Lloyd Ward, Lloyd Ward, PC. v. Hawkins, Kelly

AFFIRM; and Opinion Filed December 16, 2013.
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-12-00712-CV
LLOYD WARD, LLOYD WARD, P.C., LLOYD WARD & ASSOCIATES,
AND LLOYD WARD GROUP, P.C., Appellants
V.
KELLY HAWKINS, Appellee
On Appeal from the 298th Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-12-02323-M
OPINION
Before Justices Fillmore, Myers, and Lewis
Opinion by Justice Fillmore
Appellants Lloyd Ward, Lloyd Ward, P.C., Lloyd Ward & Associates, and Lloyd Ward
Group, P.C. appeal the denial of their motion to vacate a Kansas default judgment in favor of
appellee Kelly Hawkins. In three issues, appellants contend the trial court (1) abused its
discretion by not granting their motion to vacate the default judgment because the Kansas court
lacked personal jurisdiction over appellants, (2) erred if it did not consider appellants’ evidence
that Kansas did not have jurisdiction over each appellant, and (3) erred if it did not apply Texas
law to jurisdictional facts with regard to enforceability of the Kansas default judgment. We
affirm the trial court’s denial of appellants’ motion to vacate the Kansas default judgment.
Procedural Background
Appellee obtained a default judgment against appellants in a district court of Marion
County, Kansas. Appellee filed the lawsuit underlying this appeal in a district court of Dallas
County, Texas, to enforce the Kansas judgment. Appellants filed a motion to vacate or stay
enforcement of the Kansas judgment based on their contention that Kansas lacked personal
jurisdiction over them. Appellants’ motion was overruled by operation of law. Appellants
appealed the denial of their motion to vacate the Kansas judgment.
Application of Law to Jurisdictional Facts
In their third issue, appellants state the trial court erred if it did not apply Texas law to the
jurisdictional facts “during its consideration” of enforceability of the Kansas default judgment.
Appellants argue the trial court erred if it did not apply Texas law in considering admitted
evidence concerning conduct by which personal jurisdiction might be acquired over a
nonresident party.
In support of their argument of error by the trial court if it did not apply Texas law to the
determination of enforceability of the Kansas default judgment, appellants cite the “Client
Services Agreement—Savings and Debt Negotiation” (Client Services Agreement) between
appellee and the Lloyd Ward Group, P.C. Appellants argue it was the intention of the Lloyd
Ward Group, P.C. and appellee “in their written contract” that Texas law would apply. The
paragraph of the Client Services Agreement entitled “Arbitration of Dispute” provides in
pertinent part:
Client understands that this agreement is performable in Collin County, Texas and
hereby consents to venue and jurisdiction in Collin County, Texas under Texas
state law for any dispute arising hereunder. The parties will submit all disputes
arising under or related to this Agreement to binding arbitration according to the
then prevailing rules and procedures of the American Arbitration Association.
Texas law will govern the rights and obligations of the parties with respect to the
matters in controversy.
–2–
According to appellants, appellee did not plead or prove Kansas law, provide authority as
to why Kansas law is applicable to the Texas court’s jurisdictional inquiry, or give notice to
appellants of appellee’s intention to rely on Kansas law. Texas rule of evidence 202 provides:
A court upon its own motion may, or upon the motion of a party shall, take
judicial notice of the constitutions, public statutes, rules, regulations, ordinances,
court decisions, and common law of every other state, territory, or jurisdiction of
the United States. A party requesting that judicial notice be taken of such matter
shall furnish the court sufficient information to enable it properly to comply with
the request, and shall give all parties such notice, if any, as the court may deem
necessary, to enable all parties fairly to prepare to meet the request. A party is
entitled upon timely request to an opportunity to be heard as to the propriety of
taking judicial notice and the tenor of the matter noticed. In the absence of prior
notification, the request may be made after judicial notice has been taken.
Judicial notice of such matters may be taken at any stage of the proceeding. The
court’s determination shall be subject to review as a ruling on a question of law.
TEX. R. EVID. 202.
The record does not contain a motion by appellee, written or verbal, requesting that the
trial court apply or take judicial notice of Kansas law. We find nothing in this record to
demonstrate appellee followed the procedures required by Texas law with regard to application
of Kansas law. When a party does not provide a court with proof of laws of another state by
judicial notice or otherwise, then the laws are presumed to be the same as that of Texas. See
Johnson v. Structured Asset Servs., LLC, 148 S.W.3d 711, 720 (Tex. App.—Dallas 2004, no
pet.) (“[I]n the absence of a request to take judicial notice or proper proof that the law of another
state is applicable, Texas courts presume a sister state’s laws are the same as Texas law.”);
Mindis Metals, Inc. v. Oilfield Motor & Control, Inc., 132 S.W.3d 477, 487 (Tex. App.—
Houston [14th Dist.] 2004, pet. denied) (when party does not provide a court with proof of laws
of another state by judicial notice or otherwise, the laws are presumed to be the same as that of
Texas); see also Colvin v. Colvin, 291 S.W.3d 508, 514 (Tex. App.—Tyler 2009, no pet.)
