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holding that Secretary of State's return bearing notation "Forwarding Order Expired" was "prima facie evidence" that defendant was not served at correct address
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No. 05-06-01500-CV
Opinion issued November 9, 2007.
On Appeal from the County Court at Law No. 4 Dallas County, Texas, Trial Court Cause No. cc-06-01674-d.
Before Justices WHITTINGTON, WRIGHT, and FITZGERALD.
Opinion By Justice WHITTINGTON.
MEMORANDUM OPINION
In this restricted appeal, Starbucks Corporation, Inc. d/b/a Starbucks Coffee Co. challenges the default judgment entered in favor of Rachael Smith. In two issues, Starbucks contends the trial judge erred in entering the default judgment because (i) service was defective when Smith did not first attempt service on Starbucks's registered agent and never alleged the secretary of state was Starbucks's agent for service of process and (ii) Starbucks was not served with process. For the reasons stated below, we reverse the default judgment against Starbucks and remand this cause to the trial court.
Background
Smith filed a defamation suit against Starbucks and Joe A. Ford. Smith's original petition states Starbucks "is a corporation who may be served with process by serving its registered agent, Prentice-Hall Corporation System Inc [sic] located at 400 North St. Paul, Dallas, Texas 75201." Smith mailed the citation to the secretary of state. In turn, the secretary of state mailed a copy of the citation with the original petition attached to "Starbucks Corporation Inc [sic] dba Starbucks Coffee Co., Prentice-Hall Corporation System Inc [sic], reg. agent, 400 N. St. Paul, Dallas, TX 75201." The citation was returned to the secretary of state bearing the notation "Forwarding Order Expired." This notification concerning the return of service by the secretary of state was filed with the trial court.
The record does not confirm any attempt by Smith to serve Ford.
Prentice-Hall was not the registered agent of Starbucks at the time of the filing of Smith's original petition or at the times the citation and original petition were mailed to and forwarded by the secretary of state. Moreover, the address in Dallas, Texas, provided by Smith as the purported address of Starbucks's registered agent was not a correct address. Pursuant to the Texas Business Corporation Act, on November 17, 2005, "Change of Registered Agent/Registered Office of Starbucks" was filed with the secretary of state, changing the name of the registered agent from Prentice Hall Corporation System to Corporation Service Company d/b/a CSC-Lawyers Incorporating Service Company, the registered office address of 701 Brazos Street, Suite 1050, Austin, TX 78701 remaining the same. See Tex. Bus. Corp. Act Ann. art. 2.10-1 (Vernon 2003).
Starbucks did not file an answer to the lawsuit. The case was set for default judgment hearing. Unaware of the pending matter and without notice of the default judgment hearing, Starbucks did not attend the hearing. The trial judge entered default judgment against Starbucks in excess of $46,000, including $31,000 of exemplary damages. Starbucks did not seek postjudgment relief at the trial court. Thereafter, on October 31, 2006, Starbucks filed this notice of restricted appeal of the May 26, 2006 default judgment.
Restricted Appeal
Rule 30 of the Texas Rules of Appellate Procedure provides that
[a] party who did not participate — either in person or through counsel — in the hearing that resulted in the judgment complained of and who did not timely file a postjudgment motion or request for findings of fact and conclusions of law, or a notice of appeal within the time permitted by Rule 26.1(a), may file a notice of appeal within the time permitted by Rule 26.1(c).
Tex. R. App. P. 30. Restricted appeals replace writ of error appeals to the court of appeals. Id. Statutes pertaining to writ of error appeals to the court of appeals apply equally to restricted appeals. Id. Review under this type of appeal is limited to errors apparent on the face of the record. Fid. Guar. Ins. Co. v. Drewery Const. Co., Inc., 186 S.W.3d 571, 573 (Tex. 2006) (citing Alexander v. Lynda's Boutique, 134 S.W.3d 845, 848 (Tex. 2004)).
When a default judgment is attacked by restricted appeal, we do not indulge any presumptions in favor of valid issuance, service, and return of citation. Primate Const., Inc. v. Silver, 884 S.W.2d 151, 152 (Tex. 1994); Uvalde Country Club v. Martin Linen Supply Co., 690 S.W.2d 884, 885 (Tex. 1985). Failure to show strict compliance with the rules relating to proper service renders any attempted service invalid and requires us to set aside the default judgment. Uvalde Country Club, 690 S.W.2d at 885. Jurisdiction over a defendant must be established in the record by an affirmative showing of service of citation independent of recitals in the default judgment. Wright Bros. Energy, Inc. v. Krough, 67 S.W.3d 271, 273 (Tex.App.-Houston [1st Dist.] 2001, no writ). In addition, strict compliance must be affirmatively shown in the record unless the defendant voluntarily appears before judgment. McKanna v. Edgar, 388 S.W.2d 927, 929 (Tex. 1965).
Our record shows the notice of appeal was filed within six months of the default judgment complained of. It also shows that Starbucks was a party to the suit, that it did not participate in the default judgment hearing that resulted in the May 26, 2006 default judgment, and that Starbucks did not file a postjudgment motion for relief or notice of appeal under Rule 26.1(a). Therefore, the only issue we must decide is whether error requiring reversal is apparent from the face of the record. The only proof of service in the record before us is the secretary of state's return bearing the notation "Forwarding Order Expired." This recitation is prima facie evidence that Starbucks was not served. See GMR Gymnastics Sales, Inc. v. Walz, 117 S.W.3d 57, 59 (Tex.App.-Fort Worth 2003, pet. denied) (secretary of state return bearing notation "not deliverable as addressed, unable to forward" prima facie evidence address provided to secretary of state was incorrect and defendant not served); Wright Bros., 67 S.W.3d at 274 (process served with notation "no such number" sufficient to place plaintff on notice that there was problem with address).
After reviewing the record, we conclude there is no affirmative showing that Smith served Starbucks with process. See Barnes v. Frost Nat'l Bank, 840 S.W.2d 747, 750 (Tex.App.-San Antonio 1992, no pet.) (trial court does not have personal jurisdiction over defendant where certificate of service is returned "unclaimed" and record does not indicate address provided by plaintiff was correct). Because there is error on the face of the record, we reverse the default judgment and remand the case. See Peralta v. Heights Med. Ctr., Inc., 485 U.S. 80, 86-87 (1988) (default entered against a defendant who did not receive notice of the lawsuit must be set aside). We sustain Starbucks's second issue. Further, because this issue is dispositive of the case, we need not address Starbucks's remaining issue on appeal. See Tex. R. App. P. 47.1.
We note that here attempted service of citation through the secretary of state was not proper. At all relevant times, Starbucks maintained a duly appointed registered agent for service of process on file with the office of the secretary of state. Accordingly, the president, all vice presidents, and the registered agent were the agents of Starbucks upon whom process could be served. See Tex. Bus. Corp. Act Ann. art. 2.11(A) (Vernon Supp. 2007). If a registered agent cannot with reasonable diligence be found at the registered office, then the secretary of state shall be an agent for the corporation. Id. at 2.11(B). The record contains no assertion that a registered agent could not with reasonable diligence be found at the registered office.
We reverse the trial court's judgment and remand this case for further proceedings.