American Universal Ins. Co. v. D.B. & B., Inc.

• Decision Date: 22 January 1987
• Docket Number: No. 13-86-293-CV,13-86-293-CV
• Citation: 725 S.W.2d 764
• Parties: AMERICAN UNIVERSAL INSURANCE CO., Appellant, v. D.B. & B., INC., Appellee.
• Court: Texas Court of Appeals

Page 764

725 S.W.2d 764

AMERICAN UNIVERSAL INSURANCE CO., Appellant, v. D.B. & B., INC., Appellee.

No. 13-86-293-CV.

Court of Appeals of Texas,

Corpus Christi.

Jan. 22, 1987.

Rehearing Denied March 12, 1987.

Marie R. Yeates, Frank W. Mitchell, Francis I. Spagnoletti, Houston, R.D. Cullen, Victoria, for appellant.

Henry E. Bower, White, Huseman, Pletcher & Powers, Corpus Christi, for appellee.

Before NYE, C.J., and KENNEDY and SEERDEN, JJ.

OPINION

NYE, Chief Justice.

Appellee brought a deceptive trade practices suit and sought a declaratory judgment regarding construction of an insurance policy and a declaration of the coverage pursuant to that policy. Appellee recovered a default judgment against the appellant. Appellant brings eight points of error. We reverse the judgment of the trial court and remand the cause for a new trial.

Appellant, by its first point of error, complains that the trial court erred in rendering a default judgment because service of process was improper. Appellee's petition alleged that:

Defendant, American Universal Insurance Co., is a corporation out of Providence, Rhode Island, doing business in San Patricio County, Texas, and may be served with citation therein through its registered agent, Mr. Jack Keith, 1903 Hermann Drive, Houston, Harris County, Texas.

The receipt for certified mail was addressed to:

American Universal Ins. Co.

Mr. Jack Keith

1903 Hermann Dr.

Houston, Texas

However, Mr. Jack Keith, the addressee, did not sign the receipt, but instead a "J. Williams" signed in the space labeled "agent."

Although "J. Williams" signed as agent for Jack Keith and American Universal Insurance Company, there is nothing in the record that is before us which affirmatively shows that "J. Williams" was such an agent. This agency relationship must be affirmatively shown before a default judgment can be proper. Cates v. Pon, 663 S.W.2d 99, 101 (Tex.App.--Houston [14th Dist.] 1983, writ ref'd n.r.e.); White Motor Co. v. Loden, 373 S.W.2d 863, 865 (Tex.Civ.App.--Dallas 1963, no writ); see also Dan Edge Motors, Inc. v. Scott, 657 S.W.2d 822, 824 (Tex.App.--Texarkana 1983, no writ).

The presumptions which are ordinarily made in support of valid service do not apply when a direct attack is made upon a default judgment. The record must affirmatively show strict compliance with the Rules of Civil Procedure. Uvalde Country Club v. Martin Linen Supply Co., 690 S.W.2d 884, 885 (Tex.1985); Gerland's Food Fair, Inc. v. Hare, 611 S.W.2d 113, 115 (Tex.Civ.App.--Houston [1st Dist.] 1980, writ ref'd n.r.e.); Mega v. Anglo Iron & Metal Co., 601 S.W.2d 501, 503 (Tex.Civ.App.--Corpus Christi 1980, no writ). Unless the record affirmatively shows, at the time the default judgment is entered, either an appearance by the defendant, proper service of citation on the defendant, or a written memorandum of waiver, the trial court does not have in personam jurisdiction to enter a default judgment against the defendant. Cates, 663 S.W.2d at 102. Failure to affirmatively show strict compliance with the Rules of Civil Procedure ¹ renders the attempted service of process invalid and of no force or effect. Uvalde Country Club, 690 S.W.2d at 885.

If a court has not acquired jurisdiction of both the parties and the subject matter of the litigation, the judgment is void and is subject to both direct and collateral attack. Browning v. Placke, 698 S.W.2d 362, 363 (Tex.1985); Martin v. Sheppard, 201 S.W.2d 810, 812 (Tex.1947); Flynt v. City of Kingsville, 82 S.W.2d 934, 934-35 (Tex.Comm'n App.1935, opinion adopted); see also Hanover Modular Homes, Inc. v. Corpus Christi Bank & Trust, 476 S.W.2d 97, 101 (Tex.Civ.App.--Corpus Christi 1972, no writ). "[A] void judgment is one entirely null within itself, and which is not susceptible of ratification or confirmation, and its nullity cannot be waived." Easterline v. Bean, 121 Tex. 327, 49 S.W.2d 427, 429 (1932); see Holder v. Scott, 396 S.W.2d 906, 910-11 (Tex.Civ.App.--Texarkana 1965, writ ref'd n.r.e.).

