Encompass Counseling, Wellness & Rehab, LLC v. Consilium Staffing, LLC ( 2024 )

REVERSE and REMAND; and Opinion Filed July 2, 2024
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-23-00670-CV
ENCOMPASS COUNSELING, WELLNESS & REHAB, LLC, Appellant
V.
CONSILIUM STAFFING, LLC, Appellee
On Appeal from the 193rd Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-22-16578
MEMORANDUM OPINION
Before Justices Smith, Miskel, and Breedlove
Opinion by Justice Smith
This is a restricted appeal from a no-answer default judgment rendered against
appellant Encompass Counseling, Wellness & Rehab, LLC. In four issues,
Encompass asserts that error is apparent on the face of the record because (1) there
is no reporter’s record; (2) appellee Consilium Staffing, LLC’s petition and
supporting affidavit affirmatively disclose the invalidity of its claims; (3) the record
does not contain invoices to prove up Consilium’s attorney’s fee claim; and (4) the
process server’s return of service failed to indicate that service was made to an
authorized agent. Because we agree that service was invalid, we reverse the trial
court’s default judgment and remand for further proceedings.
Background
In December 2022, Consilium filed suit against Encompass to collect amounts
due and owing for locum tenens medical staffing services provided to Encompass.
Consilium alleged an unpaid balance of $29,032.50, and asserted a suit on a sworn
account and causes of action for breach of contract and quantum meruit. The petition
alleged that Encompass, a Georgia limited liability company doing business in
Texas, could be served through Victoria Ross, its chief executive officer. Ross was
served with the petition on December 17, 2022, and the return of service was filed
with the trial court on December 21, 2022. Encompass did not file an answer or
otherwise respond.
On Consilium’s motion, the trial court entered a default judgment on January
20, 2023. The judgment awarded Consilium the balance of the unpaid account as
actual damages in the amount of $29,032.50 and other fees and costs, including
attorney’s fees of $2,883.50 and conditional attorney’s fees in the event of an appeal.
Encompass did not timely file a notice of appeal. On July 10, 2023, it filed a
notice of restricted appeal, alleging that it had not participated in the proceedings
prior to entry of the default judgment.
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Restricted Appeal
A restricted appeal is a direct attack on a default judgment. See Ex Parte E.H.,
602 S.W.3d 486, 495 (Tex. 2020); TEX. R. APP. P. 26(c), 30. A restricted appeal is
sustained when the appellant shows that (1) it filed its notice of restricted appeal
within six months after the judgment was signed, (2) it was a party to the underlying
suit, (3) it did not participate in the hearing that resulted in the judgment complained
of and did not timely file any post-judgment motions or request findings of fact and
conclusions of law, and (4) error is apparent on the face of the record. Ex Parte
E.H., 602 S.W.3d at 495; Greystar, LLC v. Adams, 426 S.W.3d 861, 866 (Tex.
App.—Dallas 2014, no pet.). Here, the record establishes, and neither party
disputes, that the first three elements are met. Therefore, we decide only whether
error appears on the face of the record. For purposes of a restricted appeal, the face
of the record consists of all the papers on file before the judgment was entered as
well as any reporter’s record. Reed Elsevier, Inc. v. Carrollton–Farmers Branch
Indep. Sch. Dist., 180 S.W.3d 903, 905 (Tex. App.—Dallas 2005, pets. denied).
Invalid Service
In its fourth issue, Encompass asserts that error is apparent from the face of
the record because the record shows Consilium failed to follow the required
procedures for service of process. Specifically, Encompass contends that service
was invalid because the record does not show Ross’s capacity to receive service on
behalf of Encompass. We agree.
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The usual rule that all presumptions—including valid issuance, service, and
return of citation—will be made in support of a judgment does not apply to a direct
attack on a default judgment. Prado v. Nichols, No. 05-20-01092-CV, 2022 WL
574845, at *2 (Tex. App.—Dallas Feb. 25, 2022, no pet.) (mem. op.) (citing Primate
Constr. Inc. v. Silver, 884 S.W.2d 151, 152 (Tex. 1994) (per curiam)). If the record
does not affirmatively show strict compliance with the rules governing citation and
return of service, then service is invalid and error is apparent on the face of the
record. Id. Whether service strictly complies with the rules of civil procedure is a
question of law that we review de novo. U.S. Bank Tr., N.A. v. AJ & SAL Enters.,
LLC, No. 05-20-00346-CV, 2021 WL 1712213, at *2 (Tex. App.—Dallas Apr. 30,
2021, no pet.) (mem. op.).
A proper return of service must show the person or entity served. See TEX. R.
CIV. P. 107(b)(5). A limited liability company (LLC) is not a person capable of
accepting process on its own behalf and must be served through an agent. Pearson
v. Duncanville Senior Care, LLC, No. 05-21-00900-CV, 2022 WL 4480562, at *2
(Tex. App.—Dallas Sept. 27, 2022, no pet.) (mem. op.) (citing Prado, 2022 WL
574845, at *2). Agents authorized by statute to accept service on behalf of an LLC
include its registered agent and, depending on whether the LLC is manager- or
member-managed, any manager or member of the LLC. Id.; see TEX. BUS. ORGS.
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CODE ANN. §§ 5.201(b), 5.255(3).1 If an agent is served, the record must show that
the agent was authorized to receive service for the addressee. See Pearson, 2022
WL 4480562, at *2; Reed Elsevier, 180 S.W.3d at 905.
Here, the face of the record shows that Consilium filed suit against
Encompass, an LLC, and served process on Ross, Encompass’s chief executive
officer. A chief executive officer, however, is not an authorized agent for service
for an LLC, and the return of service did not otherwise indicate Ross’s capacity to
receive service on behalf of Encompass. See Reed Elsevier, 180 S.W.3d at 905(when return did not indicate capacity of person served or explain authority to
receive service as registered agent, service was invalid). Nor did anything else in
the record before the trial court when it granted Consilium’s motion for default
judgment indicate that Ross had authority to receive service on behalf of Encompass.
Because the face of the record fails to show strict compliance with the rules
governing citation and return of service, the trial court lacked jurisdiction to render
a default judgment against Encompass. See, e.g., Prado, 2022 WL 574845, at *2
(reversing default judgment where return of service reflected name of individual
served but neither return of service nor any other portion of record indicated his
capacity to receive service on behalf of purported corporation).
1
Although not at issue here, the Texas Business Organizations Code also provides for service of a
foreign entity through the Texas Secretary of State in the event the foreign entity fails to maintain a
registered agent in Texas. See TEX. BUS. ORGS. CODE ANN. §§ 5.201, 5.251.
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We sustain Encompass’s fourth issue. Our resolution of this issue makes it
unnecessary to address appellant’s remaining issues. See TEX. R. APP. P. 47.1.
Conclusion
We reverse the trial court’s default judgment and remand this cause to the trial
court for further proceedings.
/Craig Smith/
CRAIG SMITH
JUSTICE
230670F.P05
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S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
ENCOMPASS COUNSELING, On Appeal from the 193rd Judicial
WELLNESS & REHAB, LLC, District Court, Dallas County, Texas
Appellant Trial Court Cause No. DC-22-16578.
Opinion delivered by Justice Smith.
No. 05-23-00670-CV V. Justices Miskel and Breedlove
participating.
CONSILIUM STAFFING, LLC,
Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial
court is REVERSED and this cause is REMANDED to the trial court for further
proceedings consistent with this opinion.
It is ORDERED that each party bear its own costs of this appeal.
Judgment entered this 2nd day of July 2024.
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