Harper Macleod Slctr v. Keaty & Keaty ( 2001 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 00-30906
HARPER MACLEOD SOLICITORS,
Plaintiff-Appellant,
v.
KEATY & KEATY, doing business as Keaty Law Firm,
Defendant-Appellee.
--------------------
Appeal from the United States District Court
for the Eastern District of Louisiana
--------------------
July 26, 2001
Before KING, Chief Judge, ALDISERT* and BENAVIDES, Circuit
Judges.
BENAVIDES, Circuit Judge:
Appellees Thomas Keaty, Robert Keaty and Keaty & Keaty,
d/b/a the Keaty Law Firm, (the Defendants) suffered a default
judgment in the Southern District of Texas in favor of Appellant
Harper Macleod Solicitors (Harper), a Scottish law firm. When
Harper sought to register the default judgment in the Eastern
District of Louisiana pursuant to 28 U.S.C. § 1963, the
Defendants challenged its validity alleging deficient service of
process. The Louisiana district court sustained that challenge
and, using Rule 60(b)(4), voided the default judgment. Harper
*
Circuit Judge of the Third Circuit, sitting by
designation.
now appeals, arguing that (1) the Texas district court’s
jurisdictional findings should be afforded preclusive effect in
accordance with Texas law, and (2) service on the Defendants
sufficiently complied with the Texas long arm statute to support
the default judgment issued by the Texas district court. After
concluding that district courts have authority to entertain
motions challenging the validity of another district court’s
judgment using Rule 60(b)(4), we confirm the propriety of the
district court’s reliance on federal rules of issue preclusion to
determine that the Texas district court’s jurisdictional findings
did not preclude the Defendants from arguing their jurisdictional
claims. Further, we agree with the Louisiana district court’s
conclusion that service on the Defendants was defective under
Texas law. Accordingly, we AFFIRM the judgment of the Louisiana
district court voiding the default judgment of the Texas district
court.
FACTUAL AND PROCEDURAL BACKGROUND
On August 18, 1998, Harper filed suit against the Defendants
in the Southern District of Texas, Galveston Division (the Texas
Court). Harper alleged fraud and breach of contract in relation
to its referral of two personal injury plaintiffs to the
Defendants. Federal jurisdiction was founded on diversity of
citizenship.
Harper attempted service on the Defendants in accordance
2
with the Texas long-arm statute by forwarding three copies of the
complaint, as well as three summonses, to the Texas Secretary of
State (the Secretary). Harper provided the Secretary with the
following “home or home office” addresses for the Defendants:
1. To Defendant Keaty & Keaty d/b/a The
Keaty Firm’s home or home office:
345 Doucet Road, Suite 104
Lafayette, LA 70503
2. To Defendant Robert M. Keaty’s home or
home office:
c/o Keaty & Keaty
1140 World Trade Center
Two Canal Street
New Orleans, LA 70130
3. To Defendant Thomas S. Keaty Jr.’s home
or home office:
c/o Keaty & Keaty
1140 World Trade Center
Two Canal Street
New Orleans, LA 70130
On September 1, 1998, Harper received from the Secretary
certifications attesting that two copies of the summons and
complaint had been delivered by certified mail to each defendant
at the address provided for that defendant. The Secretary
further certified that return receipts had been received “bearing
Signature of Addressee’s Agent.”
The Defendants did not appear in the Texas Court. On
January 14, 1999, the Texas Court entered an Amended Default
Judgment in favor of Harper. The order judged the Defendants
jointly and severally liable to Harper for $1,108,734.30 in
3
liquidated damages, inclusive of pre-judgment interest and
attorneys’ fees. The order also recited that the Texas Court had
jurisdiction over the Defendants and that the Defendants had been
“properly served with the Summons and Complaint.”
On March 2, 1999, Harper registered the default judgment in
the Eastern District of Louisiana (the Louisiana Court) pursuant
to 28 U.S.C. § 1963,1 then commenced collection activities,
specifically seeking the issuance of writs of execution and
various garnishments. Defendants responded to the collection
activities by challenging the validity of the Texas Court
judgment.2
On June 4, 1999, Harper filed an unopposed Rule 60(a) motion
in the Texas Court seeking to amend the default judgment to
include express findings in support of that court’s exercise of
personal jurisdiction over the Defendants. The Texas Court
1
Section 1963 provides:
A judgment in an action for the recovery of money
or property entered in any . . . district court . . .
may be registered by filing a certified copy of the
judgment in any other district . . . when the judgment
has become final by appeal or expiration of the time
for appeal . . . . A judgment so registered shall have
the same effect as a judgment of the district court of
the district where registered and may be enforced in
like manner. . . .
