Opinion
05-23-01058-CV
12-18-2024
SYED IRTEZA ALI, Appellant v. TAILIM SONG D/B/A TAILIM SONG LAW FIRM, Appellee
On Appeal from the 429th Judicial District Court Collin County, Texas Trial Court Cause No. 429-01375-2023
Before Justices Molberg, Reichek, and Smith
MEMORANDUM OPINION
AMANDA L. REICHEK JUSTICE
This is a direct appeal from a no-answer default judgment. Syed Irteza Ali, pro se, contends the trial court erred in denying his motion to set the judgment aside. We agree and reverse and remand.
Background
On March 17, 2023, Tailim Song d/b/a Tailim Song Law Firm ("the firm") filed an original petition against Ali. The firm alleged Ali hired it to defend him in a lawsuit. After working on the case for two years, the firm "was forced to withdraw for non-payment." It alleged Ali owed $36,788.90 and sought to recover under a breach of contract theory.
The firm later filed a motion for substitute service, alleging Ali was avoiding service. The firm asked the trial court to permit service by posting the relevant documents to the front door of Ali's residence. It supported its request with a sworn affidavit from the process server that recounted his attempts to serve Ali between March and July 2023. See TEX. R. CIV. P. 106(b).
The process server first attempted to serve Ali at an old business address and then an old home address. After that, the server located Ali's new home address on Ledgestone Court in Richardson. The remaining attempts occurred on July 13, 14, and 15. On July 13, the process server knocked on the doors of multiple houses and spoke to two different men of "Indian descent" who each told him he had the wrong house. He noted "confusion" because there "seemed to be a cluster of houses with the same street address but different street names." After speaking to neighbors, the process server determined "the correct address" was one of the doors he had already knocked on. He did not knock again that day, but determined two vehicles at the location were registered to Connie Lynn Ali and Syed Faisal Ali. He returned to the house the next day. When no one answered the door, he left his business card. He returned the day after that and again no one answered the door. The business card was gone.
It was later determined that Syed Faisal Ali was Ali's son.
The trial court granted the firm's motion and authorized service of process on Ali by posting a copy of the citation, petition, motion for substitute service, and the court's order granting substitute service to the front door of the address on Ledgestone Court. It further ordered that the return of service shall be made in accordance with Rule 107.
The clerk's record contains an affidavit of service, filed with the trial court on August 8, 2023. In that affidavit, the process server stated that he posted a true copy of the citation, petition, motion for substitute service, and the order granting substitute service to the front door of the Ledgestone Court address on August 7, 2023. When Ali did not file an answer, the firm moved for a default judgment.
The trial court signed a final default judgment on August 30, 2023, awarding the firm damages, attorney's fees, and costs. On September 28, 2023, Ali filed a motion to set the judgment aside. He admitted he lived at the Ledgestone Court address where substitute service was authorized. Ali alleged he learned of the lawsuit on September 5, when he received a letter in the mail at the Ledgestone Court address from the court clerk informing him of the judgment. After a hearing, the trial court denied Ali's motion to set the judgment aside.
The firm argues Ali did not timely file his motion to set aside the judgment and thus the trial court lacked plenary power to rule on the motion. The file stamp on the motion includes the line: "Filed: 10/5/2023 3:45 PM." There is another date typed at the bottom of the stamp: "Filed 9/28/2023 12:54am KMS." At the hearing, the firm argued the motion was filed on October 5 and somehow backdated. In its appellate brief, it argues Ali must have convinced the court clerk to modify the file stamp to reflect a timely filing date. There is nothing in the record to support this assertion. The trial court, by ruling on the merits of Ali's motion, implicitly found the motion was timely. As there is nothing in the record to explain why the October 5 date was crossed out, we cannot conclude otherwise.
A defendant can prove his entitlement to a new trial after a no-answer default judgment in two ways. Take 5 LLC v. Smith, No. 05-22-00390-CV, 2023 WL 1229028, at *4 (Tex. App.-Dallas Jan. 31, 2023, no pet.) (mem. op.). He can show that service of process was invalid, or he can establish the three Craddock elements. Id. Ali makes both arguments in this appeal.
Service of Process
Liberally construing Ali's brief, we interpret his first argument to be that he was not properly served because he did not have actual notice of the lawsuit. See In re N.E.B., 251 S.W.3d 211, 211-12 (Tex. App.-Dallas 2008, no pet.) (we construe liberally pro se pleadings and briefs, but hold pro se litigants to same standards as licensed attorneys). He denies receiving any documents affixed to his front door.
Trial courts lack jurisdiction over a defendant who was not properly served with process. Spanton v. Bellah, 612 S.W.3d 314, 316 (Tex. 2020) (citing Wilson v. Dunn, 800 S.W.2d 833, 836 (Tex. 1990)). A no-answer default judgment cannot stand when the defendant was not served in strict compliance with applicable requirements. Id. We indulge no presumptions in favor of valid issuance, service, or return of citation. Id.
