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Fourteenth Court of Appeals
KLEIN INDEPENDENT SCHOOL DISTRICT, HARRIS COUNTY, HARRIS COUNTY EDUCATION DEPARTMENT, PORT OF HOUSTON OF HARRIS COUNTY AUTHORITY, HARRIS COUNTY FLOOD CONTROL DISTRICT, NORTH HARRIS MONTGOMERY COLLEGE, HARRIS COUNTY HOSPITAL DISTRICT, HARRIS COUNTY RURAL FIRE PREVENTION DISTRICT 16, HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NUMBER 114, Appellees
O P I N I O N
In this restricted appeal, appellant
Conseco Finance Servicing Corporation f/k/a Green
Tree Financial Servicing Corporation (“Conseco”)
challenges the default judgment entered in favor of appellees,
Flood Control District, North Harris Montgomery College, Harris County Hospital District, Harris County Rural Fire Prevention District 16, and Harris County Water Control and Improvement District Number 114 (collectively, “taxing units”), for delinquent property taxes due on a parcel of land owned by Conseco. Conseco contends the trial court erred in granting the default judgment because the record does not show strict compliance with the Texas Rules of Civil Procedure regarding issuance of citation and return of service, thereby rendering the service insufficient to confer personal jurisdiction over Conseco. Because the record shows strict compliance with the rules and because the citation and return were not defective, we affirm the default judgment.
I. Factual and Procedural Background
Klein ISD brought suit against Larry
and Stacy Meeusen to collect delinquent ad valorem property taxes.
Conseco, as a lienholder
on the Meeusen property, was also named in the tax
suit. Klein ISD sought establishment and
foreclosure of liens on the property to secure payment of the past due taxes.
The citation, issued on
CONSECO FINANCE SERVICING CORPORATION F/K/A GREEN
TREE FINANCIAL SERVICING CORPORATION
BY SERVING ITS REGISTERED AGENT: C.T. CORPORATION SYSTEM BY SERVING ITS REGISTERED AGENT: SHIRLEY DILLON
The citation also contained the following recitation:
The name [sic] of all taxing units which assess and collect taxes who may set up their claims to seek recovery of delinquent ad valorem taxes on said property not made a party to said suit are: Harris County, Texas;
NORTH HARRIS MONTGOMERYCOLLEGE; [sic] HARRIS COUNTYWATER [sic] CONTROL AND IMPROVEMENT DISTRICT #114; HARRIS COUNTY RURAL FIRE PREVENTION DISTRICT #16class=Section3>
The citation included other
pertinent information and ordered appellant to file a written answer within the
time set out in Texas Rule of Civil Procedure 99b. The Dallas County Sheriff’s Department
received the citation for execution on
October 5, 2000, the taxing units named in the citation (other than Klein ISD),
plus four others — Harris County Education Department, Port of Houston of
Harris County Authority, Harris County Flood Control District, and Harris
County Hospital District — filed a plea in intervention. Each intervenor
sought to recover ad valorem property taxes on the
same parcel of land. Conseco
failed to answer or appear in the case.
Conseco claims it first realized that a default judgment had been taken against it when the property made the subject of the tax suit was sold at a tax sale in February of 2001. At the time of the tax sale, Conseco was the owner of the property, having foreclosed its purchase money lien in January of 2001. Conseco now directly attacks the trial court’s judgment by restricted appeal. See
Tex. R. App. P. 30.
II. Standard of Review
A direct attack on a judgment by
restricted appeal must: (1) be brought within six months after the trial court
signs the judgment; (2) by a party to the suit; (3) who did not participate in
the hearing that resulted in the judgment made the subject of the complaint;
(4) who did not file a post-judgment motion, request for findings of fact and
conclusions of law, or other notice of appeal; and (5) the error that forms the
basis of the complaint must be apparent on the face of the record. See
id.; Norman Communications v. Texas Eastman Co., 955 S.W.2d 269, 270 (
Review by restricted appeal affords the appellant a review of the entire case, just as in an ordinary appeal, with the only restriction being that any error must appear on the face of the record. See Norman Communications, 955 S.W.2d at 270. The face of the record for purposes of a restricted appeal consists of all the papers on file before the judgment as well as the reporter’s record. See id. Conseco has met the criteria for a restricted appeal. Conseco brought this attack within six months after the judgment was signed. Conseco is a party to the suit and did not participate at trial or file post-judgment motions or other notice of appeal. The claimed error — alleged defective service — can be determined from the face of the record.
