Justin Trent Shackelford v. Cartercopters, LLC D/B/A Carter Aviation Technologies, LLC ( 2011 )


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  •                         COURT OF APPEALS
    SECOND DISTRICT OF TEXAS
    FORT WORTH
    NO. 02-10-00414-CV
    JUSTIN TRENT SHACKELFORD                                          APPELLANT
    V.
    CARTERCOPTERS, LLC D/B/A                                           APPELLEE
    CARTER AVIATION
    TECHNOLOGIES, LLC
    ----------
    FROM COUNTY COURT AT LAW NO. 2 OF WICHITA COUNTY
    ----------
    MEMORANDUM OPINION1
    ----------
    I.     Introduction
    In two issues, Appellant Justin Trent Shackelford appeals the trial
    court’s summary judgment in favor of Appellee Cartercopters, LLC d/b/a Carter
    Aviation Technologies, LLC (Carter). We reverse and remand.
    1
    See Tex. R. App. P. 47.4.
    II. Factual and Procedural History
    As this appeal’s genesis is an equitable bill of review revolving around the
    question of service of process, a detailed factual recitation of the underlying
    employment-based lawsuit is unnecessary.         Suffice it to say that employee
    Shackelford and employer Carter parted ways with Carter claiming that
    Shackelford owed it $19,000 in unearned, but paid, wages. After parting ways,
    Shackelford relocated to Massachusetts without providing forwarding information
    to Carter.   In December 2008, Shackelford’s Massachusetts-based attorney,
    Barbara Liftman, sent a letter to Carter’s chief executive officer that challenged
    Carter’s position on their dispute and stated that Shackelford was willing to
    pursue appropriate litigation in Texas through local counsel.         Liftman also
    expressly stated the she was not licensed in Texas and that she would not be
    representing Shackelford in any action that Carter brought against him in Texas.
    On January 16, 2009, Carter filed suit against Shackelford, listing
    Shackelford’s address as 333 Howard Street, Northborough, Massachusetts—
    the address on a lease signed by Shackelford. Because Shackelford lived out of
    state, Carter forwarded the petition to the Texas Secretary of State’s Office for
    service. The citation and original petition forwarded by the secretary of state to
    Shackelford at the 333 Howard Street address was returned by the United States
    Postal Service (USPS) as ―Refused‖ on February 6, 2009.                 Thereafter,
    Shackelford failed to answer or otherwise timely appear, and on May 1, 2009, the
    trial court entered a default judgment in Carter’s favor. Several days later, Carter
    forwarded a copy of the judgment to Liftman. Liftman told Carter that she had
    2
    attempted to contact Shackelford but that he had moved and had not left a
    forwarding address. According to Shackelford, on September 20, 2009, a friend
    informed him that an internet search revealed his name in connection with a
    lawsuit, prompting Shackelford to conduct his own internet search and to
    discover the default judgment that had been entered against him. The following
    day, he contacted Liftman, who informed him that she had received a copy of the
    judgment but had not been able to contact him. She advised him to obtain Texas
    counsel.
    Shackelford began looking for attorneys in Wichita Falls to represent him in
    this matter.   On October 15, 2009, he first communicated with his present
    counsel.   Shackelford’s Texas counsel filed a petition for bill of review on
    December 30, 2009, asserting that because Shackelford had not been properly
    served, the default judgment should be set aside. Shackelford supported his bill
    with his own affidavit. He asserted that there were two dwelling units located at
    333 Howard Street, a main house and a guest house, and his mail carrier had
    instructed him to use 333B Howard Street as his address at the main house to
    distinguish it from the guest house, which continued to be denominated 333
    Howard Street. He supported this with his bank statements from November 2008
    to January 2009, which were addressed to 333B Howard Street.           He further
    claimed that he had not refused or instructed his household members to refuse
    certified mail and that he had never been served with the suit papers.
    Shackelford subsequently vacated the premises and moved to Rye, New
    Hampshire in February 2009.
    3
    In July 2010, after discovery, Carter moved for summary judgment
    because, according to Carter, ―Shackelford simply cannot show, inter alia, (1)
    lack of proper service, or (2) his own diligence in setting the default judgment
    aside.‖ The trial court, without specifying the grounds, granted Carter’s summary
    judgment. This appeal followed.