–3–
Therefore, under these circumstances, a trial court would appropriately apply Texas law to the
determination of the propriety of the Kansas’s court exercising jurisdiction over appellants. 1
The Kansas default judgment provides that “[b]y defaulting, each of the factual
allegations and conclusions contained in [appellee’s] Petition and the Motion for Default
Judgment are deemed admitted by [appellants].” According to appellants, there is no Texas law
comparable to Kansas law “described by Appellee, which would permit a plaintiff’s pleadings,
on a defendant’s default, to be deemed admitted.” 2 However, Texas case law specifically
provides that once a default judgment is taken on an unliquidated claim, all allegations of fact set
forth in the petition are deemed admitted, except the amount of damages. Morgan v.
Compugraphic Corp., 675 S.W.2d 729, 731 (Tex. 1984); Argyle Mech., Inc. v. Unigus Steele,
Inc., 156 S.W.3d 685, 687 (Tex. App.—Dallas 2005, no pet.) (“When a default judgment is taken
against non-answering defendants on an unliquidated claim, all allegations of fact contained in
the petition are deemed admitted, except for the amount of damages.”); see also Tex. R. Civ. P.
243. 3
Appellants contend if the trial court did not apply Texas law to the determination of
personal jurisdiction, it erred. However, nothing in the record demonstrates the trial court did
not apply Texas law to this determination. We resolve appellants’ third issue against them.
1
The trial court would appropriately apply Texas law to procedural questions. “The law of the forum state applies to procedural questions.”
In re Lisa Laser USA, Inc., 310 S.W.3d 880, 883 n.2 (Tex. 2010) (orig. proceeding) (per curiam). Procedural questions include matters such as
preservation of error, admissibility of evidence, and standards of review. See Arkoma Basin Exploration Co. v. FMF Assocs. 1990-A, Ltd., 249
S.W.3d 380, 387–90 (Tex. 2008) (applying Texas law to procedural matters, including preservation of error and objections to and sufficiency of
expert testimony, and applying Virginia law to fraud claim).
2
Appellants state there is no “equivalent” to “some” of the Kansas statutes allegedly violated as described in “Appellee’s Kansas law suit,”
but appellants state the Kansas statutes allegedly violated by appellants are irrelevant to the determination of the Kansas court’s personal
jurisdiction over them. See Karstetter v. Voss, 184 S.W.3d 396, 402 (Tex. App.—Dallas 2006, no pet.) (in collateral attack on a sister state’s
judgment, no defense that goes to the merits of the original controversy may be raised).
3
The Kansas Order of Default Judgment provides “[appellants] were each given notice of this hearing and the amount of unliquidated
damages sought by [appellee] pursuant to Kansas Supreme Court Rule 118(d). Proof of compliance with Kansas Supreme Court Rule 118(d) has
been filed with the Court in this matter.”
–4–
Denial of Motion to Vacate Kansas Default Judgment
In their first issue, appellants assert the Kansas default judgment was not entitled to full
faith and credit because the Kansas court never acquired personal jurisdiction over appellants,
and, therefore, the trial court erred by not granting appellants’ motion set aside the Kansas
default judgment.
Full Faith and Credit
Under the United States Constitution, each state must give a final judgment of a sister
state the same force and effect the judgment would be entitled to in the state in which it was
rendered. U.S. CONST. art. IV, § 1. A properly proven foreign judgment must be recognized and
given effect in a Texas court coextensive with that to which it is entitled in the rendering state.
Bard v. Charles R. Myers Ins. Agency, Inc., 839 S.W.2d 791, 794 (Tex. 1992).
Enforcement of foreign judgments in Texas is governed by the Uniform Enforcement of
Foreign Judgments Act (UEFJA). TEX. CIV. PRAC. & REM. CODE ANN. §§ 35.001–.008 (West
2008 & Supp. 2013). When a judgment creditor files an authenticated copy of a foreign
judgment pursuant to the UEFJA, a prima facie case for its enforcement is presented. Mitchim v.
Mitchim, 518 S.W.2d 362, 364 (Tex. 1975) (quoting Garman v. Reynolds, 284 S.W.2d 262, 264
(Tex. Civ. App.—Fort Worth 1955, writ ref’d); see also Russo v. Dear, 105 S.W.3d 43, 46 (Tex.
App.—Dallas 2003, pet. denied) (party seeking to enforce a foreign judgment has initial burden
to present a judgment that appears on its face to be a final, valid, and subsisting judgment).
Under this principle, Texas is required to enforce a valid judgment from another state. See Bard,
839 S.W.2d at 794. The fact that a foreign judgment was taken by default does not defeat its
presumption of validity. Markham v. Diversified Land & Exploration Co., 973 S.W.2d 437, 439
(Tex. App.—Austin 1998, pet. denied).
–5–
Once a properly authenticated copy of the judgment is introduced, the burden of attacking
the judgment and establishing why it should not be given full faith and credit shifts to the
defendant. See Starzl v. Starzl, 686 S.W.2d 203, 205 (Tex. App.—Dallas 1984, no writ);
Minuteman Press Int’l, Inc. v. Sparks, 782 S.W.2d 339, 340–41 (Tex. App.—Fort Worth 1989,
no writ). Public policy favors recognizing the validity of judgments. Garza v. Tex. Alcoholic
Beverage Comm’n, 83 S.W.3d 161, 166 (Tex. App.—El Paso 2000), aff’d, 89 S.W.3d 1 (Tex.