III. Issues Presented on Appeal
In its sole issue, Conseco contends the citation was defective, thereby rendering the service insufficient to sustain personal jurisdiction over Conseco. Within this issue, Conseco alleges three specific grounds in support of its argument that the citation is defective. First, Conseco contends that Article 2 of the Texas Business Corporation Act does not authorize service of process on a corporation “by service on the registered agent of the registered agent of a corporation.” Thus, Conseco argues, service on Shirley Dillon, the registered agent of C.T. Corporation System, which is the registered agent of Conseco, was not proper service. Next, Conseco argues that the date of service on the return is unrecognizable and, therefore, does not strictly comply with Texas Rules of Civil Procedure 16 and 105, requiring time and date on the return. See Tex. R. Civ. P. 16 (requiring server to endorse process with day and hour of receipt and the time and place of service); Tex. R. Civ. P. 105 (requiring officer to execute and return process without delay). Finally, Conseco argues that the citation is fatally defective because it did not name all of the taxing units that assess and collect taxes on the delinquent property, as required by Texas Rule of Civil Procedure 117a.
IV. Sufficiency of Return of Service
A. Was service on the registered agent of the registered agent proper?
contends that Article 2 of the Texas Business Corporation Act does not
authorize service of process on a corporation “by service on the registered
agent of the registered agent of a corporation.” Articles 2.09 and 2.11 of the Texas Business
Corporation Act apply to Conseco because Conseco is a corporation doing business in
A. Each corporation shall have and continuously maintain in this State:
(1) A registered office which may be, but need not be, the same as its place of business.
(2) A registered agent, which agent may be either an individual resident in this State whose business office is identical with such registered office, or a domestic corporation, or a foreign corporation authorized to transact business in this State which has a business office identical with such registered office.
Tex. Bus. Corp. Act art. 2.09 (
The president and all vice presidents of the corporation and the registered agent of the corporation shall be agents of such corporation upon whom any process, notice, or demand required or permitted by law to be served upon the corporation may be served.
Bus. Corp. Act art. 2.11 (
The record shows the citation was
issued to Conseco “by serving its registered agent:
C.T. Corporation System by serving its registered agent: Shirley Dillon” at
Conseco argues that because an individual, Shirley Dillon, was served and there was an allegation in the petition that she was the registered agent of the registered agent of Conseco (and not the registered agent of Conseco), there is too much “room for error that the individual served was not the person or entity required to be served pursuant to Art. 2.11 of the Texas Business Corporation Act.” Conseco’s argument lacks merit.
Relying on the
holding in NBS Southern, Inc. v. The Mail Box, Inc., Conseco
argues that the record does not prove Shirley Dillon was the registered agent
of either Conseco or C.T. Corporation System at the
time of service. 772
S.W.2d 470 (Tex. App.—Dallas 1989, writ denied). In NBS
Southern, Inc., the trial court entered a default judgment against NBS, and
the appellate court reversed, finding defective service of process.
We decline to follow the holding in NBS Southern Inc., and instead follow
the majority of courts of appeals that hold to the contrary. In most courts, a recital in the petition
that a named person or entity is the registered agent for service on the
defendant is prima facie evidence of that fact, sufficient to support a default
unless the defaulted defendant proves otherwise. See, e.g., K-Mart Apparel Fashions v. Ramsey, 695 S.W.2d 243, 256
(Tex. App.—Houston [1st Dist.] 1985, writ ref’d n.r.e.) (affirming default judgment when nothing in
record contradicted petition, citation, and return asserting that person served
was defendant’s registered agent); Cox
Marketing v. Adams, 688 S.W.2d 215, 218 (Tex. App.—El Paso 1985, no writ)
(holding no extrinsic proof of status necessary when petition and citation
alleged that person served was registered agent, and defendant did not file an
affidavit or motion to quash challenging these assertions.) The majority rule that allegations in the
service documents are prima facie proof of capacity parallels the rules for
most other aspects of service. See Primate Const. v. Silver, 884 S.W.2d
151, 152 (
concedes that “[a]ccording to the return it appears
that Shirley Dillon was actually the person served with citation as registered
agent of C.T. Corporation System.” A
corporation may be named as a registered agent.