    III. Summary Judgment
    In two issues, Shackelford claims that the trial court erred by granting
    summary judgment because he raised a material fact issue on (1) whether he
    was effectively served with process prior to the default judgment and (2) whether
    he was diligent in pursuing post-default remedies.
    A. Standard of Review
    The review of a grant of summary judgment on a petition for bill of review
    is the same standard of review as for grants of summary judgment in other types
    of cases. See Wolfe v. Grant Prideco, Inc., 
    53 S.W.3d 771
    , 773 (Tex. App.—
    Houston [1st Dist.] 2001, pet. denied). That is, we review a summary judgment
    de novo. Travelers Ins. Co. v. Joachim, 
    315 S.W.3d 860
    , 862 (Tex. 2010). We
    consider the evidence presented in the light most favorable to the nonmovant,
    crediting evidence favorable to the nonmovant if reasonable jurors could, and
    disregarding evidence contrary to the nonmovant unless reasonable jurors could
    not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 
    289 S.W.3d 844
    , 848
    (Tex. 2009). We indulge every reasonable inference and resolve any doubts in
    the nonmovant’s favor. 20801, Inc. v. Parker, 
    249 S.W.3d 392
    , 399 (Tex. 2008).
    A defendant who conclusively negates at least one essential element of a cause
    4
    of action is entitled to summary judgment on that claim. Frost Nat’l Bank v.
    Fernandez, 
    315 S.W.3d 494
    , 508 (Tex. 2010), cert. denied, 
    131 S. Ct. 1017
    (2011); see Tex. R. Civ. P. 166a(b), (c).
    B. Bill of Review
    A party seeking relief under a bill of review must show the following: (1) a
    meritorious defense to the underlying cause of action; (2) which he was
    prevented from making by the fraud, accident, or wrongful act of the opposing
    party or official mistake; and (3) unmixed with any fault or negligence on his own
    part. Baker v. Goldsmith, 
    582 S.W.2d 404
    , 406–07 (Tex. 1979). Non-service of
    process, however, lessens the required showing:
    Bill of review plaintiffs claiming non-service, however, are
    relieved of two elements ordinarily required to be proved in a bill of
    review proceeding. First, if a plaintiff was not served, constitutional
    due process relieves the plaintiff from the need to show a
    meritorious defense. Second, the plaintiff is relieved from showing
    that fraud, accident, wrongful act or official mistake prevented the
    plaintiff from presenting such a defense.
    Bill of review plaintiffs alleging they were not served, however,
    must still prove the third and final element required in a bill of review
    proceeding that the judgment was rendered unmixed with any fault
    or negligence of their own. In Caldwell, we said this third and final
    element is conclusively established if the plaintiff can prove that he
    or she was never served with process. An individual who is not
    served with process cannot be at fault or negligent in allowing a
    default judgment to be rendered. Proof of non-service, then, will
    conclusively establish the third and only element that bill of review
    plaintiffs are required to prove when they are asserting lack of
    service of process as their only defense.
    ....
    In sum, when a plaintiff seeks a bill of review based solely on a claim
    of non-service, the bill of review procedure outlined in Goldsmith
    must be slightly modified. When a plaintiff claims lack of service, the
    5
    trial court should: (1) dispense with any pretrial inquiry into a
    meritorious defense, (2) hold a trial, at which the bill of review
    plaintiff assumes the burden of proving that the plaintiff was not
    served with process, thereby conclusively establishing a lack of fault
    or negligence in allowing a default judgment to be rendered, and (3)
    conditioned upon an affirmative finding that the plaintiff was not
    served, allow the parties to revert to their original status as plaintiff
    and defendant with the burden on the original plaintiff to prove his or
    her case.
    Caldwell v. Barnes, 
    154 S.W.3d 93
    , 96–97 (Tex. 2004) (citations omitted).
    A bill of review must be brought within four years of the date of the
    challenged judgment absent a showing of extrinsic fraud.           See Caldwell v.
    Barnes, 
    975 S.W.2d 535
    , 538 (Tex. 1998) (holding residual four-year statute of
    limitations in civil practice and remedies code section 16.051 applies to bill of
    review); PNS Stores, Inc. v. Rivera, 
    335 S.W.3d 265
    , 276 (Tex. App.—San
    Antonio 2010, pet. filed) (noting only exception to four-year limitations period for
    bill of review is when petitioner proves extrinsic fraud); Manley v. Parsons, 
    112 S.W.3d 335
    , 338 (Tex. App.—Corpus Christi 2003, pet. denied) (holding same);
    Defee v. Defee, 
    966 S.W.2d 719
    , 722 (Tex. App.—San Antonio 1998, no pet.)