2002). Therefore, “[w]hen an attack is made upon a judgment, whether directly or collaterally,
all presumptions ‘consonant with reason are indulged in order to uphold the binding effect of
such judgment.’” Charles Brown, L.L.P. v. Lanier Worldwide, Inc., 124 S.W.3d 883, 894 (Tex.
App.—Houston [14th Dist. 2004, no pet.) (quoting Garza, 83 S.W.3d at 166). The presumption
of validity of the foreign judgment can only be overcome by clear and convincing evidence to
the contrary. Cash Register Sales & Servs. of Houston, Inc. v. Copelco Capital, Inc., 62 S.W.3d
278, 281 (Tex. App.—Houston [1st Dist.] 2001, no pet.). The defendant may try to prove any
affirmative defense to the judgment; those affirmative defenses include lack of jurisdiction,
faulty service, or lack of finality. Minuteman Press, 782 S.W.2d at 342. 4 A defendant may
assert that the sister state’s exercise of jurisdiction offends due process because the defendant
does not have minimum contacts with the sister state. Cash Register Sales & Servs., 62 S.W.3d
at 281; see also O’Brien v. Lanpar Co., 399 S.W.2d 340, 341 (Tex. 1966).
A defense asserted in a Texas court against the enforcement of a foreign judgment is a
collateral attack. Karstetter v. Voss, 184 S.W.3d 396, 402 (Tex. App.—Dallas 2006, no pet.);
Cash Register Sales & Servs., 62 S.W.3d at 281. In a collateral attack on a sister state’s
judgment, no defense that goes to the merits of the original controversy may be raised.
Karstetter, 184 S.W.3d at 402; Goodier v. Duncan, 651 S.W.2d 25, 27 (Tex. App.—Dallas 1983,
4
Here, appellants do not contend they were not properly served with the Kansas lawsuit or that the Kansas judgment is not final.
–6–
writ ref’d n.r.e.) (concluding the merits of the underlying action, dealing with an arbitration
award, could not be addressed in an action to enforce the judgment); Mindis Metals, 132 S.W.3d
at 486 n.7 (challenge to enforcement of foreign judgment is collateral attack and merits of
original controversy may not be challenged); Cash Register Sales & Servs., 62 S.W.3d at 281. A
collateral attack on a judgment is successful only where the judgment is established as void.
Karstetter, 184 S.W.3d at 402. A judgment is void only when it is apparent the court rendering it
lacked (1) jurisdiction over the parties or property; (2) jurisdiction over the subject matter; (3)
jurisdiction to enter the particular judgment; or (4) the capacity to act as a court. Id.; see also
Browning v. Placke, 698 S.W.2d 362, 363 (Tex. 1985).
Personal Jurisdiction
The Texas long-arm statute permits Texas courts to exercise jurisdiction over nonresident
defendants. See TEX. CIV. PRAC. & REM. CODE ANN. §§ 17.041–.045 (West 2008). 5 Texas
courts may assert personal jurisdiction over a nonresident if (1) the Texas long-arm statute
authorizes the exercise of jurisdiction, and (2) the exercise of jurisdiction comports with federal
and state constitutional due process guarantees. Retamco Operating, Inc. v. Republic Drilling
Co., 278 S.W.3d 333, 337 (Tex. 2009). The long-arm statute’s broad language allows Texas
courts to “reach as far as the federal constitutional requirements of due process will allow.” Moki
Mac River Expeditions v. Drugg, 221 S.W.3d 569, 575 (Tex. 2007) (quoting Guardian Royal
Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991)). Under
5
As discussed above with regard to appellants’ third issue, we have concluded appellee did not satisfy statutory requirements for
application of Kansas law in determining personal jurisdiction, and there is no evidence the trial court did not apply Texas law to that
determination. However, we note that in Karstetter, this Court has stated Kansas law regarding personal jurisdiction over a non-resident
defendant comports with Texas law:
The Kansas long-arm statute authorizes Kansas courts to exercise jurisdiction over a nonresident defendant that does
business in Kansas. See K.S.A. § 60-308(b); McNeal v. Zobrist, 365 F. Supp. 2d 1166, 1169 (D. Kan. 2005). As in Texas,
the Kansas long-arm statute is liberally construed to assert personal jurisdiction over nonresident defendants to the full
extent permitted by the due process clause. See Anderson v. Heartland Oil & Gas, Inc., 249 Kan. 458, 819 P.2d 1192,
1197–1199 (1991); OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998); Federated
Rural Elec. Ins. Corp. v. Kootenai Elec. Coop., 17 F.3d 1302, 1305 (10th Cir. 1994); see also BMC Software, 83 S.W.3d at
795.
Karstetter, 184 S.W.3d at 402–03.
