Court of Appeals of Texas, Houston (1st Dist.).
PAUL MICHAEL CONSTRUCTION, INC., Appellant
v.
PINES OF WESTBURY, LTD., Appellee
NO. 01-97-00533-CV
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Oct. 1, 1998.
On Appeal from the 165th District Court Harris County, Texas Trial Court Cause No. 96-20648-A
Panel consists of SCHNEIDER C.J., WILSON and ANDELL, J.J.
OPINION
ERIC ANDELL, J.
*1 This is an appeal from a default judgment. Defendant/appellant Paul Michael Construction, Inc. (PMC) appeals a judgment awarding plaintiff/appellee Pines of Westbury, Inc. (Pines) $212,236.17, the amount of a lien PMC filed on Pines’s property. We affirm.
Background
Pines hired PMC to renovate an apartment complex in Harris County, but later fired them. PMC sued Pines in Dallas County for breach of contract and filed a lien in Harris County. Pines, in turn, sued in Harris County to quiet title.
The Harris County court rendered a default judgment for Pines and denied PMC’s plea in abatement, motion to vacate the judgment, and motion for new trial.
PMC complains the trial court erred in rendering the default judgment because Pines did not properly serve process. Specifically, PMC complains, in points of error one and two, that service upon the Secretary of State was not valid because (1) no service return was on file and (2) service was not on file for 30 days before the court rendered judgment.1 In points of error three through five, PMC complains that the court should have granted its motion for new trial because it satisfied the Craddock2 test. In point of error six, PMC complains the court erred in not dismissing Pines’s claims because dominant jurisdiction existed in Dallas County.
Service of Process
In point of error one, PMC complains the court should not have entered a default judgment because Pines did not sufficiently prove PMC had been served.
1. Did Pines Follow the Proper Procedure?
Pines attempted substituted service upon the Secretary of State. PMC says service was insufficient. Corporations have a statutory duty to maintain a registered agent and office and to notify the Secretary of State of any change to either. See Tex. Bus. Corp. Act art. 2.10, 2.10-1; Tankard-Smith, Inc. v. Thursby, 663 S.W.2d 473, 475 (Tex.App.-Houston [14th Dist.] 1983, writ ref’d n.r.e.). When a plaintiff cannot, through the exercise of reasonable diligence, serve a corporation at its registered office, he may serve process by substitute service on the Secretary of State. Tex. Bus. Corp. Act art. 2.11(B). A party that qualifies to serve process pursuant to article 2.11(B) is not required to take any action other than that prescribed by statute. Tankard-Smith, Inc. 663 S.W.2d at 475.
A. Did Pines Exercise Due Diligence?
Pines offered the following as proof of reasonable diligence in attempted service:
1. A constable’s affidavit that the certified mail receipt was returned marked “unclaimed”;
2. Peter A. Barrera’s affidavit testimony that he attempted personal service five times at the registered agent’s office and residential addresses, but was unsuccessful;
3. Steven Walter Thomas’s affidavit testimony that he attempted personal service eight times at the registered agent’s residential address, but was unsuccessful;
*2 4. Affidavit of Pines’s attorney, Cynthia J. Thomson, stating that (1) she discussed this case with and in the presence of PMC’s attorneys and Paul Kester’s wife,3 Helen Kester, and they were all clearly aware of this suit before judgment was rendered, and that (2) she mailed copies of the petition to the registered agent’s office and residential addresses.
In all, Pines offered proof that it attempted to serve PMC 16 times before serving the Secretary of State.
B. Did Pines Meet the Formal Requirements of Article 2.11(B)?
Pines then offered the Secretary of State’s certificate to show compliance with the statutory requirements. The Secretary of State mailed citation and petition to PMC’s registered agent’s last known address. This process was returned bearing the notation “Attempted-Not Known.” The record shows that Pines strictly complied with the statutory method of service of process as authorized by article 2.11. Thus, PMC’s assertions that Pines failed to duly cite and serve through service upon the Secretary of State are without merit.
Pines offered the Secretary of State’s certificate which states that two copies of the citation and petition in this cause were served upon the Secretary of State on November 6, 1996, and were forwarded on November 12, 1996, by certified mail, return receipt requested to the corporation at its registered address, 5643 Anita, Dallas, Texas 75206, to the attention of its registered agent, Paul Michael Kester. The representations made in the certificate indicate that service was effected in full compliance with 2.11(B). The Secretary of State’s certificate was “conclusive evidence” that citation was served in compliance with article 2.11. G.F.S. Ventures Inc. v. Harris, 934 S.W.2d 813, 817 (Tex.App.-Houston [1st Dist.] 1996, no writ).
Because Pines offered sufficient proof that it was not able to serve PMC and that it thereafter pursued valid substituted service on the Secretary of State, we overrule point of error one.
