North Carolina Mut Life v. Whitworth

• Decision Date: 06 November 2003
• Docket Number: No. 03-02-00744-CV.,03-02-00744-CV.
• Citation: 124 S.W.3d 714
• Parties: NORTH CAROLINA MUTUAL LIFE INSURANCE COMPANY, Appellant v. ERIN WHITWORTH, Appellee.
• Court: Texas Supreme Court

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124 S.W.3d 714

NORTH CAROLINA MUTUAL LIFE INSURANCE COMPANY, Appellant v. ERIN WHITWORTH, Appellee.

No. 03-02-00744-CV.

Court of Appeals of Texas, Third District, Austin.

Filed: November 6, 2003.

Mr. Kevin W. Cole, and Ms. Jennifer A. Powell — Cole & Powell, P.C., 400 West 15th St., Suite 304, Austin, TX 78701, for Appellant.

Mr. Jerry Galow — Mr. Cory Smith, Galow, Smith & Morrison, PC, 1204 Nueces St., Austin, TX 78701, for Appellee.

Before Chief Justice LAW, Justices B. A. SMITH and PURYEAR.

OPINION

W. KENNETH LAW, Chief Justice.

In this restricted appeal, North Carolina Mutual Life Insurance Company appeals a $1.725 million no-answer default judgment rendered against it and in favor of Erin Whitworth. Appellant contends that Whitworth failed to show proper service because of discrepancies between the name and address listed in the petition and citation and the name and address listed in the return of service. We will reverse the judgment and remand the cause for further proceedings.

BACKGROUND

Whitworth had a health insurance policy under which she believed appellant would pay her medical expenses. She alleged that, when she suffered brain damage and injuries in an automobile accident, appellant conditioned payment of her medical expenses on her signing a subrogation agreement that differed materially from the policy terms by creating additional rights for appellant. Whitworth alleged that, when she refused to sign the subrogation agreement, appellant denied her claims based on an inapplicable exclusion in the policy. She asserted that this was a breach of the policy and a violation of the Deceptive Trade Practices Act.

Whitworth alleged in her petition that appellant's agent for service of process was Isaac E. Henderson, 2646 South Loop West 510, Houston, Texas 77054.¹ The return of service, which is addressed to North Carolina Mutual Life Insurance Company, states that citation and the original petition were served on August 19, 2002 upon North Carolina Mutual Insurance Company by personally serving its registered agent, Isaac E. Henderson, at 2656 So. Loop West #560, Houston, TX 77054. Thus, the address where citation was served and the party on whom it was served differ from the address and party listed in the petition; the address on South Loop West at which citation was served is 2656 instead of 2646, the suite number served is 560 instead of 510, and the recipient listed in the return of service lacks the word "Life" compared to the defendant in the petition and listed on the citation. The record shows that Henderson had moved to the new address, but there is no indication that the defendant company had changed its name.

The record contains exhibits regarding what Henderson did after receiving service. He sent a letter to appellant by certified mail dated September 26, 2002, received the return receipt, and faxed copies of the letter and receipt to Whitworth. In the letter to appellant, Henderson wrote:

Enclosed please find an Original Petition in the above matter which has been served upon me as your registered agent for the State of Texas. While I do not recall ever agreeing to serve as your agent in the State of Texas, I am forwarding this petition to you because my name is on file in the Secretary of State's Office for the State of Texas as your registered agent. Please appoint a registered agent for your company in the State of Texas at once. I will take steps to remove my name as your agent.

You should obtain the services of a lawyer to represent your company at once.

The return receipt indicates that Henderson sent the letter on September 27, 2002, and that the letter was delivered on September 30, 2002.

On October 7, 2002, Whitworth appeared in the district court and moved for default judgment. The court found that the return of service had been on file with the court for at least ten days, that the deadline for appellant to file an answer was September 9, 2002, and that appellant had not filed an answer. Whitworth offered and the court admitted ten exhibits. These exhibits included letters between appellant and Whitworth regarding the subrogation agreement and appellant's denial of coverage. Also included were the petition, the citation and return, the faxed copy of the letter from Henderson to appellant, the faxed certified mail return receipt from appellant, and Whitworth's medical bills. The court reporter did not record the hearing.

By judgment signed October 8, 2002, the district court granted the default judgment. The court awarded Whitworth $125,000 in actual damages, $1,000,000 in exemplary damages, and $600,000 in attorney's fees.