–7–
constitutional due process analysis, personal jurisdiction is achieved “when the nonresident
defendant has established minimum contacts with the forum state, and the exercise of jurisdiction
comports with ‘traditional notions of fair play and substantial justice.’” Id. at 575 (quoting Int’l
Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 90 L. Ed. 95 (1945)). The purpose of
the minimum contacts analysis is to protect a nonresident defendant from being haled into court
when its relationship with the forum state is too attenuated to support jurisdiction. Am. Type
Culture Collection, Inc. v. Coleman, 83 S.W.3d 801, 806 (Tex. 2002). “Significant contacts
suggest that the defendant has taken advantage of forum-related benefits, while minor ones imply
that the forum itself was beside the point.” Spir Star AG v. Kimich, 310 S.W.3d 868, 872 (Tex.
2010). Only if minimum contacts are established does the court consider the second prong of the
constitutional due process analysis—whether maintenance of the action offends traditional
notions of fair play and substantial justice. Foley v. Trinity Indus. Leasing Co., 314 S.W.3d 593,
602 (Tex. App.—Dallas 2010, no pet.); see also Clark v. Noyes, 871 S.W.2d 508, 520 (Tex.
App.—Dallas 1994, no writ).
A defendant’s contacts with a forum can give rise to either specific or general
jurisdiction. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795–96 (Tex. 2002).
General jurisdiction will attach if the defendant’s contacts with the forum are continuous and
systematic, regardless of whether the alleged liability arises from those contacts. Id. at 796. 6
Specific jurisdiction is dispute-specific and attaches when the plaintiff’s cause of action arises
out of or relates to the nonresident defendant’s contacts with the forum state. Retamco, 278
S.W.3d at 338. The analysis focuses on the relationship among the defendant, the forum, and the
6
In his petition filed in the Kansas lawsuit against appellants, appellee’s pleadings are specific to the facts regarding appellants’ liability for
activity involving appellee only. See Kelly v. Gen. Interior Constr., Inc., 301 S.W.3d 653, 658 (Tex. 2010) (“Because the plaintiff defines the
scope and nature of the lawsuit, the defendant’s corresponding burden to negate jurisdiction is tied to the allegations in the plaintiff’s pleading.”).
Although appellee’s brief discusses evidence regarding appellants’ internet websites, whether those websites were interactive, and the testimony
of Lloyd Ward that “we” have seven Kansas clients who entered into Client Service Agreeements, appellee does not argue this evidence supports
general jurisdiction.
–8–
litigation. Id. For specific jurisdiction to attach, there must be a substantial connection between
the nonresident defendant’s contacts with the forum and the operative facts of the litigation.
Moki Mac, 221 S.W.3d at 585.
Under either a specific or general jurisdiction analysis, the relevant contacts are those
through which the defendant “purposefully avails itself of the privilege of conducting activities
within the forum state, thus invoking the benefits and protections of its laws.” Retamco, 278
S.W.3d at 338. In determining purposeful availment, we consider three issues. Id. at 338–39.
First, only the defendant’s contacts with the forum are relevant, not the unilateral activity of
another party or third person. Id. at 339. Second, the contacts must be purposeful rather than
random, fortuitous, or attenuated. Id. Third, the defendant must seek some benefit, advantage,
or profit by availing itself of the jurisdiction. Id. What is important is the quality and nature of
the defendant’s contacts with the forum state rather than their number. Id.
Standard of Review
A motion contesting enforcement of a foreign judgment operates as a motion for new
trial. Karstetter, 184 S.W.3d at 402; Mindis Metals, 132 S.W.3d at 483; see also Moncrief v.
Harvey, 805 S.W.2d 20, 23 (Tex. App.—Dallas 1991, no writ) (analogizing motion to vacate
foreign judgment to motion for new trial with respect to filing deadlines and appellate
timetables). A trial court has broad discretion in ruling on a motion for new trial, and we may
not disturb its ruling absent an abuse of discretion. Karstetter, 184 S.W.3d at 402; Mindis
Metals, 132 S.W.3d at 485. The test for abuse of discretion is whether the trial court acted
without reference to any guiding rules or principles or whether the trial court’s actions were
arbitrary or unreasonable under the circumstances of the case. Downer v. Aquamarine
Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985).
–9–
We apply the abuse of discretion standard recognizing that the law required the trial court
to give full faith and credit to the Kansas default judgment unless appellants established an
exception. See Mindis Metals, 132 S.W.3d at 485. The determination of whether appellants
established an exception to full faith and credit generally involves a factual inquiry, not
resolution of a question of law. See id. at 486. Whether a court has personal jurisdiction over a
defendant is a question of law. BMC Software, 83 S.W.3d at 794. The trial court has no
discretion in applying the law to the established facts. Mindis Metals, 132 S.W.3d at 485.
Therefore, we review the record to determine whether the trial court misapplied the law to the
established facts by concluding appellants did not establish an exception to full faith and credit.
Id. at 486.
Analysis
Appellee sued appellants in a district court of Marion County, Kansas for violations of
the Kansas Consumer Protection Act, violations of the Kansas Credit Services Organization Act,
and breach of fiduciary duty. Appellants had the election not to appear in the Kansas court. See
Baldwin v. Iowa State Traveling Men’s Ass’n, 283 U.S. 522, 525 (1931). Appellants did not
appear in the Kansas court, and the Kansas court entered the default judgment against appellants.