    (same); see Tex. Civ. Prac. & Rem. Code Ann. § 16.051 (West 2008).
    C. The Texas Long Arm Statute
    Section 17.044 of the civil practice and remedies code designates the
    secretary of state to be the agent of a nonresident for service of process if the
    nonresident ―is not required to designate an agent for service in this state, but
    becomes a nonresident after a cause arises in this state but before the cause is
    matured by suit in a court of competent jurisdiction,‖ which is the situation here.
    Tex. Civ. Prac. & Rem. Code Ann. § 17.044 (West 2008).               The service-of-
    6
    process documents provided to the secretary of state by a plaintiff must contain
    the name and address of the non-resident’s home or home office.          See 
    Id. § 17.045(a)
    (West 2008). And, ―there must be proof that the address to which
    the Secretary sent the citation was the defendants’ home address or home
    office.‖   Barnes v. Frost Nat’l Bank, 
    840 S.W.2d 747
    , 750 (Tex. App.—San
    Antonio 1992, no writ) (Peeples, J., concurring).    Upon receipt of a petition
    against a nonresident, the secretary of state is required to immediately mail a
    copy of the process to the nonresident. See Tex. Civ. Prac. & Rem. Code Ann. §
    17.045(a). Service is normally complete upon receipt by the secretary of state.
    See Whitney v. L & L Realty Corp., 
    500 S.W.2d 94
    , 96 (Tex. 1973). But if the
    secretary of state sends the citation and copy of the petition to the nonresident
    defendant using an incorrect address for the defendant, then a default judgment
    rendered against that defendant should be set aside. See Royal Surplus Lines
    Ins. Co. v. Samaria Baptist Church, 
    840 S.W.2d 382
    , 383 (Tex. 1992).
    D. USPS Attempted Delivery Nomenclature
    USPS uses various designated terms when mail is unsuccessfully
    attempted to be delivered, such as ―Refused,‖ ―Unclaimed,‖ ―Moved Left No
    Address,‖ ―Attempted Not Known,‖ and ―Return to Sender—Insufficient Address.‖
    See Orgoo, Inc. v. Rackspace US, Inc., 
    341 S.W.3d 34
    , 42 & n.9 (Tex. App.—
    San Antonio 2011, no pet.); Walters v. Clark, No. 01-99-01424-CV, 
    2001 WL 282771
    , at *2 (Tex. App.—Houston [1st Dist.] Mar. 22, 2001, no pet.) (not
    7
    designated for publication); 
    Barnes, 840 S.W.2d at 750
    . In this case, we are
    concerned with mail returned as ―Refused.‖2 As it applies to the case before us,
    [t]he law makes no presumption favoring valid issuance, service, and
    return of citation in a default judgment case. Uvalde Country Club v.
    Martin Linen Supply Company, 
    690 S.W.2d 884
    , 885 (Tex. 1985).
    At a minimum the certificate of service must affirmatively show
    notice given. An unclaimed letter from the Secretary of State’s office
    can hardly further the aim and objective of the long-arm statute,
    which is to provide reasonable notice of the suit and an opportunity
    to be heard.
    We see a distinction between ―unclaimed‖ mail and ―refused‖
    mail. If a defendant were to know of the existence of certified mail
    and refuse to accept it, this would tend to show the defendant did in
    fact have notice. On the other hand, ―unclaimed‖ could very well
    mean that the plaintiff gave the Secretary of State the wrong
    address for the defendant, in which case the defendant would not
    receive notice, due process would not be observed, and a plaintiff
    could pervert the process by giving incorrect addresses. . . . The
    defendant cannot thwart service by refusing certified mail.
    
    Barnes, 840 S.W.2d at 750
    .
    E. Analysis
    1. Service of Process
    The facts here present a unique situation. While Carter was required to
    provide the secretary of state with a correct address, a fact question is presented
    by the evidence, not as to whether the address was correct in the normal sense,
    but as to whether it was correct in the sense of being complete. It is undisputed
    that the property containing the main house and guest house was 
    333 Howard 2
            According to the USPS Domestic Mail Manual, this designation means,
    ―Addressee refused to accept mail or pay postage charges on it.‖ United States
    Postal Service, Domestic Mail Manual, § 507(1.4.1), available at
    http://pe.usps.gov/text/dmm300/507.htm#1113039 (last visited Aug. 18, 2011);
    see also 39 C.F.R. 111.1 (2005).