28 U.S.C. § 1963 (Supp. 2000).
2
The Defendants styled their challenge as an “Answer and
Counterclaim Under Rule 13 Asserting an Independent Action to
Vacate ‘Void’ Default Judgment For Lack of Personal
Jurisdiction.”
4
subsequently signed an Order specifying that (1) Harper “properly
provided the Texas Secretary of State with the addresses of each
of the Defendants’ ‘home or home office’ address” in accordance
with the Texas long arm statute; (2) the record reflected that
the Secretary actually forwarded process to each of the
Defendants; (3) the record reflected that each Defendant had
actually received process; and (4) the Texas Court had properly
exercised personal jurisdiction over the Defendants.
Harper then moved for summary judgment in the Louisiana
Court as to the validity of the Texas Court’s default judgment.
The district court granted the motion as unopposed on November
19, 1999, having granted the Defendants several extensions to
oppose. The Defendants filed a “motion for reconsideration” on
December 20, 1999 in support of which they offered evidence
suggesting that neither the Keaty Law Firm nor Keaty & Keaty
existed as a legal entity at the time Harper attempted service.
Moreover, the Defendants maintained that none of the addresses
provided to the Secretary by Harper accurately reflected the
“home or home office” address of any of the Defendants. Because
Texas law requires strict compliance with the Texas long arm
statute, the Defendants asserted that service was defective and
the Texas judgment void.
Treating Defendants’ motion as a Rule 60(b)(4) request for
relief from judgment on grounds of insufficient service, the
Louisiana Court determined that (1) the Texas Court’s
5
jurisdictional findings did not preclude the Defendants from
collaterally raising jurisdictional defects under federal res
judicata principles, and (2) service to the Defendants was
defective under Texas law. As a consequence, the Louisiana court
declared that “the default judgment entered by the United States
District Court, Southern District of Texas, Galveston Division is
void.” Harper’s subsequent motion for relief from judgment
pursuant to Rule 60(b)(1) or (b)(6) was denied and final judgment
was entered on July 13, 2000. This appeal followed.
DISCUSSION
Federal courts generally disfavor default judgments,
preferring to resolve disputes according to their merits.
Lindsey v. Prive Corp., 161 F.3d 886, 892 (5th Cir. 1998); Seven
Elves, Inc. v. Eskenazi, 635 F.2d 396, 403 (5th Cir. 1981)
(noting that Rule 60(b) should be “applied most liberally to
judgments in default.”) This circuit has held that a district
court must set aside a default judgment as void if it determines
that it lacked personal jurisdiction over the defendant because
of defective service of process. See, e.g., Bludworth Bond
Shipyard, Inc. v. M/V Caribbean Wind, 841 F.2d 646, 649 (5th Cir.
1988). In this case, we are presented with defendants that
suffered a default judgment in one federal district court, then
challenged that judgment as void for lack of jurisdiction in the
district court of registration. It is well-established that
6
defendants need not appear in a federal court without authority
to exercise personal jurisdiction over them to raise a
jurisdictional defect. Defendants are “always free to ignore . .
. judicial proceedings, risk a default judgment, then challenge
that judgment on jurisdictional grounds in a collateral
proceeding.” Ins. Corp. of Ireland, Ltd. v. Compagnie des
Bauxites de Guinee, 456 U.S. 694, 706, 102 S. Ct. 2099, 2106
(1982); Broadcast Music, Inc. v. M.T.S. Enterprises, Inc, 811
F.2d 278, 281 (5th Cir. 1987).
Harper, as the beneficiary of the default judgment, has not
challenged the ability of a registering court to grant relief
from another district court’s judgment using Rule 60(b)(4) when
the rendering court did not properly exercise jurisdiction.
Instead, Harper alternatively argues that (1) a registering court
should apply the relevant state law on issue preclusion to
determine the effect of jurisdictional findings made by a
rendering district court sitting in diversity, or (2) service on
the Defendants was proper because it sufficiently complied with
the Texas long arm statute.
