

Opinion
issued June 16, 2011  
 
 
 
 


 
 
 
 
 
 
 
 
 
 
In The
Court of Appeals
For The
First District of Texas
 

 

NO. 01-10-01126-CV
 

 

INVESCO INVESTMENT SERVICES, INC.,
Appellant
 
V.
 
FIDELITY DEPOSIT & DISCOUNT BANK, Appellee
 

 

On Appeal from the County Civil Court at
Law No. 3
Harris County, Texas
Trial Court Cause No. 964589-801
 

 

O P I N
I O N
In this restricted appeal, appellant,
Invesco Investment Services, Inc. (“Invesco”), challenges the trial court’s
default judgment entered against it and in favor of appellee, Fidelity Deposit
& Discount Bank (“Fidelity”), in Fidelity’s suit against Invesco for a writ
of garnishment.   In a single issue, Invesco contends that the
evidence is legally insufficient evidence to support the trial court’s default
judgment and the default judgment should be set aside on the ground that it, as
a “financial institution,” is protected from a default judgment in a
garnishment proceeding “as to the amount of damages.”[1]    
We reverse and remand.    
Background
          In
its application for the writ of garnishment, Fidelity, the garnishor, alleged
that it had domesticated a foreign judgment entered against Angela Maloney for
$44,206.31 in actual damages plus prejudgment interest and attorney’s fees, this
judgment remained unpaid, Maloney did not have sufficient property within her possession
sufficient to satisfy the judgment, and Maloney held an investment account with
Invesco.  Fidelity sought the writ
against Invesco, the garnishee, in order to apply the funds held in Maloney’s
investment account toward the judgment debt. 
In support of its application, Fidelity attached the affidavit of its
attorney, who testified that Fidelity sought the writ “to collect redemption
funds and/or liquidatable share certificates comprising the investment account”
that Invesco held on Maloney’s behalf. 
Invesco failed to timely file an
answer to the application, and Fidelity filed a motion for default judgment
seeking a judgment against Invesco for the amount of the actual damages,
interest, fees, and costs in its judgment against Maloney.  Fidelity supported its motion with the
affidavit of its attorney, who testified that the amounts owed on the
underlying judgment included $44,206.31 in actual damages, $17,698.86 in
pre-judgment interest, and $9,157.74 in attorney’s fees.  The trial court granted Fidelity’s motion and
entered a “default judgment of garnishment” for the full amounts stated in
Fidelity’s motion, plus post-judgment interest and costs.  Invesco timely filed this restricted appeal. 
Restricted Appeal
In its sole issue, Invesco argues
that the trial court’s default judgment should be set aside because Fidelity
presented no evidence regarding the value of any accounts held by Maloney, Invesco
qualifies as a protected financial institution under Texas Finance Code section
276.002, and section 276.002 precludes the entry of a default judgment “as to
the amount of damages” against a “financial institution” that fails to timely file
an answer to an application for a writ of garnishment.  See Tex. Fin. Code Ann. § 276.002 (Vernon
2006).
To attack a judgment by a restricted
appeal, the appeal must be filed (1) within six months after the trial court
signs the judgment; (2) by a party to the suit; (3) who, either in person or
through counsel, did not participate at trial; and (4) the error must be
apparent from the face of the record. Tex.
R. App. P. 26.1(c), 30; Alexander
v. Lynda’s Boutique, 134 S.W.3d 845, 848 (Tex. 2004); Norman Commc’ns v. Tex. Eastman Co., 955 S.W.2d 269, 270 (Tex. 1997)
(per curiam); Barry v. Barry, 193
S.W.3d 72, 74 (Tex. App.—Houston [1st Dist.] 2006, no pet.). The face of the
record consists of all the papers on file in the appeal, including any
reporter’s record. Osteen v. Osteen,
38 S.W.3d 809, 813 (Tex. App.—Houston [14th Dist.] 2001, no pet.).  A review of a restricted appeal includes
review of the legal and factual sufficiency of the evidence, including the
evidence of damages.  Norman Commc’ns, 955 S.W.2d at 270; Regions Bank v. Centerpoint Apartments, 290
S.W.3d 510, 512 (Tex. App.—Amarillo 2009, no pet.).
Here, it is undisputed that Invesco
has satisfied the first three requirements to pursue its restricted
appeal.  The only issue remaining is
whether there is error on the face of the record.  Invesco argues that error appears on the face
of the record because Fidelity presented no evidence regarding the value of
Maloney’s alleged accounts at Invesco and section 276.002 precludes the entry
of a default judgment against a financial institution like itself for a
specific amount of damages in a garnishment proceeding.  In contrast, Fidelity asserts that Invesco’s
“status as a legitimate ‘financial institution’ is not apparent on the face of
the record” and Fidelity “had no duty to prove up the monetary value of
whatever investment products” Invesco held for Maloney.
Generally, if a garnishee fails to
timely file an answer to a writ of garnishment, it is lawful for the trial
court to render judgment against the garnishee for the full amount of the
judgment against the debtor together with all interest and costs that may have
accrued in the main case and also in the garnishment proceedings. Tex. R. Civ. P. 667; Regions Bank, 290 S.W.3d at 513.  The assessment of the full amount of damages
against the defaulting garnishee is premised on a presumption that the
garnishee is indebted to the debtor in an amount sufficient to satisfy the
claim of the garnishor.  Regions Bank, 290 S.W.3d at 513. 
However, in regard to default
judgments entered against financial institutions in the context of garnishment
proceedings, section 276.002 provides,
(a)     Notwithstanding
the Texas Rules of Civil Procedure, if a financial institution fails to timely
file an answer to a writ of garnishment issued before or after a judgment is
rendered in the case, a court may enter a default judgment against the
financial institution solely as to the existence of liability and not as to the
amount of damages.
 