The Texas district court lawsuit was brought by appellee to enforce the Kansas default judgment.
Therefore, appellants could raise the issue of personal jurisdiction in the Texas lawsuit because
they “never [had their] day in court with respect to jurisdiction.” Id.
By filing an authenticated copy of the Kansas default judgment, appellee presented a
prima facie case for its enforcement in Texas, and the burden shifted to appellants to prove why
it should not be given full faith and credit. 7 According to appellants’ motion to vacate, the
7
On appeal, appellants assert in a footnote of their brief that it “[i]s not clear . . . the Kansas court filings were properly authenticated.” In
appellants’ objections and motion to strike appellee’s exhibits filed in the trial court, appellants objected to the Order of Default Judgment,
stating, “If the Marion County District Clerk’s original ‘attestation’ was filed with the court, no objection. Otherwise, it is not clear what
–10–
Kansas default judgment offends due process because they did not have minimum contacts with
Kansas sufficient to give rise to either general 8 or specific jurisdiction, asserting “they did not
have continuous or systematic contacts in Kansas and they did not conduct any activities within
Kansas.” Appellants contend that, because appellee specifically sought out the services of Lloyd
Ward, P.C., Lloyd Ward & Associates, and Lloyd Ward Group, P.C., any contacts appellants had
with Kansas were fortuitous and not purposeful.
The Kansas default judgment recites jurisdictional facts, stating appellants are subject to
the Kansas court’s jurisdiction because:
they each, in person or through an agent or instrumentality, and operating as a
joint venture at all times relevant to this dispute: (1) transacted business in
Kansas; (2) committed tortious acts in Kansas; (3) entered into a contract with
[appellee], a resident of Kansas, to be performed in whole or in part in Kansas, (4)
caused injury to [appellee] arising out of [appellants’] acts and omissions outside
of Kansas when, at the time, [appellants] were engaged in solicitation or service
activities in Kansas; and (5) provided legal advice and assistance to [appellee] in
responding to a lawsuit filed against [appellee] in Marion County District Court
(Case No. 10 LM 28), and assisting [appellee] in obtaining a continuance of a
hearing on a motion for summary judgment filed in the same matter. 9
Although recitals in the foreign judgment are generally presumed valid, in an action to enforce a
foreign judgment, a Texas court may consider evidence that goes to the jurisdiction of the sister
state court over the parties or the subject matter. Lanier Worldwide, Inc., 124 S.W.3d at 903
n.34.
documents . . . the ‘papers in writing to which this certificate is attached’ are the subject of certification.” Appellants moved the trial court to
strike appellee’s exhibits, including the Order of Default Judgment, “to the extent such exhibits contain documents which have not been properly
authenticated . . . .” On appeal, appellants acknowledge the trial court did not rule on their objections to appellee’s exhibits. To complain on
appeal of an asserted defect in authentication of appellee’s exhibits, appellants were required not only to object, but to obtain a ruling from the
trial court on their objections. See Shaw v. Cnty. of Dallas, 251 S.W.3d 165, 174 (Tex. App.—Dallas 2013, no pet.) (to preserve complaint for
appellate review, party must generally present the complaint to the trial court by timely request, motion, or objection, stating the specific grounds,
and obtain a ruling); see also Watts v. Hermann Hosp., 962 S.W.2d 102, 105 (Tex. App.—Houston [1st Dist.] 1997, no pet.). Improper
certification or authentication objections are waived by appellants’ failure to secure rulings on those objections. See Hicks v. Humble Oil & Ref.
Co., 970 S.W.2d 90, 93 (Tex. App.—Houston [14th Dist.] 1998, pet. denied).
8
As discussed above, appellee has not argued appellants were subject to personal jurisdiction of Kansas on the basis of general jurisdiction.
9
Appellee’s Petition against appellants in the Kansas lawsuit underlying the Kansas Order of Default Judgment contains the following
allegation regarding jurisdiction over appellants:
8. Pursuant to K.S.A. 60-308(b)(1), the Court has jurisdiction over [appellants] because they transacted business in
Kansas, committed tortious acts in Kansas, and entered into a contract with [appellee], a resident of the State of Kansas and
the contract was performed in whole or in part in [Kansas].
–11–
In appellee’s Petition against appellants in the Kansas lawsuit underlying the Kansas
default judgment, appellee alleged the following facts:
2. Defendant Lloyd Ward is an attorney licensed in Texas. He is an officer
of [Lloyd Ward, P.C., Lloyd Ward & Associates, Lloyd Ward Group, P.C.] and
he participated in, approved, and/or sanctioned the wrongful acts taken by [Lloyd
Ward, P.C., Lloyd Ward & Associates, Lloyd Ward Group, P.C.].
3. Lloyd Ward, P.C. is a law firm that provides debt reduction and debt
settlement plans to members of the general public.
4. Lloyd Ward & Associates d/b/a Lloyd Ward Group, LLC is a law firm that
provides debt reduction and debt settlement plans to members of the general
public.
***
6. Lloyd Ward, Lloyd Ward, P.C., and Lloyd Ward & Associates are a joint
venture.