Though we generally review a district court’s Rule 60(b)
ruling solely for abuse of discretion, Bludworth Bond, 841 F.2d
at 649, “Rule 60(b)(4) motions leave no margin for consideration
of the district court's discretion as the judgments themselves
are by definition either legal nullities or not.” Carter v.
7
Fenner, 136 F.3d 1000, 1005 (5th Cir. 1998). As a consequence,
our review of the issues raised in this appeal is effectively de
novo. See Export Group v. Reef Industries, Inc., 54 F.3d 1466,
1469 (9th Cir. 1995) ("We review de novo . . . . a district
court's ruling upon a Rule 60(b)(4) motion to set aside a
judgment as void, because the question of the validity of a
judgment is a legal one.").
I. A Registering Court May Rely on Rule 60(b)(4) to Entertain
Jurisdictional Challenges to the Validity of a Default Judgment
Issued By Another District Court
Although both the Louisiana Court and the parties assume
that Rule 60(b)(4) empowers a registering court to void a
judgment rendered by another district court, the scope of a
registering court’s power to alter or amend judgments rendered by
another court through Rule 60(b) is uncertain. See WRIGHT, MILLER
& KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2d § 2787 (1995).3
Typically, relief under Rule 60(b) is sought in the court that
3
This Court has never expressly recognized the authority
of a registering court to void a judgment rendered in another
district court. The Fifth Circuit cases relied upon by the
district court to support its review of the Texas Court’s
jurisdiction, as well as those cited by the parties, involved
either a rendering court considering a Rule 60(b)(4) motion to
void its own judgment, see Bludworth, 841 F.2d at 648-49;
Broadcast Music, 811 F.2d at 281; Recreational Properties v.
Southwest Mortg. Serv., 804 F.2d 311, 314 (5th Cir. 1986), or a
district court’s refusal to afford full faith and credit to a
state court default judgment because the state court had no
jurisdiction over the defendant. See A.L.T. Corp. v. Small
Business Administration, 801 F.2d 1451 (5th Cir. 1986).
8
rendered the judgment at issue. See id. at § 2865. At least one
circuit, the Seventh, has suggested that Rule 60(b) motions must
be presented to the court that rendered the judgment in question.
See Board of Trustees, Sheet Metal Workers’ Nat’l Pension Fund v.
Elite Erectors, Inc., 212 F.3d 1031, 1034 (7th Cir. 2000).4
Interpreting 28 U.S.C. § 1963, the court in Elite Erectors
reasoned that a registering court has no authority over the
judgment being registered. Id. Consequently, a registering
district court could not, according to the Seventh Circuit, tell
the rendering court not to enforce the judgment. Id. The court
also expressed concern that various registering courts might
resolve Rule 60(b) motions to modify or annul the same judgment
differently. Id. The majority of circuits, however, has held or
suggested that registering courts may rely on Rule 60(b)(4) to
void a default judgment if the rendering court was without
jurisdiction over the defendant. See F.D.I.C. v. Aaronian, 93
F.3d 636, 639 (9th Cir. 1996); Rector v. Peterson, 759 F.2d 809,
4
Prior to Elite Erectors, the Seventh Circuit had suggested
that a registering court could use Rule 60(b)(4) to void the
judgment of another court. See In re Joint Eastern & Southern
Dist. Asbestos, 22 F.3d 755, 762 n. 15 (7th Cir. 1994) (“[T]he
authority of the registration court to entertain a motion under
Rule 60(b)(4) appears to be well-established.”); Fuhrman v.
Livaditis, 611 F.2d 203, 205 (7th Cir. 1979) (refusing to
“conclude that a registering court presented with a motion for
relief from judgment based on lack of personal jurisdiction must
in every instance defer to the court which originally issued the
judgment. . . .” ).
9
811 (10th Cir. 1985); Indian Head Nat. Bank of Nashua v.
Brunelle, 689 F.2d 245, 249 (1st Cir. 1982); Covington Indus.,
Inc. v. Resintex A.G., 629 F.2d 730, 733 (2d Cir. 1980). Even
the Seventh Circuit in Elite Erectors, though not granting
registering courts authority over judgments through Rule 60(b),
held that a registering court “was free to disregard the judgment
. . . if the rendering court lacked jurisdiction.” Elite
Erectors, Inc., 212 F.3d at 1034.
