Tex. Underground Utilities, Inc. v. Sw. Bell Tel. Co.

Decision Date03 August 2021
Docket Number01-19-00814-CV
PartiesTEXAS UNDERGROUND UTILITIES, INC., Appellant v. SOUTHWESTERN BELL TELEPHONE COMPANY, Appellee
CourtTexas Court of Appeals

Panel consists of Justices Countiss, Rivas-Molloy, and Guerra.

MEMORANDUM OPINION
Julie Countiss Justice

Appellant Texas Underground Utilities, Inc. ("Texas Underground"), challenges the trial court's no-answer default judgment in favor of appellee, Southwestern Bell Telephone Company ("Southwestern Bell"), in Southwestern Bell's suit against Texas Underground for negligence and strict liability. In five issues, Texas Underground contends that the trial court erred in denying its motion for new trial, the manner in which service was effected violated its due process rights and public policy the pleadings were insufficient to support the trial court's default judgment, and the evidence is legally insufficient to support the trial court's damages award.

We affirm.

Background

In its original petition, Southwestern Bell alleged that it is a "telephone corporation and a public utility" under Texas law. In keeping with its corporate mission Southwestern Bell "had three copper communications cables"- components of its telecommunications system-"buried below the surface of the right-of-way of Dairy View Lane approximately 92 feet north of Bissonnet Street in Houston, Harris County, Texas." In September 2017, Texas Underground "bored or excavated" at that location, "and when it did, it struck and damaged [Southwestern Bell's] cables."

Southwestern Bell asserted that Texas Underground violated the Underground Facility Damage Prevention and Safety Act[1] which requires "a person who intends to excavate" to "notify a notification center not earlier than the 14th day before the date the excavation is to begin or later than the 48th hour before the time the excavation is to begin, excluding Saturdays, Sundays, and legal holidays."[2] It explained that the "purpose of the notice is to allow [an] underground utility operator an opportunity to mark the approximate location of its underground facilities in advance of the excavation."[3]

According to Southwestern Bell, Texas Underground failed to provide the statutorily required notice and, as a result, was liable for the damages it caused during its excavation. Southwestern Bell brought claims against Texas Underground for negligence and strict liability. And it asserted that it "suffered actual, incidental[, ] and consequential damages[, ] including the costs to replace, repair and/or restore th[e] portion of its telecommunications system that was damaged," which amounted to "at least $20 486.11" but no more than "the jurisdictional limits of the [trial] [c]ourt." With the petition, Southwestern Bell propounded interrogatories, requests for admission requests for production, and requests for disclosure.

In its petition, Southwestern Bell identified Texas Underground as a Texas corporation that could "be served by serving its registered agent, Elizabeth Lugo, at its registered office at 5712 Val Verde, Suite 250, Houston, Texas 77057" (the "Val Verde address"). On March 6, 2019, the county clerk for Harris County issued a citation of service for Texas Underground through Lugo at the Val Verde address. A Harris County deputy constable attempted to serve the citation at that address on March 29, 2019. But the officer's return of citation filed April 15, 2019 with the clerk of the court, contains handwritten notes indicating that the Val Verde address was a "bad" address and explaining that there was "no such name or suite [number] on [the] door" and that the post office box showed that the address belonged to "ACTA/Pannell."

The deputy constable contacted Southwestern Bell's counsel and was instructed to "transfer" the citation to Texas Underground's business address, 8515 Cambridge Street, Houston, Texas 77054 (the "Cambridge Street address"). The deputy constable attempted to serve Texas Underground through Lugo at the Cambridge Street address during regular business hours on April 3, 2019, April 4, 2019, April 5, 2019, April 8, 2019, and April 10, 2019, leaving a card each time. None of these attempts was successful. In an affidavit, the deputy constable stated that "[i]t [wa]s impractical to procure service of [c]itation on [Texas Underground] . . . because he, she, they absent[ed] or secret[ed] himself, herself, or otherwise evade[d] such service each time [the deputy constable] . . . attempted to effect such service on him, or her, in th[e] cause." And the deputy constable added that "Lugo d[id] work at th[e] [Cambridge Street address] but was not stated [sic] by the receptionist."