***
13. In Mid-April 2010, [appellee] researched debt reduction and debt
negotiation plans on the internet. On [appellants’] website, he was required to
input his name, address, and telephone number in order to view material on debt
negotiation plans.
14. [Appellee] was contacted by telephone by Chad McDonald, representing
[appellants].
***
18. [Appellee] hired [appellants] on April 16, 2010. [Appellee] entered into
[Client Services Agreement] contract with [appellants] . . . over the internet from
his home in Hillsboro, Kansas, while on the telephone with McDonald.
19. While the contract purports to be between [appellee] and “Lloyd Ward
Group, LLC, an operating division of Lloyd Ward, P.C.,” it also includes “Lloyd
Ward Attorney at Law” in the heading.
20. The contract provides that “Client [appellee] retains [Lloyd Ward Group,
LLC, an operating division of Lloyd Ward, P.C.] for the limited and express
purposes of providing legal and administrative services limited to Savings and
Debt Negotiation with respect to [appellee’s] existing debt and current creditors . .
..
***
21. The contract further provides that “[Lloyd Ward Group, LLC, an operating
division of Lloyd Ward, P.C.] will act as [appellee’s] attorney to negotiate with
[appellee’s] creditors . . . .”
–12–
22. As part of the contract with [appellants], [appellee] was required to sign an
“Authorization for Debt Negotiation” authorizing Lloyd Ward Group to negotiate
on his behalf. The heading to the Authorization for Debt Negotiation includes
“Lloyd Ward & Associates, Attorneys at Law” and “Lloyd Ward P.C.”
23. As part of [appellee’s] contract with [appellants], [appellee] was required to
open a trust account with NoteWorld Servicing Center, LLC . . . .
***
25. To enroll in [appellants’] Saving and Debt Negotiation Plan, [appellee]
was required to pay [appellants] a “program fee” . . . .
***
31. As instructed by [appellants], [appellee] quit making payments to Citibank
when he entered into a contract with [appellants] . . . .
***
33. [Appellants] contacted [appellee] on July 21, 2010, through Joy Phillips,
who claimed to be his “Account Specialist.” She instructed [appellee] to contact
her with any questions or concerns. Her email address was
[lloydwardlawfirm.com].
***
38. In response to [an earlier email from appellee], Joy Phillips emailed
documents to [appellee] that were intended to prove that [appellants] had actually
contacted Citibank and had been negotiating on his behalf, as provided in his
contract. These documents were:
(1) a purported copy of a letter to Citibank . . . stating that
[appellee] “has enrolled in Lloyd Ward & Associates debt
Negotiation Program”;
(2) a purported copy of an envelope addressed to Citibank . . .
with a return address of “Lloyd Ward & Associates Attorney at
Law”; and
(3) a purported copy of an envelope addressed to Citibank . . .
with a return address of “Lloyd Ward & Associates Attorney at
Law.”
39. . . . [Appellee] received an email from Joy Phillips informing him that
[appellants] was [sic] “working diligently to resolve [his] accounts and [she] will
facilitate active negotiations the moment we have sufficient funds.”
***
–13–
48. . . . [Appellee] emailed Joy Phillips to inform her that he had been served
with the lawsuit [filed by Citibank against him] and that there was a hearing set
for November 22, 2010 . . . .
49. [Appellee] was then contacted by Joy Cooper, another employee of
[appellants]. Her email address was [lloydwardlawfirm.com].
50. Joy Cooper gave [appellee] advice on drafting a response to the summons
and advice on drafting a hardship letter. She asked [appellee] to email drafts to
her as soon as possible. The “Summons Response Form Instructions” that Cooper
gave to [appellee] are attached [to appellee’s pleading].
***
60. [In a conversation with Joy Phillips, appellee] explained that he had been
contacted by someone named “Dana” with [appellants] and that she said
[appellants] would now try to negotiate a payment plan with Citibank.
***
69. . . . Citibank’s attorneys and someone named “Dana” from [appellants]
jointly requested and received a continuance in Citibank’s lawsuit against
[appellee].
Those facts are deemed admitted. See Compugraphic Corp., 675 S.W.2d at 731; Argyle Mech.,
Inc., 156 S.W.3d at 687.
