Boothe, 94 S.W.3d 315, 319 (Tex. App.—Austin 2002, no pet.) ("A plaintiff defending a default judgment must show strict compliance with the procedural rules governing citation and return of service. This Court has said that '[v]irtually any deviation will be sufficient to set aside the default judgment' in a restricted appeal." (citation omitted) (quoting Becker v. Russell, 765 S.W.2d 899, 901 (Tex. App.—Austin 1989, no writ)).
Parties' Contentions
Bartonplace and Keup agree that Bartonplace established the first three elements necessary to a restricted appeal. Bartonplace further contends that it has established the fourth element because error—in the form of defective service—is apparent on the face of the record. Bartonplace asserts that Keup's strict compliance with the rules of service of process does not affirmatively appear on the record.
Bartonplace argues that service on Weinkove did not comply with the rules of service because Bartonplace is an incorporated nonprofit that must be served through its president, vice president, or registered agent rather than its general manager. See Tex. Bus. Orgs. Code §§ 5.201, .225 (1)-(2). Bartonplace further contends that Weinkove was not its general manager or registered agent at the time of service. Additionally, Bartonplace notes that the record indicates service on Weinkove "[b]y delivering to Michael Orta, authorized to accept" at the Brazos address rather than the Barton Springs Road address that Keup listed in her petition.
Bartonplace further contends that service through the Secretary of State was not effective because Keup did not first attempt to serve Bartonplace's registered agent as required by the Texas Business Organizations Code. See Tex. Bus. Orgs. Code § 5.251(1)(A)-(B) (Secretary of State can be agent of service for corporation when registered agent cannot be found and served with reasonable diligence); AAA Navi Corp. v. Parrot-Ice Drink Prods. of Am., Ltd., 119 S.W.3d 401, 403-04 (Tex. App.—Tyler 2003, no pet.) (reversing default judgment where plaintiff served Secretary of State but record did not show plaintiff's reasonable diligence in attempting to serve registered agent).
Finally, Bartonplace contends that service was ineffective because Keup served it under the name of BartonPlace Condominiums Home Owners Association instead of its true name, BartonPlace Owners Association. See North Carolina Mut. Life Ins. Co. v. Whitworth, 124 S.W.3d 714, 719 (Tex. App.—Austin 2003, pet. denied) (default judgment can be overturned where plaintiff misnames defendant in petition and citation and defendant is misled by this mistake).
Keup counters that Bartonplace cannot prevail on this restricted appeal because these alleged service defects are not apparent from the face of the record. On appeal, Keup asserts that she believed Bartonplace to be an unincorporated nonprofit and served its general manager accordingly. See Tex. Bus. Orgs. Code § 252.013(a) (unincorporated nonprofit association may be served through "an agent authorized by appointment to receive service of process, an officer, a managing or general agent or a person authorized to participate in the management of its affairs"). According to Keup, her allegation that Weinkove could accept service as Bartonplace's general manager is sufficient to establish her strict compliance with the rules of service for the purpose of a restricted appeal. She further contends that Bartonplace's arguments regarding service all presuppose that Bartonplace is incorporated or that BartonPlace Condominiums Home Owners Association is not its true name. The record, however, contains no evidence of either of these things. Keup therefore reasons that Bartonplace cannot undermine service without resorting to extrinsic evidence, which this Court is prohibited from considering in a restricted appeal. See Alexander, 134 S.W.3d at 848 (appellate court should not consider evidence that did not come before trial court).
In her brief on appeal, Keup claims that she "asserted in her pleading that Martin Weinkove, as the HOA's General Manager, is the HOA's authorized agent." Her petition contains an allegation that Bartonplace "may be served with process by serving its General Manager, Martin Weinkove," at the Barton Springs Road address. However, none of her pleadings to the district court specifically allege that Weinkove was Bartonplace's authorized agent either by appointment or by virtue of his alleged status as general manager. See Tex. Bus. Orgs. Code § 252.013(a) (unincorporated nonprofit association may be served through "agent authorized by appointment to receive service of process"). --------
Substituted Service on the Secretary of State
Keup contends that she properly served Bartonplace by serving the Texas Secretary of State. The record contains a certificate from the Secretary of State confirming that it received Keup's service documents and forwarded them to BartonPlace Condominiums Home Owners Association and Weinkove at the Barton Springs Road address. This does not, however, establish that service through the Secretary of State was appropriate. To the contrary, the record lacks an affirmative showing that Bartonplace was amenable to service through the Secretary of State.