Appellant filed a motion for new trial on November 8, 2002 — a day after the thirty-day period expired. See Tex.R.Civ.P. 329b(a). Appellant asserts that this tardiness was due to misinformation from the clerk's office; the motion for new trial recites that the judgment was signed on October 11, 2002, which is three days after the court actually signed the judgment. This motion was untimely filed, and no extensions are possible under the rules. See id. Although this motion and related documents are contained in the appellate record, we may not consider them because the motion was not timely.

On November 26, 2002, appellant filed a notice of restricted appeal.

DISCUSSION

Appellant is eligible to challenge this judgment by writ of error. See Tex.R.App.P. 30. Replacing writ of error practice, review by restricted appeal affords the appellant a review of the entire case so long as the error complained of appears on the face of the record. Id.; Conseco Fin. Servicing v. Klein Indep. Sch. Dist., 78 S.W.3d 666, 670 (Tex.App.-Houston [14th Dist.] 2002, no pet.); see also Norman Communications v. Texas Eastman Co., 955 S.W.2d 269, 270 (Tex. 1997). The reviewable record includes all papers on file before the judgment as well as the reporter's record. See Conseco, 78 S.W.3d at 670.

In reviewing a default judgment on restricted appeal, we do not presume that citation was validly issued, served, or returned. Primate Constr., Inc. v. Silver, 884 S.W.2d 151, 152 (Tex. 1994); TAC Ams., Inc. v. Boothe, 94 S.W.3d 315, 319 (Tex.App.-Austin 2002, no pet.). The record must show strict compliance with the rules of procedure governing service of citation and return of service. Primate, 884 S.W.2d at 152; Boothe, 94 S.W.3d at 319. Failure to affirmatively show strict compliance with the Rules of Civil Procedure renders the attempted service of process invalid and of no effect. Boothe, 94 S.W.3d at 319. "[A] default judgment cannot withstand direct attack by a defendant who complains that he was not served in strict compliance with applicable requirements." Wilson v. Dunn, 800 S.W.2d 833, 836 (Tex. 1990). The rule at issue provides in relevant part as follows:

The return of the officer or authorized person executing the citation shall be endorsed on or attached to the same; it shall state when the citation was served and the manner of service and be signed by the officer officially or by the authorized person. The return of citation by an authorized person shall be verified.

Tex.R.Civ.P. 107. Regarding returns of service, the supreme court opined:

The return of service is not a trivial, formulaic document. It has long been considered prima facie evidence of the facts recited therein. The recitations in the return of service carry so much weight that they cannot be rebutted by the uncorroborated proof of the moving party. The weight given to the return is no less when the recitations impeach the judgment than when they support it.

Primate, 884 S.W.2d at 152 (citations omitted). Strict compliance with citation rules does not, however, require "absolute obeisance to the minutest detail," See Herbert v. Greater Gulf Coast Enters., Inc., 915 S.W.2d 866, 871 (Tex.App.-Houston [1st Dist.] 1995, no writ).

Strict compliance requires that the name of the party listed in the return of service essentially match the name of the party named in the citation or petition. See 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). This requirement is not new. See Hendon v. Pugh, 46 Tex. 211, 212 (1876) (return showing service on "J.N. Hendon" not sufficient to show service on defendant J.W. Hendon). In Hercules, the court of appeals reversed a default judgment because the return of citation reflected that "Hercules Concrete Pumping" was served, when Hercules Concrete Pumping Service, Inc. was the defendant to whom the citation was directed. Id. at 310-11. The court of appeals held that the return failed to show proper service because there was no showing that the company in the return that lacked the word "Service" in its name was the same company as the defendant whose name included the word "Service." Id. at 311. The court reasoned that "[i]t is common knowledge that related corporate entities often share a portion of the same name, but are, nonetheless, separate and distinct corporate entities." Id. Not all discrepancies will negate service, however; omission of the business form (like "Inc."), insignificant words (like "at"), or an accent mark over a letter from a company name on the service return will not invalidate service. See id.; see also Ortiz v. Avante Villa at Corpus Christi, Inc., 926 S.W.2d 608, 613 (Tex.App.-Corpus Christi 1996, writ denied).

The insistence by the Hercules court that the name in the return match the name in the citation to sustain a default judgment is consonant with holdings in similar instances by the supreme court and this Court. Compare Hercules, 62 S.W.3d at 311, with Uvalde Country Club v. Martin Linen Supply Co., 690 S.W.2d 884, 884-85 (Tex. 1985), and Union Pacific Corp. v. Legg, 49 S.W.3d 72, 78 (Tex.App.-Austin 2001, no pet.). The supreme court held that the name of the agent for service of process alleged in the petition...