On April 16, 2019, Southwestern Bell amended its petition[4] and sought to serve citation on the Secretary of State.[5] The return of citation executed by a deputy constable in the Travis County Constable's Office, Precinct Five, and filed with the clerk of the court, states that on May 8, 2019, the deputy constable delivered "duplicate true copies of the citation together with accompanying duplicate true copies" of Southwestern Bell's first amended petition and discovery requests to the Secretary of State's designated agent for service. The Secretary of State issued a Certificate of Fact certifying that Texas Underground is an existing, for-profit domestic entity and that the Secretary of State's records show Lugo as the entity's designated agent for service and the Val Verde address as the entity's designated address for service. And in a written certification, Deputy Secretary of State Jose Esparza certified that on May 10, 2019 "a copy of the Citation and Plaintiff's First Amended Petition and Request for Disclosures was forwarded" to Lugo at the Val Verde address by certified mail, return receipt requested, and was returned to the Secretary of State's office on June 3, 2019 "[b]earing the notation Return to Sender, Unclaimed, Unable to Forward."

After Texas Underground did not answer Southwestern Bell's suit by June 3, 2019, or otherwise appear, Southwestern Bell moved for a default judgment. Southwestern Bell attached to its motion the affidavit of Paul Hartwell, a Senior Risk Specialist for Southwestern Bell. Hartwell attested to Southwestern Bell's business records documenting "the labor and materials used and the expenses incurred to repair the telecommunications cables that were damaged in the right-of-way of Dairy View Lane north of Bissonnet Street on or about September 7, 2017." Those business records accompanied Hartwell's affidavit. Hartwell also stated in his affidavit that "as part of [his] job, [he] ha[d] learned in general what [wa]s involved in the repair of telecommunications cables and related facilities" and he had "become familiar with the costs and expense of the labor and material necessary to repair communications facilities." And he averred that "[t]he claim against [Texas Underground] for repair costs in the amount of $20, 486.11 [was] just, reasonable and was incurred by [Southwestern Bell]." After Southwestern Bell supplemented its motion with a copy of the return from the Secretary of State, the trial court rendered a default judgment in favor of Southwestern Bell, awarding it $20, 486.11 in damages, plus pre-judgment interest and costs.

Texas Underground first appeared in the case and moved for new trial on September 5, 2019. In its motion, Texas Underground asserted that Southwestern Bell had failed to provide it with proper notice of suit because Southwestern Bell "knew or should have known" that the registered agent's address on file with the Secretary of State "was not the correct address on which to serve [Texas Underground]" and was not the address of Texas Underground's "home office." According to Texas Underground, Southwestern Bell "knew that the Val Verde address was no good," and the Deputy Secretary of State's certification showed that the citation, first amended petition, and discovery requests were sent to that address even though Southwestern Bell knew the correct address. Thus, Texas Underground asserted that it did not receive notice of Southwestern Bell's suit. Texas Underground also summarily asserted that the "Craddock[6] [f]actors [were] satisfied."

In its response to the motion for new trial, Southwestern Bell asserted that the record showed it exercised reasonable diligence in attempting to serve Texas Underground and because Texas Underground's registered agent could not be found at its registered office, Southwestern Bell properly served Texas Underground through the Secretary of State.[7] The Secretary of State's Certificate of Fact filed with the clerk of the court on June 18, 2019 showed that Texas Underground's registered agent was Lugo and that the address of Texas Underground's registered office was the Val Verde address. Thus, Southwestern Bell asserted that Texas Underground's failure to receive notice of the suit was due solely to its failure to comply with its duty to provide the Secretary of State with current and accurate information on the whereabouts of its registered office and the identity of its registered agent.[8] Because Texas Underground had not established that "it was never served or that service was improper," Southwestern Bell also argued that Texas Underground was required to satisfy the requirements of Craddock v. Sunshine Bus Lines Inc., 133 S.W.2d 124 (Tex. 1939), which it had failed to do.

After a hearing, [9] the trial court denied Texas Underground's motion for new trial.

Motion for New Trial

In its first issue, Texas Underground argues that the trial court erred in denying its motion for new trial because it ...

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