Keup maintains that Bartonplace is not a corporation, and Bartonplace asks us to take judicial notice that it is. We need not reach the issue of whether it is necessary or appropriate to take judicial notice of Bartonplace's corporate status because the record does not demonstrate that Bartonplace was amenable to service through the Secretary of State either as a corporation or as an unincorporated nonprofit.
"A number of Texas statutes provide for substituted service on a government official who then forwards service to the defendant at a designated address." Wachovia Bank of Del., N.A. v. Gilliam, 215 S.W.3d 848, 849 (Tex. 2007) (citations omitted) (vacating default judgment on restricted appeal because record did not affirmatively show effective substituted service on nonresident through Secretary of State under Texas Long-Arm statute). However, "[w]hen a plaintiff relies on service through the secretary of state, the record must show (1) the defendant was amenable to service through the secretary of state and (2) the defendant was, in fact, served in the manner required by the statute." Allodial Ltd. v. Susan Barilich, P.C., 184 S.W.3d 405, 408 (Tex. App.—Dallas 2006, no pet.). Keup cites to no statutory authority allowing substituted service through the Secretary of State of an unincorporated nonprofit that is a resident of Texas. Nor does the record indicate how she complied with any such statute or how Bartonplace could be amenable to service through the Secretary of State.
The Secretary of State can be a corporation's agent for service, but only if that corporation's registered agent cannot be found and served with reasonable diligence. Tex. Bus. Orgs. Code § 5.251(1)(B). "The use of reasonable diligence in attempting to serve a corporation's agent is a prerequisite to attempting service through the secretary of state." AAA Navi Corp., 119 S.W.3d at 401 (reversing default judgment where only evidence of reasonable diligence was extrinsic and therefore could not be considered in restricted appeal); see also Paramount Credit, Inc. v. Montgomery, 420 S.W.3d 226, 230 (Tex. App.—Houston [1st Dist.] 2013, no pet.) (law requires strict compliance with Section 5.251(1)'s diligence requirement); Ingram Indus., Inc. v. U.S. Bolt Mfg., Inc., 121 S.W.3d 31, 34 (Tex. App.—Houston [1st Dist.] 2003, no pet.) ("a default judgment obtained after an attempted substituted service will not stand absent a showing by the plaintiff that, before it resorted to substituted service, it first used reasonable diligence in seeking service on the registered agent of the corporation"). The record contains no indication that Keup made any attempt to locate or serve Bartonplace's registered agent. We, therefore, cannot conclude that Keup exercised the reasonable diligence necessary to effect service under Section 5.251(1)(B).
Personal Service on Weinkove
Keup contends that her process server personally served Bartonplace through Weinkove, but this is not apparent from the face of the record. Her petition indicates that Weinkove could be served at 1600 Barton Springs Road, but the return of service indicates service on Orta at 1019 Brazos, which is the address for the Texas Secretary of State. Although this is not stated in the record, we can take judicial notice of the readily determinable fact of the address of the Texas Secretary of State. See Tex. R. Evid. 201(b); Office of Pub. Util. Counsel v. Public Util. Comm'n, 878 S.W.2d 598, 600 (Tex. 1994); Langdale v. Villamil, 813 S.W.2d 187, 189-90 (Tex. App.—Houston [14th Dist.] 1991, no writ). At most, the record reflects an attempt at substituted service on Weinkove through the Secretary of State. As we have noted, this cannot support the default judgment because the record does not indicate that Bartonplace was amenable to substituted service through the Secretary of State.