We join the majority of circuits and hold that registering
courts may use Rule 60(b)(4) to sustain jurisdictional challenges
to default judgments issued by another district court.
Though judicial efficiency and comity among district courts often
counsel a registering court to defer ruling on Rule 60(b) motions
in favor of the rendering court, see Fuhrman, 611 F.2d at 205,
such deference is less appropriate when the challenged judgment
was issued without the benefit of argument from one party and the
basis for the 60(b) challenge is jurisdictional. See Covington
Indus., 629 F.2d at 733. Requiring deference to a rendering
court for determination of jurisdictional issues related to a
default judgment is also difficult to reconcile with the
established rule that a party may suffer a default judgment then
collaterally attack that judgment upon enforcement. See id. at
733-34 (citations omitted). Finally, as noted in Elite Erectors,
“[w]hether or not the district court enters an order under the
10
Rule 60(b)(4), principles of issue preclusion would prevent re-
litigation of the jurisdictional question in other courts of
registration.” Elite Erectors, Inc., 212 F.3d at 1034.
Principles of issue preclusion apply with equal force in courts
of rendition and registration: neither should re-adjudicate
issues first heard and ruled on by another federal court.
Therefore, even under the rule of Elite Erectors, a court of
registration effectively can tell a rendering court not to
enforce a default judgment when the defaulting defendant never
appeared in the court of rendition and had a valid jurisdictional
complaint. That one district court may exercise such authority
over another is a necessary consequence of the established rule
that a defendant may challenge a rendering court’s personal
jurisdiction in a court in which enforcement of a default
judgment is attempted. Such authority also reflects the federal
system’s disdain for default judgments.
II. The Louisiana Court Properly Applied Federal Rules of Issue
Preclusion to Determine the Preclusive Effect of the Texas
Court’s Jurisdictional Findings.
Having concluded that the Louisiana Court had authority to
undertake an independent inquiry into the jurisdictional basis of
the Texas Court’s judgment using Rule 60(b)(4), we next consider
the first of Harper’s two primary arguments on appeal: whether
the Louisiana Court properly applied federal law when determining
the preclusive effect of the jurisdictional recitations and
11
related factual findings contained in the Texas Court’s original
and amended judgments. Traditional rules of preclusion as
adopted in federal case law - whether under the doctrine of
collateral estoppel or res judicata - require that the party to
be estopped from re-litigating a claim have had a full and fair
opportunity to litigate the issue. See Parklane Hosiery Co. v.
Shore, 439 U.S. 322, 326, 99 S. Ct. 645, 649 (1979). The
Louisiana Court determined that “[b]ecause defendants did not
have their day in court,” they were not precluded from litigating
the service of process issues collaterally.
In diversity actions like the one that produced the
underlying default judgment in this case, the law of the forum
state, subject to the constitutional limits imposed by the Due
Process Clause, controls the ability of a district court to
exercise personal jurisdiction over nonresident defendants. See
Southmark Corp. v. Life Investors, Inc., 851 F.2d 763, 772 n. 15
(5th Cir. 1988); Stuart v. Spademan, 772 F.2d 1185, 1189 (5th
Cir.1985). Thus, Texas law provides the foundation for the
Defendants’ argument that service of process in the Texas
proceeding was defective such that the Texas Court did not
properly exercise jurisdiction over them when it rendered default
judgment. On appeal, Harper argues that Texas law should also be
applied to determine the preclusive effect of the jurisdictional
findings contained in the Texas Court’s original and amended
12
default judgments. Because Texas maintains the common law rule
of absolute verity, under which plain jurisdictional recitals
contained within a judgment are conclusive as to the rendering
court’s jurisdiction in a collateral proceeding,5 Harper asserts
that the Defendants should be barred from raising technical
service of process issues collaterally in the Louisiana Court.
As support for its argument, Harper relies principally on
the Supreme Court’s full faith and credit jurisprudence which
provides that “a federal court must give to a state-court
judgment the same preclusive effect as would be given that
judgment under the law of the State in which the judgment was
rendered.” Migra v. Warren City Sch. Dist. Bd. of Educ., 465
U.S. 75, 81 (1984); Allen v. McCurry, 449 U.S. 90, 96, 101 S. Ct.