Conseco’s registered agent, C.T. Corporation
is itself a corporation that must maintain its own registered agent in
B. Was the date of service on the return recognizable?
argues that the date of service on the return is unrecognizable and, therefore,
does not strictly comply with the Texas Rules of Civil Procedure, which require
a notation of the time and date on the return.
See Tex. R. Civ. P. 16 (“Every officer
or authorized person shall endorse on all process and precepts coming to his
hand the day and hour on which he received them . . . and the time and place
the process was served.”); Tex. R. Civ. P. 105
(“The officer or authorized person to whom process is delivered shall
endorse thereon the day and hour on which he received
it, and shall execute and return the same without delay”); Tex. R. Civ. P. 107 (“the
return of the officer executing the citation . . . shall state when the
citation was served.”) Conseco relies on a century-old case, Llano Improvement Co. v. Watkins, 23 S.W. 612 (Tex. Civ. App.—Austin 1893, writ dism’d),
in support of its argument that an illegible date renders service
defective. In the Llano case, return of service indicated that the citation “Came to
hand the 24th day of September, A.D. 1891, at , and executed the 24th day of , A. D. 189 --, by delivering to . . .”
“A return should be given a fair, reasonable and natural construction to its plain intent and meaning.” Bavarian Autohaus, Inc. v. Holland, 570 S.W.2d 110, 114 (Tex. App.—Houston [1st Dist.] 1978, no writ); accord Johnson v. Cole, 138 S.W.2d 910, 912 (Tex. App.—Austin 1940, writ ref’d) (stating that, in view of the printed year dates on the form of the citation and the year the citation was issued, there was no doubt as to the year endorsed by the officer on the return); Nelson v. Remmert, 726 S.W.2d 171, 172 (Tex. App.—Houston [14th Dist.] 1987, writ ref’d n.r.e.) (holding officer’s return complied with Rule 107 when officer endorsed that he served the citation by certified mail on December 10, 1985 and the actual date the citation was delivered or received was omitted but the postmark on the return receipt was dated December 14, 1985); Pratt v. Moore, 746 S.W.2d 486, 488 (Tex. App.—Dallas 1988, no writ) (holding when citation was issued on October 11, 1986, and return showed it was served on November 11, 1986 and filed with the court on November 14, 1986, return was not fatally defective for officer’s erroneous typographical endorsement that he had recorded it on November 30, 1986, as this was clearly error that should have read “October”). Viewing the return as a whole, the handwritten date is plainly discernable.
C. Does the failure to name all taxing units, as
Finally, Conseco argues that the citation is fatally defective because it did not name all of the taxing units that assess and collect taxes on the delinquent taxpayers’ property as required by Texas Rules of Civil Procedure 117a. See Tex. R. Civ. P. 117a(4).
Texas Rule of Civil Procedure 2 specifically instructs “that Rule 117a shall control with respect to citation in tax suits.” Tex. R. Civ. P. 2. Rule 117a, in turn, states: “In all suits for collection of delinquent ad valorem taxes, the rules of civil procedure governing issuance and service of citation shall control the issuance and service of citation therein, except as herein otherwise specially provided.” Tex. R. Civ. P. 117a (emphasis added). Subsection 1 of Rule 117a, entitled, “Personal Service: Owner and Residence Known, Within State,” states:
Where any defendant in a tax suit is a resident of the State of Texas . . . the process shall conform substantially to the form hereinafter set out for personal service and shall contain the essential elements and be served and returned and otherwise regulated by the provisions of Rules 99 to 107 inclusive.
Tex. R. Civ. Proc. 117a(1) (emphasis added). Section 4 of Rule 117a, which sets forth the requirements for citation in tax suits, states in part:
Any process authorized by this rule may issue jointly in behalf of all taxing units who are plaintiffs or intervenors in any tax suit. The statement of the nature of the suit . . . shall be sufficient if it . . . shall state, in substance, that in such suit the plaintiff and all other taxing units who may set up their claims therein seek recovery of the delinquent ad valorem taxes due on said property . . . Such citation shall also show the names of all taxing units which assess and collect taxes on said property not made parties to such suit . . .