Substitute service exists to allow plaintiffs to effect service where proof of actual notice under Rule 106(a) is impractical. State Farm Fire &Cas. Co. v. Costley, 868 S.W.2d 298, 298 (Tex. 1993); TEX. R. CIV. P. 106(a). Under Rule 106(b), a court may authorize substitute service only after a plaintiff has tried unsuccessfully to effect personal service or service by certified mail, return receipt requested. Costley, 868 S.W.2d at 298-99. Rule 106(b) provides for substitute service upon motion supported by an affidavit listing any location where the defendant can probably be found and stating specifically the facts showing that service in person or by registered or certified mail has been attempted but has not been successful. TEX. R. CIV. P. 106(b). Upon receipt of an affidavit satisfying the requirements in Rule 106(b), the trial court may authorize substitute service in any manner which will be reasonably effective to give the defendant notice of the suit. Id.; Costley, 868 S.W.2d at 299.
When a trial court authorizes substitute service under Rule 106(b), whether the defendant receives actual notice is of no legal consequence to the issue of the validity of service. Mixon v. Nelson, No. 03-15-00287-CV, 2016 WL 4429936, at *3 (Tex. App.-Austin 19, 2016, no pet.) (mem. op.) To require proof of actual notice upon substitute service would frustrate Rule 106(b)'s purpose of providing alternate methods of service for plaintiffs. Costley, 868 S.W.2d at 299. What matters is that service was effectuated pursuant to the trial court's order granting substitute service. DeRouen v. Pridgen, No. 13-22-00115-CV, 2023 WL 7399150, at *7 (Tex. App.-Corpus Christi-Edinburg Nov. 9, 2023, no pet.) (mem. op.).
Ali has not challenged the trial court's decision to authorize substitute service, and the record reflects that substitute service was in strict compliance with the trial court's order. Ali complains that he did not receive actual notice. Because actual notice is immaterial in determining whether Ali was properly served by substitute service, we overrule this issue.
The Craddock Requirements
Next, Ali argues he is entitled to a new trial because he satisfied the Craddock standard for setting aside a default judgment. See Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex. 1939). Under Craddock, Ali must show: (1) his failure to answer was not intentional or the result of conscious indifference, but was due to a mistake or accident; (2) his motion for new trial sets up a meritorious defense; and (3) the granting of a new trial will not operate to cause delay or injury to the firm. Milestone Operating, Inc. v. ExxonMobil Corp., 388 S.W.3d 307, 309 (Tex. 2012).
We review a trial court's refusal to grant a new trial for an abuse of discretion. Utz v. McKenzie, 397 S.W.3d 273, 278 (Tex. App.-Dallas 2013, no pet.). The trial court abuses its discretion when it fails to grant a new trial when all three elements of the Craddock test are met. Id. The defaulting defendant bears the burden of proving all three elements are met. Id.
Consciously indifferent conduct exists when the defendant knew he was sued but did not care. Milestone, 388 S.W.3d at 310; Sutherland v. Spencer, 376 S.W.3d 752, 755 (Tex. 2012). A defendant satisfies his burden under this element when his factual assertions, if true, negate his intentional or consciously indifferent conduct and the factual assertions are not controverted by the plaintiff. Milestone, 388 S.W.3d at 310; Full of Faith Christian Ctr., Inc. v. May, No. 05-20-00859-CV, 2022 WL 3273726, at *2 (Tex. App.-Dallas Aug. 11, 2022, pet. denied) (mem. op.). Generally, some excuse, although not necessarily a good one, will suffice to show that a defendant's failure to file an answer was not because the defendant did not care. Sutherland, 376 S.W.3d at 755 .
In his motion, Ali asserted his failure to answer was not intentional or the result of conscious indifference. The trial court authorized substitute service by the posting of the citation and petition on Ali's front door. In an affidavit incorporated into his motion, Ali denied receiving any documents affixed to his front door. He declared he was unaware of the lawsuit until he received the letter from the district clerk after the court granted the default judgment.
Ali gave an excuse that showed his failure to answer was due to an accident or mistake, not conscious indifference, especially in light of the process server's acknowledgement that Ali's house was in "a cluster of houses with the same street address but different street names." At the hearing, the firm argued Ali was consciously indifferent and pointed to things that occurred prior to the substitute service to suggest Ali evaded personal service. The firm called Ali as a witness, but did not question him about any documents attached to his door or present evidence to directly counter Ali's statement that he never received them. Ali met the first Craddock requirement.
For example, the firm argued Ali had been involved in numerous lawsuits and was a sophisticated litigant who knew what a process server is. It attached to its motion for default Collin County records that it claimed showed Ali had been involved in 55 prior lawsuits, 33 of which had been filed since 2020. At the hearing, it admitted to the trial court that not all of those cases involved the Syed Ali who is a party to this lawsuit. It further admits in its appellee's brief that perhaps as many as 51 of the lawsuits do not involve this defendant. The brief states, "[M]any of the fifty-five cases are not the same Syed Ali. However . . . at least four" are the same Ali.