    8
    Street, but some evidence was presented to create a fact issue as to whether
    Shackelford’s address was 333 or 333B Howard Street.3
    There is also a basic and fundamental fact question about notice of the suit
    and whether a purported lack of notice was due to Shackelford’s actions.4 He
    averred in his affidavit that he had never refused, nor instructed anyone to
    refuse, ―suit papers,‖ and yet the postal service returned the suit papers marked
    as ―Refused,‖ indicating that Shackelford refused to accept this mail.         And,
    although the postal stamp of ―Refused‖ is generally conclusive and would
    otherwise resolve this appeal in Carter’s favor, if the address that Carter provided
    to the secretary of state was not correct in the sense that it was incomplete, then
    failure of service occurred and Shackelford would prevail.       See 
    Barnes, 840 S.W.2d at 750
    ; see also Royal Surplus Lines Ins. 
    Co., 840 S.W.2d at 383
    .
    Therefore, because there is a fact issue as to whether Shackelford’s USPS-
    recognized mailing address was 333 or 333B Howard Street, and because it is
    necessary to determine Shackelford’s correct address before the legal effect of
    3
    We note that Shackelford asserts that he was instructed by a postal
    representative to use 333B as his mailing address and submitted bank
    statements addressed to him at that address as evidence. We also note that
    section 507(1.2.4) of the USPS Domestic Mail Manual states that ―[r]ecords of
    address changes caused by USPS adjustments are kept by the local Post Office
    for 3 years,‖ and, therefore, any postal service adjustment to Shackelford’s
    address may be on record at the post office branch serving 333 Howard Street.
    See United States Postal Service, supra note 2, § 507(1.2.4).
    4
    Although Carter argues that the lease and the fact that an August 20,
    2009 letter addressed to Shackelford and returned ―Shackelford Moved Left No
    Address‖ shows that Shackelford lived at 333 Howard Street, this fact does not
    resolve that a fact issue has been raised.
    9
    Carter’s service at the secretary of state’s office and the return of ―Refused‖ can
    be assessed, summary judgment was improper, and we sustain Shackelford’s
    first issue.
    2. Due Diligence
    In his second issue, Shackelford argues that because he filed his bill of
    review within the four-year limitations period, the trial court erred by granting
    Carter’s summary judgment motion. We agree.
    Both in its motion for summary judgment and on appeal, Carter cited a
    single case, Conrad v. Orellana, 
    661 S.W.2d 309
    (Tex. App.—Corpus Christi
    1983, no writ), to support its argument that Shackelford did not use due diligence
    in his efforts to submit a bill of review. But Conrad is factually distinguishable. In
    Conrad, the court of appeals held that a defendant that had received proper
    service of process and had filed a general denial but then failed to appear at trial,
    in person or through an attorney, could not file a bill of review challenging the
    judgment against her because (1) there was evidence that her attorney received
    notice of the hearing, the defendant did not file a motion for new trial or perfect
    an appeal, and the judgment was in accordance with the pleadings, (2) because
    ―all matters of fact in law were submitted . . . for the [trial] court’s determination,‖
    and (3) because the trial court held that the facts and law were in the plaintiff’s
    favor. 
    Id. at 311–12.
    Here, whether Shackelford received proper notice is in
    dispute, no answer was filed, and a default judgment was granted. Thus, Conrad
    is inapposite, and we conclude that Shackelford’s bill of review, submitted within
    the four-year limitations period, was timely. Accordingly, we hold that the trial
    10
    court erred to the extent that it based summary judgment in Carter’s favor on its
    argument that Shackelford did not exhibit due diligence in pursuing his bill of
    review. We sustain Shackelford’s second issue.
    IV. Conclusion
    Having sustained both of Shackelford’s issues, we reverse the trial court’s
    summary judgment and remand this cause to the trial court.
    BOB MCCOY
    JUSTICE
    PANEL: WALKER and MCCOY, JJ.; and WILLIAM BRIGHAM (Senior Justice,
    Retired, Sitting by Assignment).
    DELIVERED: August 31, 2011
    11