2. Was Service Timely?
In point of error two, PMC complains service was returned in less than 30 days.4 The record shows that Pines served the Secretary of State on November 6, 1996, and returned proof of service on January 7, 1997. Service was returned far more than 30 days after service on the Secretary of State.
PMC also alleges that the trial court’s grant of default judgment was in error because Rule 107 requires proof of service to be on file with the clerk for ten days, exclusive of the day of filing and the day of judgment. Pines offered the Secretary of State’s certificate which was filed on January 7, 1997. The court rendered default judgment on January 24, 1997. Thus, proof of service was on file for more than ten days before the judgment, exclusive of the day of filing and the day of judgment.
We overrule point of error two.
Motion for New Trial
In points of error three, four, and five, PMC complains that the trial court erred by denying its motion for new trial. In point of error six, PMC complains the court erred by not dismissing Pines’s claims.
1. Standard of Review
*3 A motion for new trial is addressed to the trial court’s discretion and the court’s ruling will not be disturbed on appeal absent an abuse of discretion. Director, State Employees Workers’ Compensation Div. v. Evans, 889 S.W.2d 266, 268 (Tex.1994). In the case of a default judgment, a trial court abuses its discretion by not granting a new trial when all elements of the test set forth in Craddock are met. 134 Tex. at 390, 133 S.W.2d at 126 (1939). Under Craddock:
A default judgment should be set aside and a new trial ordered in any case in which (1) 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 an accident; provided (2) the motion for new trial sets up a meritorious defense and (3) is filed at a time when the granting thereof will occasion no delay or otherwise work an injury to the plaintiff.
Id.
A. Was PMC’s Non-Answer Intentional or the Result of Conscious Indifference?
Determining if a party’s failure to answer was intentional or resulted from conscious indifference is a question of fact. State Farm Life Ins. Co. v. Mosharaf, 794 S.W.2d 578, 583 (Tex.App.-Houston [1st Dist.] 1990, no writ). Courts apply the standard liberally and each case depends on its own facts. Id. at 582. The applicable standard is not whether a party was negligent, but whether there was an absence of bad faith. Id. at 583. Even a slight excuse will suffice. J.H. Walker Trucking v. Allen Lund Co., 832 S.W.2d 454, 455 (Tex.App.-Houston [1st Dist.] 1992, no writ). Conscious indifference has also been defined as not taking action that would seem necessary to a person of reasonable sensibilities under the same circumstances. Johnson v. Edmonds, 712 S.W.2d 651, 652-53 (Tex.App.-Fort Worth 1986, no writ).
At the hearing on the motion for new trial, PMC’s attorney admitted that PMC’s registered agent had actual knowledge of the suit before the judgment. The relevant testimony from the record stated:
THE COURT: All right. You see what troubles me, Mr. De La Garza, is that there seems to be no question from the file itself that Mr. Kester was well aware that there was some effort at getting him served in a lawsuit out of Harris County; did I err in that?
MR. DE LA GARZA: Your Honor, Mr. Kester was aware that a lawsuit had been filed. He was not awar[e] of all the various efforts that they claim they were making to serve him. And I’m not disputing the constable’s affidavits …
The admissions sufficed to show PMC’s failure to answer was either intentional or the result of conscious indifference. Therefore, the court did not abuse its discretion in denying the motion for new trial.5
*4 We overrule points of error three through five.
B. Did the Harris County court err in not dismissing Pines’s suit to quiet title?
In point of error six, PMC complains the trial court erred by denying the motion for new trial because dominant jurisdiction over Pines’s suit to quiet title was in Dallas County. We disagree.
Actions to quiet title to real property must be brought in the county in which all or a part of the property is located. Tex. Civ. Prac. & Rem.Code Ann. § 15.011 (Vernon 1995). Pines introduced evidence its property was located in Harris County and the liens were filed in Harris County. The court did not err by refusing to dismiss Pines’s claims or by denying the motion for new trial.
We overrule point of error six.
We affirm the judgment.
Footnotes |
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1 |
When the Secretary of State is served as agent for a corporation, the service so had on the corporation shall be returnable in not less than thirty (30) days. Tex. Bus. Corp. Act art. 2.11(B) (Vernon 1980 and Supp.1998). |
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2 |
Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d 124 (1939). |
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3 |
Paul Kester is president and chief executive officer of Paul Michael Construction, Inc., in addition to being its registered agent for service of process. |
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4 |
“Any service so had on the Secretary of State shall be returnable in not less than thirty (30) days.” Tex. Bus. Corp. Act art. 2.11(B). |
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5 |
Due to the dispositive nature of a finding of intentional or conscious indifference, we need not address the other Craddock factors. |
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