Ali next asserts, as he did in his motion to set aside the default judgment, that he has a meritorious defense, the statute of limitations. Craddock does not require conclusive proof of a meritorious defense on a motion for new trial. Miller v. Miller, 903 S.W.2d 45, 48 (Tex. App.-Tyler 1995, no writ); see Ivy v. Carrell, 407 S.W.2d 212, 214 (Tex. 1966). The defaulting party's motion should be granted if it "sets up a meritorious defense." Ivy, 407 S.W.2d at 214. The motion must allege facts which in law would constitute a defense to the cause of action asserted by the plaintiff, and must be supported by affidavits or other evidence proving prima facie that the defendant has such meritorious defense. Id. Once these requirements are met, it is improper to try the defensive issues. Id. A new trial should not be denied upon any consideration of counter affidavits or contradictory testimony offered in resistance to the defaulting party's motion. Id.
As a general rule, the statute of limitations for a breach of contract claim is four years from the day the cause of action accrues. TEX. CIV. PRAC. &REM. CODE ANN. § 16.004. An attorney's right to compensation accrues when the legal services are rendered. Pantaze v. Yudin, 229 S.W.3d 548, 551 (Tex. App.-Dallas 2007, pet. dism'd w.o.j.); McAdams v. Brown, 422 S.W.2d 749, 751 (Tex. App.-Houston [1st Dist.] 1967, no writ) (citing Jones v. Lewis, 11 Tex. 359, 359 (1854) ("The general rule is that the pay for services, including those of an attorney, is due as soon as the service is rendered, and the statute of limitations begins to run immediately.")).
Ali attached a copy of Tailim Song's affidavit to his motion to set aside the judgment. The firm relied on Song's affidavit to support its motion for default judgment. Song states the firm represented Ali from November 16, 2016 "until we withdrew on January 9, 2019." The firm filed its original petition on March 17, 2023, more than four years after it stopped representing Ali.
At the hearing, the trial judge asked the firm when its cause of action accrued. The firm responded that it accrued in the middle of March 2019. The firm argued the statute of limitations was tolled due to Ali's travels outside the state of Texas. See TEX. CIV. PRAC. &REM. CODE ANN. § 16.063. It called Ali as a witness to question him about his travel. The firm also argued its suit was timely because Ali asked for the firm's help after it withdrew. Its response to Ali's motion included an affidavit from a lawyer who stated Ali requested his help in February 2019 and that part of the outstanding bill was for phone calls and messages exchanged with Ali after the firm withdrew.
Ali's request for a new trial cannot be denied on the basis of the firm's counter arguments about whether its suit is time barred. Ali was not required to conclusively prove his limitations defense. It is sufficient that he set up a meritorious defense by presenting evidence that the firm filed suit more than four years after its cause of action to recover most of its fees accrued. Ali satisfied the second prong of Craddock.
The purpose of the third Craddock element is to protect a plaintiff against the sort of undue delay or injury that would result in a disadvantage when presenting the merits of the case at a new trial, such as a loss of witnesses or other valuable evidence. Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922, 929 (Tex. 2009); Take 5 LLC, 2023 WL 1229028, at *4. Once a defendant has alleged that granting a new trial will not injure the plaintiff, the burden of proof of injury shifts to the plaintiff. Take 5 LLC, 2023 WL 1229028, at *4; J&M Sales of Tex., LLC v. Sams, No. 05-15-00837-CV, 2016 WL 4039250, at *3 (Tex. App.-Dallas July 26, 2016, no pet.) (mem. op.).
Here, Ali alleged setting aside the default judgment would not prejudice the firm. He noted the firm waited over four years to sue him over the fees, and he took quick action to set the judgment aside once he learned of it. In response, the firm argued it was prejudiced by the delay in getting payment from Ali and because it incurred fees defending Ali's motion to set aside. Evidence of a delay in obtaining compensation for injuries to which a plaintiff is entitled is not the type of injury this prong of Craddock addresses. Take 5 LLC, 2023 WL 1229028, at *7. And incurring fees defending a motion for new trial after a no-answer default is an injury common to all plaintiffs facing such a motion. The firm did not allege a specific injury that would negate Ali's showing of no undue delay or injury. See Dolgencorp, 288 S.W.3d at 929. Ali satisfied the third prong of the Craddock test. Because Ali's motion satisfied all elements of Craddock, the trial court abused its discretion in denying the motion.
We reverse the trial court's default judgment and remand this case to the trial court for further proceedings in accordance with this opinion.
JUDGMENT
Justices Molberg and Smith participating.
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 SYED IRTEZA ALI recover his costs of this appeal from appellee TAILIM SONG D/B/A TAILIM SONG LAW FIRM.
Judgment entered.