In contesting personal jurisdiction over them in Kansas, appellants relied on the affidavits
of Lloyd Ward and Lloyd Ward’s testimony at the hearing of appellants’ motion to vacate the
Kansas default judgment. The evidence is undisputed that Lloyd Ward is a Texas lawyer and is
the sole officer and director of Lloyd Ward, P.C., Lloyd Ward & Associates, and Lloyd Ward
Group, P.C. According to appellants, Lloyd Ward & Associates, Lloyd Ward, P.C., and Lloyd
Ward Group, P.C. are separate Texas business entity law firms with which Lloyd Ward is
affiliated. Lloyd Ward attested he has never been to Kansas and none of appellants own property
in Kansas, maintain a bank account in Kansas, or have an office in Kansas. According to Lloyd
Ward’s affidavit, Lloyd Ward, P.C., Lloyd Ward & Associates, and Lloyd Ward Group, P.C. do
not maintain an office or “do business” in Kansas. Lloyd Ward stated none of appellants
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specifically availed themselves of the protections or privileges of Kansas law and that it has
always been the intention of Lloyd Ward, P.C., Lloyd Ward & Associates, and Lloyd Ward
Group, P.C. “to remain under the auspices of Texas law.” 10
Lloyd Ward attested neither he, Lloyd Ward, P.C. or Lloyd Ward & Associates entered
into a contract to be performed in whole or in part with appellee. Appellants do not contest
appellant Lloyd Ward Group, P.C. contracted with appellee. Appellee pleaded and the Kansas
default judgment specifically states appellants operate as a joint venture. Appellants’ evidence in
support of their motion to vacate the Kansas default judgment does not establish by clear and
convincing evidence that appellants do not operate as a joint venture. Lloyd Ward
acknowledged appellee and Lloyd Ward Group, P.C. 11 entered into the Client Services
Agreement 12 and stated it is a “standard contract used by [Lloyd Ward, P.C., Lloyd Ward &
Associates, and Lloyd Ward Group, P.C.] for all clients seeking services similar to those sought
by [appellee].” At the top of the Client Services Agreement, it references “Lloyd Ward, P.C.”
and “Lloyd Ward, Attorney at Law,” as well as the email address for Lloyd Ward. Further, the
record contains a letter reflecting signature by “Lloyd Ward, Esq., Lloyd Ward, P.C.,” which
states that appellee entered into an agreement with “Lloyd Ward.” 13 In conjunction with the
Client Services Agreement, appellee entered into the “Authorization for Debt Negotiation” with
10
In their appellate brief, appellants note that, in addition to their motion for new trial, they requested a declaration the Kansas default
judgment was unenforceable for lack of personal jurisdiction over appellant Lloyd Ward Group, P.C. “because of Appellee’s agreement to
jurisdiction in Texas.” Citing to the “Arbitration of Dispute” provision of the Client Services Agreement, appellants state in their brief that
“jurisdiction for disputes between the parties was to be in Texas.” While this paragraph provides for consent to venue and jurisdiction in Texas
of disputes arising under the agreement, it does not contain agreement to exclusive jurisdiction in Texas. See Mabon Ltd. v. Afri-Carib Enters.,
Inc., 29 S.W.3d 291, 297 (Tex. App.—Houston [14th Dist.] 2000, no pet.) (forum selection clause stating Nigeria “shall have venue” does not
provide for exclusive jurisdiction in Nigeria and is permissive in nature, indicating parties may bring suit in Nigeria but are not required to do so).
“An enforceable forum selection clause must contain explicit language regarding exclusivity.” Id.; see also SW Intelecom, Inc., 997 S.W.2d 322,
323–25 (Tex. App.—Austin 1999, pet. denied).
11
Lloyd Ward testified Lloyd Ward Group, LLC does not exist and should be correctly referenced as Lloyd Ward Group, P.C.
12
Appellants argue that the contract upon which appellants are sued is between appellee and Lloyd Ward Group, P.C. only, and, therefore,
appellee “has no cause of action against Lloyd Ward, individually, Lloyd Ward, P.C., or Lloyd Ward & Associates.” However, in this collateral
attack on Kansas’s default judgment, no defense that goes to the merits of the original controversy may be raised. See Karstetter, 184 S.W.3d at
402; Goodier, 651 S.W.2d at 27.
13
Lloyd Ward testified that the reference in the letter to an agreement with “Lloyd Ward” was actually a reference to “Lloyd Ward Group,
P.C.,” the signature on the letter was a stamp and not actually signed by him, and the letter came from a secretary in his office.
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Lloyd Ward Group, P.C. The heading of the Authorization for Debt Negotiation references
Lloyd Ward & Associates and Lloyd Ward, P.C. As part of the Client Services Agreement,
appellee was required to open a trust account with NoteWorld Servicing Center, LLC. The
NoteWorld Servicing Center “Customer Account Services Information” lists the Debt Settlement
Company as Lloyd Ward & Associates.
In their brief, appellants argue Lloyd Ward Group, P.C. did not enter into a contract to be
performed in Kansas with appellee, and in support of that argument, appellants cite to a portion
of Lloyd Ward’s testimony at the hearing of appellants’ motion to vacate. However, appellee’s
objection to that testimony was sustained, and appellants have not asserted on appeal that the
trial court erred in sustaining appellee’s objection. The testimony may not be considered as
evidence in support of appellants’ motion to vacate the Kansas default judgment. Appellants’
evidence in support of their motion to vacate the Kansas default judgment did not establish by
clear and convincing evidence that they did not undertake activities and business services in
Kansas pursuant to the contract with appellee for debt negotiation. The evidence established
appellants provided advice on withholding payment of debt to Citibank, drafting a response to
the lawsuit filed against appellee by Citibank in the Marion County, Kansas district court, and
preparing a “hardship letter” to explain appellee’s financial hardship. Additionally, appellants
communicated on behalf of appellee with attorneys for Citibank and, in conjunction with
Citibank’s attorneys, requested and were granted a continuance in Citibank’s Kansas lawsuit
against appellee.