411, 415, 66 L. Ed. 2d 308 (1980) (“[T]hough the federal courts may
look to the common law or to the policies supporting res judicata
and collateral estoppel in assessing the preclusive effect of
decisions of other federal courts, Congress has specifically
required all federal courts to give preclusive effect to
state-court judgments whenever the courts of the State from which
the judgments emerged would do so . . . ."). Applying this rule,
5
See Akers v. Simpson, 445 S.W.2d 957, 959 (Tex. 1969)
(“It is the firmly established rule in Texas that a defendant who
is not served and who does not appear may not, as a matter of
public policy, attack the verity of a judgment in a collateral
proceeding; the jurisdictional recitals import absolute
verity.”).
13
this circuit has held that when a federal court is asked to
enforce a state judgment, the rendering state’s law determines
the preclusive effect of jurisdictional findings contained within
the judgment, subject of course to the Due Process Clause. See
A.L.T. Corp., 801 F.2d at 1455, 1458-59.6 Harper seeks to extend
this rationale, reasoning that the Louisiana Court should have
followed Texas’ process for bringing a jurisdictional challenge
to a default judgment.7 Harper concedes, however, that because
this case involves enforcement of a federal district court
judgment by another federal district court, neither the Full
Faith and Credit Clause nor the full faith and credit statute,8
6
We note that the Defendants do not argue that they had no
notice of the claim pending against them such that enforcement of
the Texas Court’s judgment would violate the Due Process Clause.
Instead, the Defendants argue that service upon them violated
technical requirements of Texas law, and, under that law alone,
was insufficient.
7
Harper’s argument also finds some jurisprudential support
in a recent Supreme Court decision holding that, while federal
law determines the preclusive effect of all federal judgments on
the merits of a case, the federal rule of decision in diversity
cases generally should refer to the law of the state in which the
rendering court sits. See Semtek Int’l Inc. v. Lockheed Martin
Corp., -- U.S.--, 121 S. Ct. 1021, 1028 (2001); see also Gasperini
v. Center for Humanities, Inc., 518 U.S. 415, 429-31 (1996).
Thus, Texas law determines the preclusive effect of the
substantive issues addressed in the Texas Court’s default
judgment. Semtek did not address the role of state law in
determining the preclusive effect of jurisdictional findings made
by a federal court sitting in diversity. Moreover, Harper has
not argued that Texas law on issue preclusion should apply to
jurisdictional recitals under the Supreme Court’s Erie
jurisprudence. Thus, we need not address Harper’s argument in
terms of Erie.
8
This statute provides:
14
or the cases interpreting them, control. See Baldwin v. Iowa
State Traveling Mens Ass’n, 283 U.S. 522, 524, 51 S. Ct. 517, 518
(1931).
We decline to extend full faith and credit principles to
cases like this one involving the enforcement of a federal
judgment by another federal court. We begin our analysis by
reiterating the power of a court of registration to inquire into
the jurisdiction of the rendering court before enforcing the
rendering court’s judgment. See Covington Indus., 629 F.2d at
732 (“When, in an enforcement proceeding, the validity of the
judgment is questioned on this ground [of lack of personal
jurisdiction], the enforcing court has the inherent power to void
the judgment[.]” (citing Baldwin, 283 U.S. at 525)).9 Moreover,
[t]he . . . judicial proceedings of any court of any
such State . . . shall have the same full faith and
credit in every court within the United States and its
Territories and Possessions as they have by law or
usage in the courts of such State . . . .
28 U.S.C. § 1738 (1982).
9
This principle has a long lineage in our jurisprudence.
See Chicago Life Ins. Co. v. Cherry, 244 U.S. 25, 29 (1917)
(“There is no doubt of the general proposition that in a suit
upon a judgment the jurisdiction of the court rendering it over
the person of the defendant may be inquired into.”); Hall v.