Tex. R. Civ. P. 117a(4) (emphasis added). Rule 117a(4) also contains this additional language:
After citation . . . has been given on behalf of any plaintiff or intervenor taxing unit, the court shall have jurisdiction to hear and determine the tax claims of all taxing units who are parties plaintiff, intervenor or defendant at the time such process is issued and of all taxing units intervening after such process is issued . . . without the necessity of further citation . . . and any taxing unit having a tax claim against said property . . . may . . . set up and have determined its tax claim without the necessity of further citation or notice to any parties to such suit.
Here, there were more taxing units named in the default judgment than were named in the citation, and no subsequent citations were served to give the defendant (Conseco) notice that additional, previously unnamed taxing units, had since intervened. The following taxing units were named in the original citation:
Harris Countywater Control and Improvement District 114, and
Four more taxing units, not named in the original citation, later intervened:
Harris County Education Department,
Harris County Flood Control District, and
Harris County Hospital District.
only three, Klein ISD,
The taxing units, relying on Mexia Indep. Sch. Dist. v. City of Mexia, argue that a defendant is charged with knowledge of the law and must know from the nature of the suit that the claims of other taxing units may be addressed without further citation. 133 S.W.2d 118, 121–22 (Tex. 1939) Although Mexia addresses the issue of intervening taxing units identified in the original citation, and the case before us involves intervenors not identified in the original citation as required by Rule 117a, Mexia is still instructive.
In Mexia, as in this case, only one
citation was served on the defendant in a suit to recover delinquent property
All parties to this suit, including Plaintiffs, Defendants and Intervenors, shall take notice that claims not only for taxes which were delinquent on said property at the time this suit was filed, but all taxes which become delinquent thereon at any time thereafter up to the day of judgment . . . and all said parties shall take notice of and plead and answer to all claims and pleadings now on file and which may hereafter be filed in this cause by all other parties . . .
ultimate issue before the Mexia court was whether the trial court had jurisdiction to
enter a judgment in favor of Mexia ISD, upon its plea
of intervention and cross-action without further notice to the property
Rule 117a stands for the proposition that all taxing units that assess and collect taxes on the described property not made parties to such suit may later join the tax suit without the issuance and service of an additional citation. The permissive language in Rule 117a(4) indicates an intent to give all other taxing units the discretion to join the suit, rather than giving the taxing unit instituting the suit discretion to exclude other taxing units, or cause them to have to obtain issuance of their own citations. This rule thus protects all other taxing units whose interests are at stake in the event the property must be sold to pay a tax debt. Rule 117a does not require other taxing units to join a tax suit, but it clearly permits them to intervene without further service. It appears that the primary purpose of the rule was to discourage multiple suits by making it easier for taxing units to intervene in a tax suit brought by another taxing unit — not to protect the interests of one who has failed to pay taxes. The unnamed taxing units did not recover anything in the default judgment against Conseco, and they have not appealed this judgment.
The purpose of citation is to give
the court proper jurisdiction over the parties and to provide notice to the
defendant that it has been sued, by a particular party asserting a particular
claim, so that due process will be served and the defendant will have an
opportunity to appear and defend the action. Sgitcovich v. Sgitcovich, 150
This citation gave Conseco all the notice to which it was entitled and gave Conseco the opportunity to appear and defend the suit. Conseco points to
no evidence that it was misled or placed at a disadvantage by the citation and
pleadings. In fact, Conseco
concedes C.T. Corporation System’s registered agent, Shirley Dillon, actually
received service. Although the citation
did not name all taxing units that may have had a claim against the property,
it was not necessary to do so in this case because the taxing units that were
not named did not recover anything and are not seeking reversal. Furthermore, extensive research has not revealed
a single case in
V. Cross-Point Requesting Sanctions For Frivolous Appeal
An interested party, Donald Burkhardt, who purchased the property at the tax sale, requests this court to sanction Conseco for filing a frivolous appeal. Rule of Appellate Procedure 45 states:
If the court of appeals determines that an appeal is frivolous, it may – on motion of any party or on its own initiative, after notice and a reasonable opportunity for response – award each prevailing party just damages. In determining whether to award damages, the court must not consider any matter that does not appear in the record, briefs, or other papers filed in the court of appeals.
Tex. R. App. P. 45.
to grant sanctions is a matter of discretion that we exercise with prudence and
caution, and only after careful deliberation.
We affirm the trial court’s judgment.
/s/ Kem Thompson Frost
rendered and Opinion filed
Panel consists of Chief Justice Brister and Justices Anderson and Frost.
Publish — Tex. R. App. P. 47.3(b).