Appellants did not overcome the presumption of validity of the Kansas default judgment
by clear and convincing evidence. The evidence in the record established appellants’ liability
arose from or is related to activity conducted by appellants in Kansas and that appellants had
purposeful contacts with Kansas, thus invoking the benefits and protections of its laws. See
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Guardian Royal Exch. Assurance, Ltd., 815 S.W.2d at 226. Appellants had sufficient minimum
contacts with Kansas to permit the Kansas district court to exercise personal jurisdiction over
them.
Conclusion
Appellants did not establish by clear and convincing evidence that the Kansas court
lacked personal jurisdiction over them. We conclude the record establishes sufficient minimum
contacts with Kansas to permit the Kansas district court to exercise personal jurisdiction over
appellants. 14 The record does not establish that the Kansas judgment is void. Hungate v.
Hungate, 531 S.W.2d 650, 653 (Tex. Civ. App.—El Paso 1975, no writ) (when a sister state
judgment is assailed in Texas, judgment must be void for collateral attack to be successful).
Accordingly, we resolve appellants’ first issue against them.
Consideration of Appellants’ Evidence
In their second issue, appellants state the trial court erred if it did not consider appellants’
evidence concerning the alleged jurisdiction of Kansas over each appellant. According to
appellants, the “competent evidence” before the trial court was “clear, convincing, and
uncontroverted, show[ing] that Kansas did not acquire in personam jurisdiction over any of the
Appellants, thus, the Kansas default judgment is void and unenforceable.”
Here, the only justification for the trial court to grant appellants’ motion to vacate the
Kansas default judgment would be a determination that the Kansas court lacked personal
jurisdiction over appellants. Based on a thorough review of the record, we concluded with
regard to appellants’ first issue that the trial court did not err by permitting appellants’ motion to
vacate the default judgment to be overruled by operation of law. See Strackbein v. Prewitt, 671
14
We question whether appellee asserted general jurisdiction over appellants in his pleading. However, to the extent appellee pleaded
general jurisdiction, having concluded appellants’ contacts with Kansas gave rise to specific jurisdiction, we need not address general
jurisdiction. See TEX. R. APP. P. 47.1.
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S.W.2d 37, 39 (Tex. 1984); see also Mindis Metals, Inc., 132 S.W.3d at 486 (we review record to
determine whether trial court misapplied law to established facts with regard to enforcement of
foreign judgment); Blandford v. Ayad, 875 S.W.2d 12, 14 (Tex. App.—Amarillo 1994, no writ)
(“[W]e will not presume from an orderless, and otherwise silent record that the trial court judged
the credibility of the witnesses, and then exercised its discretion to deny a motion for new trial by
allowing it to be overruled by operation of law. Instead, we will review the record to determine
whether a mistake of law was made in permitting the motion [for new trial] to be overruled by
operation of law.”).
The record does not support an argument that the trial court did not consider appellants’
admitted evidence concerning personal jurisdiction of the Kansas court over appellants. At the
hearing of appellants’ motion to vacate the default judgment, the trial court stated appellants
would be allowed to elicit testimony of Lloyd Ward and the trial court would “give it whatever
weight I think it’s entitled to.” At the end of the hearing, the trial court stated it would make its
ruling on appellants’ motion to vacate the Kansas default judgment based “on the record I’ve
got.” At oral argument, appellants’ counsel acknowledged there was nothing in the record to
show appellants’ admitted evidence was not considered by the trial court.
Appellants’ statement that there was clear and convincing evidence that the Kansas court
did not acquire personal jurisdiction over appellants is a reiteration of appellants’ first issue, and
as discussed above, we have concluded the trial court did not err by permitting appellants’
motion to vacate the Kansas default judgment to be overruled by operation of law. This record
does not support an argument the trial court erred by failing to consider appellants’ admitted
evidence. We resolve appellants’ second issue against them.
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Conclusion
We affirm the denial of appellants’ motion to vacate the Kansas default judgment.
/Robert M. Fillmore/
ROBERT M. FILLMORE
JUSTICE
120712F.P05
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S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
LLOYD WARD, LLOYD WARD, P.C., On Appeal from the 298th Judicial District
LLOYD WARD & ASSOCIATES, AND Court, Dallas County, Texas.
LLOYD WARD GROUP, P.C., Appellants Trial Court Cause No. DC-12-02323-M.
Opinion delivered by Justice Fillmore,
No. 05-12-00712-CV V. Justices Myers and Lewis participating.
KELLY HAWKINS, Appellee
In accordance with this Court’s opinion of this date, the order of the trial court denying
appellants’ motion to vacate the foreign judgment is AFFIRMED.
It is ORDERED that appellee Kelly Hawkins recover the full amount of the foreign
judgment and the costs of this appeal from appellants Lloyd Ward, Lloyd Ward, P.C., Lloyd
Ward & Associates, and Lloyd Ward Group, P.C. and from any supersedeas bond or cash deposit
in lieu of supersedeas bond. After the judgment and all costs have been paid, we DIRECT the
clerk of the trial court to release the balance, if any, of any supersedeas bond or cash deposit in
lieu of supersedeas bond to appellants.
Judgment entered this 16th day of December, 2013.
/Robert M. Fillmore/
ROBERT M. FILLMORE
JUSTICE
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