COMBUSTION ENGINEERING, INC. v. MANUEL OLIVAREZ NARVAEZ, ET AL.--Appeal from 148th District Court of Nueces County

    NUMBER 13-01-750-CV

    COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI

COMBUSTION ENGINEERING, INC., Appellant,

v.

BETTY ANN VUKICH, ET AL., Appellees.

On appeal from the 148th District Court of Nueces County, Texas.

O P I N I O N

Before Justices Hinojosa, Castillo, and Chavez[1]

Opinion by Justice Chavez

In this appeal from a no-answer default judgment, we are asked to decide whether a rule 11[2] agreement, filed after the judgment was granted, cured a deficiency in service of process. We hold that because it did not, the trial court never acquired in personam jurisdiction over appellant, and the judgment is therefore void. We reverse and remand.

In a Fourth Amended Petition filed October 26, 1999, in an ongoing lawsuit initially brought by Manuel Narvaez and others on August 28, 1995, appellees[3] were added as additional plaintiffs and appellant, Combustion Engineering, Inc., was added as an additional defendant. The petition alleged that appellant could be served with process A[t]hrough Connecticut Valley Claim Service Company (ACVCSC@), 525 Brook Street, Rock Hill, Connecticut 06067, via certified mail, return receipt requested.@ Connecticut Valley was not otherwise identified, nor was any explanation given as to why appellant should be served through it. The non-resident citation issued by the district clerk is addressed to: ACOMBUSTION ENGINEERING, INC., C/O CONNECTICUT VALLEY CLAIM SERVICE COMPANY (ACVCSC@), 525 BROOK STREET, ROCK HILL, CONNECTICUT 06067, the defendant.@ An affidavit signed by Melanie A. Fagan attests that citation was served on appellant Aby delivering to: Combustion Engineering, Inc., by delivering to: CVCSC/Registered Agent, by delivering to: M.C./Authorized Agent . . .@[4] The signature on the return receipt is AMC.@

On August 14, 2000, a Fifth Amended Petition was filed.[5] Although appellees were named in the style of the pleading, their names were omitted from the paragraph identifying the plaintiffs in the petition, the specific ADamages@ section of the pleading, and the prayer. The Fifth Amended Petition was the live pleading on April 9, 2001, the day the case was called for trial. On that day, appellees were granted a no-answer default judgment against appellant and evidence on damages was presented the following day. The judgment awarding damages to appellees, signed on April 11, 2001, stated that because the order did not dispose of all issues and claims in the case, it was not a final judgment. Appellant filed a motion to vacate judgment or, alternatively, motion for new trial on May 10, 2001. Without ruling on appellant=s motion, the trial court severed appellees= claims on September 10, 2001 from the main cause of action.

In its first issue, appellant contends that on the date the judgment was granted, the trial court had not acquired in personam jurisdiction over it because the service of process was fatally flawed. No judgment can be rendered against a defendant unless properly served with citation, upon acceptance of or waiver of service, or upon an appearance by the defendant. Tex. R. Civ. P. 124; See Strawder v. Thomas, 846 S.W.2d 51, 62 (Tex. App.CCorpus Christi 1992, no writ) (op. on reh=g) (ARules relating to service of process are mandatory, and a failure to comply therewith, if a judgment be rendered against a party who was not served in accordance with those rules (and who did not waive service of citation or appear voluntarily) renders the judgment void.@).

Service on a foreign corporation is to be made upon its president, any vice-president or its registered agent for service. Tex. Bus. Corp. Act Ann. art. 2.11, ' A (Vernon 1980). Here, the citation was directed to appellant, identified in the petition as a foreign corporation, in care of Connecticut Valley Claims Service Company. Connecticut Valley=s identity or relationship to appellant, however, was not alleged. The return also fails to reflect that service was made on any of appellant=s officers or its registered agent for service. It is clear, therefore, that service was not properly made as required by article 2.11, section A. See id. At argument, appellees= counsel conceded that service was defective at the time the judgment was granted. Appellees argue, however, that the deficiency in service was cured by a rule 11 agreement signed on January 25, 2000 by appellant=s counsel and filed after the judgment was signed. Before addressing this issue, we examine the jurisdictional issues raised by appellees.