Appellee argues that failure to acquire jurisdiction over the party merely renders the judgment voidable, as held in Tidwell v. Tidwell, 604 S.W.2d 540, 542 (Tex.Civ.App.--Texarkana 1980, no writ), in which that court stated, "A voidable judgment is one in which the trial court has jurisdiction of the subject matter, but fails to gain effective jurisdiction over the defendant." This statement is wrong. In Browning, the Supreme Court held:

And a judgment is void only when it is shown that the court had no jurisdiction of the parties or property, no jurisdiction of the subject matter, no jurisdiction to enter the particular judgment, or no capacity to act as a court.... All errors other than jurisdictional deficiencies render the judgment merely voidable, and such errors must be corrected on direct attack.

698 S.W.2d at 363. The opinion in Tidwell cites McEwen v. Harrison, 345 S.W.2d 706 (Tex.1961), and Deen v. Kirk, 508 S.W.2d 70 (Tex.1974), as authority for its contention.

However, neither Deen nor McEwen hold that. Instead, Deen and McEwen explain how a defendant may vacate a default judgment pursuant to Tex.R.Civ.P. 329b. In both cases, the trial courts' actions vacating the judgments were improper because the parties did not bring a bill of review before the trial court. In McEwen, the Supreme Court held that an appeal by writ of error or a bill of review were the exclusive methods by which Texaco (the defaulting party) could vacate the default judgment, since an appeal was no longer timely. 345 S.W.2d at 711. Never did the Supreme Court address the merits of Texaco's claim that the judgment was void, but simply held that Texaco did not adhere to proper avenues of review. In fact the Supreme Court stated, "Our judgment here is without prejudice to the right of Texaco, Inc. to file an appeal by writ of error or to file a bill of review to set aside the default judgment against it." 345 S.W.2d at 711. Deen and McEwen are not applicable here because the appellant timely perfected its appeal.

Appellee contends that appellant waived the right to complain of invalid service by failing to raise the point in its motion for new trial. We disagree. Tex.R.Civ.P. 324(b)(1) provides that a point in a motion for new trial is a prerequisite to a "complaint on which evidence must be heard such as one of jury misconduct or newly discovered evidence or failure to set aside a judgment by default." This is not a situation in which "evidence must be heard," as provided by Rule 324. If this was the situation, the "Craddock Test" would be appropriate. This is where a default judgment can be set aside and a new trial ordered when the failure of the defendant to answer before judgment was not intentional, or the result of conscious indifference on his part, but was due to a mistake or accident; provided that the motion for new trial sets up a meritorious defense and is filed at a time when the granting thereof will occasion no delay or otherwise work an injury to the plaintiff. Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d 124, 126 (Comm'n App. 1939, opinion adopted); see Strackbein v. Prewitt, 671 S.W.2d 37, 38 (Tex.1984).

Here, appellant's complaint is that the trial court lacked in personam jurisdiction to enter a default judgment due to invalid service. The rule in Texas is that the face of the record must affirmatively show jurisdiction over the defendant at the time of entering the default judgment. See Uvalde Country Club, 690 S.W.2d at 885; McKanna v. Edgar, 388 S.W.2d 927, 930 (Tex.1965); Cates, 663 S.W.2d at 101; Dan Edge Motors, Inc., 657 S.W.2d at 824. A point in a motion for new trial is not a prerequisite to a complaint on appeal of invalid service in a default judgment that is void. Tex.R.Civ.P. 324(a). Additionally, requiring a party to raise the voidness of a judgment as a point in a motion for new trial, or be subject to waiver of the point on appeal, would conflict with the Supreme Court's holding in Easterline, 49 S.W.2d at 429, that a void judgment cannot be waived.

Here, the face of the citation affirmatively shows that service of process was not perfected on the addressee, Jack Keith. ² Because the record fails to show a valid issuance and service of citation to the defendant, or a voluntary appearance prior to rendition of the default judgment, the judgment is void and must be reversed and the cause remanded. This is true notwithstanding statements made by appellant's trial counsel at the hearing on the motion for new trial that an agent of appellant received the service. The subsequent conduct of appellant does not eradicate the void judgment. Cates, 663 S.W.2d at 102; Dan Edge Motors, Inc., 657 S.W.2d at 824; See Easterline v. Bean, 121 Tex. 327, 49 S.W.2d 427, 429 (1932). The trial court should have granted a new trial. We sustain appellant's first point of error.

Having disposed of the controlling issue in this case, it is not necessary to address appellant's remaining points of error. Tex.R.App.P. 90(a). The judgment of the trial court is reversed, and the cause is remanded for a new trial.

SEERDEN, J., dissents.

SEERDEN, Justice, dissenting.

I respectfully dissent.

Without reaching the question of whether the return receipt fails to establish adequate service, I would hold that appellant has no right to complain of this default judgment by appeal.

The judgment by default was signed and entered on February 21, 1986. On March 21, 1986, while the trial court still had jurisdiction of the case, appellant filed his motion for new trial. In that motion, appellant not only failed to raise a point on invalid service, as mentioned by the majority, but stated affirmatively that "Service was had upon your Movant (appellant) by service upon its agent." Appellant's attorney swore to the statements in the motion by saying on his oath, "... I am personally familiar with all the facts recited in Defendant's Motion for New Trial and the...