In her petition to the district court, Keup alleged that Bartonplace could be served through Weinkove as its general manager. On appeal, Keup suggests that Weinkove could accept service as Bartonplace's authorized agent for service under Texas Business Organizations Code Section 252.013(a). An unincorporated nonprofit can be served through "an agent authorized by appointment to receive service of process, an officer, a managing or general agent, or a person authorized to participate in the management of its affairs . . . ." Tex. Bus. Orgs. Code § 252.013(a). However, Keup points to no evidence in the record that Weinkove actually was Bartonplace's registered agent, authorized agent, or even a general manager or employee of Bartonplace at the time of service. Prior to this appeal, Keup never cited to Section 252.013(a) or alleged that Bartonplace was an unincorporated nonprofit or that Weinkove was its authorized agent. This Court reversed a default judgment under similar circumstances in Renaissance Park v. Davila, 27 S.W.3d 252, 255-57 (Tex. App.—Austin 2000, no pet.). The plaintiff served an on-premises manager, which the Texas Property Code allows when the plaintiff is a tenant who did not receive written notice of the name and address of a property's owner or management company. Id. (citing Tex. Prop. Code § 92.003(b),(c)). It was not apparent that the on-premises manager could accept service, however, because Davila never alleged that she was a tenant or that she had not received notice of the address. Id. We cannot conclude that service on Weinkove—either directly or through Orta or the Secretary of State—was sufficient where the record contains no indication that Weinkove was qualified to accept service.
Keup argues that this Court must accept her allegation that Bartonplace could be served through Weinkove because she asserted as much in her petition and Bartonplace admitted this fact by failing to file an answer, citing case law supporting this contention. E.g., Conesco Fin. Servicing v. Klein Indep. Sch. Dist., 78 S.W.3d 666, 671-72 (Tex. App.—Houston [14th Dist.] 2002, no pet.) ("a recital in the petition that a named person or entity is the registered agent for service on defendant is prima facie evidence of that fact, sufficient to support a default unless the defaulted defendant proves otherwise"). The case before us is distinguishable because, although Keup's petition identifies Weinkove as Bartonplace's general manager, it fails to establish why a general manager would be qualified to accept service for Bartonplace. Further, a number of our sister courts have differed from the line of cases on which Keup relies and held that a reviewing court should not assume that an entity is qualified to accept service simply because the plaintiff says so in the petition. See In re J.M.H., 414 S.W.3d 860 (Tex. App.—Houston [1st Dist.] 2013, no pet.) (reversing default judgment where record reflected service on incarcerated defendant through prison employee but contained no evidence that prison warden had designated employee to receive service on behalf of prisoners as required by Section 17.029(c) of Texas Civil Practice and Remedies Code); Hercules Concrete Pumping Serv., Inc. v. Bencon Mgmt. & Gen. Contracting Corp., 62 S.W.3d 308, 310-11 (Tex. App.—Houston [1st Dist.] 2001, pet. denied) (although return of service is prima facie evidence that person listed therein was served, on restricted appeal appellee-plaintiff must still establish that this person actually was appellant's registered agent for service); NBS S. Inc. v. Mail Box, Inc., 772 S.W.2d 470, 471 (Tex. App.—Dallas 1989, writ denied) ("We think that the better rule is to require an affirmative showing that the person served was in fact the defendant's agent for service of process."); Hanover Modular Homes of Taft, Inc., v. Corpus Christi Bank & Trust, 476 S.W.2d 97, 99 (Tex. App.—Corpus Christi 1972, no writ) ("Whether the person served was in fact the agent for service of process must be affirmatively established by evidence before a default judgment can be sustained. The pleadings, recitals in the citation, and statements contained in the officer's return are not, in themselves alone, sufficient to establish this requirement."). Given the Texas Supreme Court's emphasis on strict compliance with the rules of service, we conclude that Keup's bare allegations regarding Weinkove are insufficient absent any affirmative showing that the person she served or attempted to serve was in fact Bartonplace's agent.
A default judgment can only survive the defendant's direct attack alleging defective service if the plaintiff's strict compliance with the rules of service affirmatively appears on the record. E.g., Lejeune, 297 S.W.3d at 255. Having found that error is apparent on the face of this record, we must reverse the default judgment and remand this cause for further proceedings.
CONCLUSION
For the foregoing reasons, we reverse the default judgment and remand this cause for further proceedings.
/s/_________
Cindy Olson Bourland, Justice Before Justices Puryear, Pemberton, and Bourland Reversed and Remanded Filed: March 31, 2016