In their first two cross-points, appellees argue that we do not have jurisdiction to consider appellant=s evidence and legal arguments raised in its motion and amended motion for new trial because they were not timely filed. Appellees contend that appellant=s first motion for new trial was overruled by operation of law, and later, was expressly overruled by the trial court before appellant filed the motion and amended motion for new trial. Appellees base their argument on the fact that the default judgment was signed on April 11, 2001 and appellant=s motion to vacate, or alternatively, motion for new trial was filed on May 10, 2001. They argue that this was the only timely filed motion for new trial because it was filed within thirty days from the signing of the default judgment. See Tex. R. Civ. P. 329b(a). They also argue that this motion was overruled by operation of law on June 25, 2001 (seventy-five days after the judgment was signed).[6]

We disagree with appellees= argument because the judgment signed on April 11, 2001 was not a final judgment. The judgment itself said so. Rather, it was interlocutory because other parties still had unresolved claims pending when the judgment was granted. See City of Beaumont v. Guillory, 751 S.W.2d 491, 492 (Tex. 1988) (a judgment that does not dispose of all parties and issues in a pending suit is interlocutory and not appealable unless the trial court orders severance of the case). The interlocutory judgment became final and appealable on September 20, 2001, when appellees= claims were severed from the main cause of action. It was only then that the appellate timetable began to run. See Martinez v. Humble Sand & Gravel, Inc., 875 S.W.2d 311, 313 (Tex. 1994) (AWhen a severance order takes effect, the appellate timetable runs from the signing date of the order that made the judgment severed >final= and appealable.@). Accordingly, when the motion to vacate, or alternatively, motion for new trial was filed, the appellate timetable had not yet started to run and the motion was unaffected by rule 329b(c).

Although the motion to vacate, or alternatively, motion for new trial, was filed before the default judgment became final, it was nonetheless timely. SeeTex. R. Civ. P. 306c (every such motion [filed before judgment] Ashall be deemed to have been filed on the date of but subsequent to the time of signing of the judgment the motion assails@); Padilla v. LaFrance, 907 S.W.2d 454, 458 (Tex. 1995). On October 9, 2001, a hearing was held on the motion to vacate. The hearing consisted mostly of argument over whether the motion had been overruled by operation of law as previously discussed. Appellant argued that the motion to vacate was timely and that it could, in fact, still file a motion for new trial because thirty days from the date judgment became final had not yet elapsed. At the end of the hearing, the trial court informed counsel to submit letter briefs and that it would either issue a ruling on the motion or schedule a hearing should it become necessary to take evidence.

On October 16, without further hearing, the trial court overruled the motion to vacate and the motion for new trial alternatively filed with the motion to vacate. Thereafter, appellant filed a motion for new trial on October 18 and an amended motion for new trial on October 22, 2001. At a hearing on November 16, 2001, appellees objected to the motions as not being timely because the first motion for new trial had been overruled and leave of court had not been obtained to file an amended motion. Although appellant=s October 19 motion for new trial and the October 22 amended motion for new trial were filed without leave of court, appellant, on the day of the hearing, sought and was granted leave to file them.

Rule 329b(b) allows one or more amended motions for new trial to be filed without leave of court if any preceding new trial motion has not been overruled and the amended motion is filed within thirty days after the judgment is signed. Tex. R. Civ. P. 329b(b). It follows, then, that where a preceding motion for new trial has been overruled, leave of court must be obtained in order to file one or more amended motions for new trial within thirty days after the judgment is signed. See Reviea v. Marine Drilling Co., 800 S.W.2d 252, 258 (Tex. App.BCorpus Christi 1990, writ denied). Because leave of court was granted in this case, we hold that the amended motion for new trial, the operative motion, was timely filed. Appellees= cross-points are overruled.

We next examine appellees= argument that the deficiency in service was cured when the rule 11 agreement was signed by one of appellant=s counsel. Appellees= counsel was involved in other asbestosis lawsuits that also involved Combustion Engineering as a defendant. In another case, a discovery dispute arose involving appellees= counsel and attorney Mary Lou Mauro, representing Combustion Engineering in that case.[7] The dispute was settled when Mauro was given additional time to file responses to a discovery request in exchange for her agreement to accept service for Combustion Engineering in this and other cases. Appellees= counsel=s representative and Mauro signed the letter, the rule 11 agreement, on January 25, 2000. There is disagreement about whether Mauro actually accepted service in this case when she signed the letter, or whether the letter only expressed her agreement to accept service when the petition was delivered to her, or whether she agreed to waive the deficiencies in service in this case. There is also disagreement as to whether the unsworn rule 11 agreement complied with the acceptance of service requirements set out in rule 119. See Tex. R. Civ. P. 119.[8]