Lanning, 91 U.S. 160, 165 (1875) (“[T]he jurisdiction of a
foreign court over the person or the subject-matter embraced in
the judgment or decree of such court is always open to
inquiry[.]”). The requirement that a court have jurisdiction
over the person before rendering judgment is rooted in due
process and is a basic requirement that must be satisfied before
a valid judgment can be had or, as germane to this case, be
enforced. See, e.g., Ins. Corp. of Ireland, Ltd., 456 U.S. at
702 (“The requirement that a court have personal jurisdiction
15
federal case law has long allowed parties to federal lawsuits to
rely on this power by granting defendants the ability “to ignore
the judicial proceedings, risk a default judgment, and then
challenge that judgment on jurisdictional grounds in a collateral
proceeding.” Ins. Corp. of Ireland, Ltd., 456 U.S. at 706;
Broadcast Music, Inc., 811 F.2d at 281. Application of Texas’
rule of absolute verity would undermine this foundational
principle of federal jurisdictional law by preventing defendants
from testing a district court’s jurisdiction by suffering a
default judgment, then raising jurisdictional issues when the
default judgment is enforced. For that reason, we decline to
sustain Harper’s request that we use Texas law to determine the
preclusive effect of jurisdictional findings contained in a
federal judgment.10
Since application of state law in this case is
flows not from Art. III, but from the Due Process Clause.”). If
the rendering court did not have such jurisdiction, its judgment
is invalid. See N.Y. Life Ins. Co. v. Brown, 84 F.3d 137, 143
(5th Cir. 1996) (“A judgment is void . . . if the court that
rendered it lacked jurisdiction . . . of the parties[.]”
(internal quotations omitted) (quoting Williams v. New Orleans
Pub. Serv., Inc., 728 F.2d 730, 735 (5th Cir. 1984))); Broadcast
Music, Inc., 811 F.2d at 281 (“A court which lacks personal
jurisdiction over a defendant cannot enter a valid judgment
against that defendant.”).
10
We recognize that our refusal to apply state law to
resolve this question turns on the substance of Texas law. We
need not determine in this case whether a different state law
could be used as the federal rule for determining the preclusive
effect of jurisdictional findings made by a federal district
court sitting in diversity.
16
inappropriate, the Louisiana Court properly applied federal rules
of issue preclusion to determine whether the Texas Court’s
jurisdictional findings precluded litigation of the Defendants’
jurisdictional arguments. The Louisiana Court noted “[n]owhere
in the ruling is there any mention of any challenges or exhibits
made by defendant. It appears that defendant was not present
for, nor in any way, participated in the proceeding.” Based upon
this finding, we agree with the Louisiana Court’s decision to
afford the Texas court’s jurisdictional recitals no preclusive
effect.
III. The Louisiana Court Properly Ruled That Service Upon the
Defendants Was Defective Pursuant to Texas Law
Having determined that the district court properly undertook
an independent review of the Texas Court’s jurisdiction to enter
a default judgment against the Defendants, we next turn to the
merits of the jurisdictional issues raised. The parties agree
that Texas law, specifically the Texas long arm statute and the
cases interpreting it, determine whether service of process was
effective on the Defendants. See FED. R. CIV. PROC. 4 (e)(1) (West
1999). To support a default judgment against a jurisdictional
challenge, Texas law requires plaintiffs to prove that (1) the
pleadings established that the Defendants were amenable to
service, and (2) evidence in the record demonstrates the
Defendants were in fact served in the manner required by the
17
Texas long arm statute. Bludworth, 841 F.2d at 649; Whitney v. L
& L Realty Corp., 500 S.W.2d 94, 95-96 (Tex. 1973).11 The
Defendants do not dispute that the record reveals that they were
amenable to service, thus the inquiry before the district court,
and before this Court, implicates only the second prong of
Whitney.
Section 17.044(b) of the Texas Civil Practice & Remedies
Code provides for substituted service on the Secretary for
nonresident defendants doing business in Texas that do not
maintain a regular place of business in Texas, provided that the
relevant proceeding arises out of business done in Texas. See
TEX. CIV. PRAC. & REM. CODE ANN. § 17.044(b) (West 1999).
Specifically, plaintiffs must comply with notice requirements of
section 17.045(a):
If the Secretary of State is served with duplicate
copies of process for a nonresident, he shall require a
statement of the name and address of the nonresident’s
home or home office and shall immediately mail a copy
of the process to the nonresident.
Id. at § 17.045(a). In analyzing whether Harper complied with
the Texas long arm statute, we must screen the record “to
11
This Court has previously noted possible tension between
Texas and federal law on the burden of proof: Texas law assigns
the burden of proving service issues to the plaintiff, while the
movant under Rule 60(b) generally bears the burden of proof.