Appellees argue that appellant judicially admitted in the rule 11 agreement that service was proper and free from defects and should not now be allowed to repudiate the agreement. Even if we agreed with appellees= position, which we do not, the fact remains that the agreement was not on file when the trial court granted the judgment. In order for the agreement to be enforced, it had to be filed with the papers as part of the record prior to the granting of the judgment. See Tex. R. Civ. P. 11;[9] see also LaFrance, 907 S.W.2d at 461 (purpose of filing requirement in rule 11 is satisfied so long as the agreement is filed before it is sought to be enforced). If appellees sought to make the agreement a part of the service of process, it needed to be on file for more than ten days before the hearing as required by rule 107. Rule 107 provides that no default judgment may be granted unless the citation with officer=s return shall have been on file with the clerk for ten days. Tex. R. Civ. P. 107. Before judgment can be granted to a party, there must be strict compliance with the appropriate service rules. Tex. R. Civ. P. 124; Carmona v. Bunzl Distribution, 76 S.W.3d 566, 568-69 (Tex. App.BCorpus Christi 2002, no pet.) (AUnless the record affirmatively shows, at the time the default judgment is entered, either an appearance by the defendant, proper service of citation on the defendant, or a written memorandum of waiver, the trial court does not have in personam jurisdiction to enter a default judgment against the defendant.@); Strawder, 846 S.W.2d at 62.

We hold that the unsworn rule 11 agreement in this case was not in strict compliance with rule 119 and could not serve as a valid waiver of citation or cure the defects in the service of process upon appellant. Because service of process was fatally defective at the time the default judgment was granted, the trial court did not acquire in personam jurisdiction over appellant and the judgment is therefore void. Appellant=s first issue is sustained. Due to our disposition of issue one, we need not address the other issues brought forth by the parties. See Tex. R. App. P. 47.1.

We REVERSE the judgment and REMAND the case for further proceedings.

MELCHOR CHAVEZ

Justice

Do not publish. Tex. R. App. P. 47.3.

Opinion delivered and filed this the

21st day of November, 2002.

[1]Retired Justice Melchor Chavez, assigned to this Court by the Chief Justice of the Supreme Court of Texas pursuant to Tex. Gov=t Code Ann. '75.002 (Vernon 1998).

[2]See Tex. R. Civ. P. 11.

[3]Appellees are Betty Ann Vukich, Individually and as Personal Representative of the Heirs and the Estate of and as Wrongful Death Beneficiary of John Vukich, Deceased, and David Vukich, John Vukich, Kathy Vukich Wilson, and Deborah Vukich, as Wrongful Death Beneficiaries of John Vukich; and Faye Toebe, Individually and as Personal Representative of the Heirs and the Estate of and as Wrongful Death Beneficiary of Leonard Toebe, Deceased.

[4] This affidavit was attached to appellees= motion for default judgment filed April 9, 2001.

[5] It is interesting to note that the Fourth Amended Petition listed the plaintiffs=attorneys as Silber Pearlman, P.C. and Kaeske-Reeves, L.L.P. The pleading is signed by Kay Gunderson Reeves of the Kaeske firm. Kaeske, appellees=attorney in this appeal, was not named as an attorney for the plaintiffs in the Fifth Amended Petition. Only Silber Pearlman, L.L.P. was named as attorneys for plaintiffs, and Marilyn Nix of that firm signed the pleading.

[6] Texas Rule of Civil Procedure 329b(c) provides that in the event a motion for new trial is not determined by written order signed within seventy-five days after the judgment is signed, it shall be considered overruled by operation of law on expiration of that period. See Tex. R. Civ. P. 329b(c).

[7] The discovery problem concerned a case styled Zapata, et al. v. Owens-Corning, et al., Cause No. 99-6100E, in the 148th Judicial District, Nueces County, Texas.

[8] Rule 119 states as follows:

The defendant may accept service of process, or waive the issuance or service thereof by a written memorandum signed by him, or by his duly authorized agent or attorney, after suit is brought, sworn to before a proper officer other than an attorney in the case, and filed among the papers of the cause, and such waiver or acceptance shall have the same force and effect as if the citation had been issued and served as provided by law. The party signing such memorandum shall be delivered a copy of plaintiff=s petition, and the receipt of the same shall be acknowledged in such memorandum. In every divorce action such memorandum shall also include the defendant=s mailing address.

Tex. R. Civ. P. 119.

[9] Rule 11 reads as follows: Unless otherwise provided in these rules, no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record. Tex. R. Civ. P. 11.