Bludworth Bond, 841 F.2d at 649 n. 7. As in Bludworth, however,
the addresses provided to the Secretary by Harper are uncontested
and consequently we are able to determine the adequacy of service
as a matter of law. See id.
18
factually determine that the address provided to the Secretary of
State was in fact the home or home office of the nonresident
defendant (notwithstanding it was so labeled).” Mahon v.
Caldwell, Haddad, Skaggs, Inc., 783 S.W.2d 769, 771 (Tex. App.
1990, writ denied).
Texas courts have consistently required strict compliance
with the terms of the Texas long arm statute. See Mahon, 783
S.W.2d at 771. According to the Texas Supreme Court, “[a]
typographical error in the forwarding address . . . is grounds to
set aside a default judgment based on substituted service.”
Royal Surplus Lines Ins. Co. v. Samaria Baptist Church, 840
S.W.2d 382, 383 (Tex. 1992); see also Commission of Contracts of
General Executive Committee of Petroleum Workers Union of
Republic of Mexico v. Arriba, Ltd., 882 S.W.2d 576, 585 (Tex.
App. 1994, no writ) (“If the Secretary of State sends the
citation and a copy of the petition to the nonresident defendant
using an incorrect address for the defendant, then a default
judgment should be set aside.”) Moreover, “[a]ctual notice to a
defendant, without proper service, is not sufficient to convey
upon the court jurisdiction to render default judgment against
[the defendant]. Rather, jurisdiction is dependent upon citation
issued and service in a manner provided for by law.” Wilson v.
Dunn, 800 S.W.2d 833, 836 (Tex. 1990).
The Louisiana Court held that service was defective with
19
respect to each of the Defendants because, inter alia, none of
the addresses provided to the Secretary accurately stated a home
or home office address for any one of the defendants. Harper has
not provided any basis for reversing this determination.
Instead, Harper concedes that it provided the Secretary with (1)
“a former address for service upon the partnership Keaty & Keaty
d/b/a The Keaty Firm at its Lafayette office;” and (2) addresses
for Robert and Thomas Keaty that contained “a typographical error
in the suite number.” According to Texas law, such mistakes
render service defective. Royal Surplus Lines, 840 S.W.2d at
383; Arriba, 882 S.W.2d at 585. That the Defendants may have had
actual notice of service is of no consequence since the Texas
Supreme Court has expressly rejected an actual notice exception
to strict compliance with the terms of the long arm statute.
Wilson, 800 S.W.2d at 836. The district court therefore properly
determined that service was inadequate under Texas law and could
not support a default judgment.
CONCLUSION
A party may contest personal jurisdiction or method of
service by refusing to appear, suffering a default judgment, then
collaterally attacking that default judgment when the plaintiff
initiates enforcement proceedings. Thus, the Louisiana Court
properly considered whether the Texas Court had jurisdiction over
the Defendants. In undertaking its jurisdictional analysis, the
20
Louisiana Court appropriately applied federal rules of issue
preclusion to determine that the Texas Court’s jurisdictional
recitals were not entitled to deference because they were not
produced after full and thorough litigation. Finally, the
Louisiana Court correctly concluded that Harper failed to provide
the Secretary with an accurate “home or home office” address for
any of the Defendants. Hence, we AFFIRM the Louisiana Court’s
judgment voiding the Texas Court’s default judgment under Rule
60(b)(4).
AFFIRMED.
21
KING, Chief Judge, specially concurring:
I concur in the judgment and in all of Judge Benavides’s
fine opinion with the exception of Part I, which addresses
whether a registering court has the power to alter or amend a
rendering court’s judgment through Rule 60(b). I write only to
state that I agree with Judge Easterbrook’s treatment of this
issue in Board of Trustees, Sheet Metal Workers’ National Pension
Fund v. Elite Erectors, Inc., 212 F.3d 1031 (7th Cir. 2000). As
in Elite Erectors, the central issue in this case is whether the
rendering court had jurisdiction over the Defendants to enter the
default judgment against them. I concur in the judgment in this
case, however, because under either Judge Easterbrook’s analysis
or Judge Benavides’s analysis, the result is the same because the
registering court is “free to disregard the [rendering court’s]
judgment, without formally annulling it under Rule 60(b)(4), if
the rendering court lacked jurisdiction.” Id. at 1034.
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