(b)     A
financial institution against which a default judgment is entered under
Subsection (a) is not deemed to have in the financial
institution’s possession or to have knowledge of sufficient debts, assets, or
personal effects of the debtor to satisfy the debtor’s obligations to the
garnishor.
 
(c)      After a default judgment is entered against
a financial institution as to the existence of liability as provided by
Subsection (a), the garnishor has the burden to establish the amount of actual
damages proximately caused to the garnishor by the financial institution’s
default.

 
(d)     The court
may award to the garnishor:
 
(1)     damages
in the amount determined under Subsection (c); and 
 
(2)     for good
cause shown, reasonable attorney’s fees incurred by the garnishor in
establishing damages under Subsection (c). 
 
(e)      Notwithstanding
Section 22.004, Government Code, the supreme court may not amend or adopt rules
in conflict with this section.
 
Tex. Fin.
Code Ann. § 276.002.
In construing a statute, our primary
objective is to ascertain and give effect to the Legislature’s intent as
expressed by the language of the statute.  Galbraith
Eng’g Consultants, Inc. v. Pochucha, 290 S.W.3d 863, 867 (Tex. 2009); City of Rockwall v. Hughes, 246 S.W.3d
621, 625 (Tex. 2008).  We use definitions
prescribed by the Legislature and any technical or particular meaning the words
used in the statute have acquired.  City of Rockwall, 246 S.W.3d at 625
(citing Tex. Gov’t Code Ann. §
311.011(b)). Otherwise, we construe the statute’s words according to their
plain and common meaning, unless a contrary intention is apparent from the
context or such a construction leads to absurd results.  Id.
at 625–26; see also Pochucha, 290 S.W.3d at 867 (“If the
words of a statute are clear and unambiguous, we apply them according to their
plain and common meaning.”).  When a
statute’s language is clear and unambiguous, it is inappropriate to resort to
rules of construction or extrinsic aids to construe the language.  City of
Rockwall, 246 S.W.3d at 626.
Several sections of the Texas Finance
Code provide different definitions for the term “financial institution.”  Texas Finance Code section 276.001 defines “financial
institution” to mean “a bank, savings and loan association, savings bank, or
credit union.”  Tex. Fin. Code Ann. § 276.001(b)(2) (Vernon 2006).  Texas Finance Code section 31.002(25) defines
“financial institution” to mean “a bank, savings association, or savings bank
maintaining an office, branch, or agency office in this state.”  Id.
§ 31.002(25) (Vernon Supp. 2010).  Texas
Finance Code section 201.101(1) defines “financial institution” to include,
among other things, a bank, savings and loan association, federal savings and
loan association, federal savings bank, federal credit union, credit union, or
a trust company.  Id. § 201.101(1) (Vernon 2006).  And Texas Finance Code section 271.001
defines “financial institution” by reference to the definition used in 31
U.S.C. 5312, which includes, among other things, an insured bank, a commercial
bank or trust company, a private banker, an agency or branch of a foreign bank
in the United States, a credit union, a thrift institution, a SEC registered
broker or dealer, a broker or dealer in securities or commodities, an
investment banker or investment company, a currency exchange, or a pawnbroker.[2]  Id.
§ 271.001 (Vernon 2006).  Each of these
sections provides varying, and in some cases potentially conflicting,
definitions of the term “financial institution.”  But, according to the plain language used in
each of these statutes, none of these definitions applies to section 276.002.
Fidelity urges us to apply the
definition of “financial institution” provided in section 276.001 since that is
the section immediately preceding section 276.002, the section at issue in this
case.  But, sections 276.001 and 276.002 are
contained in a subtitle of the Texas Finance Code entitled, “Miscellaneous
Provisions Relating to Financial Institutions and Businesses,” indicating that
these sections have no particular relationship to each other.  See id.
§§ 276.001, 276.002.  This is borne out
by the subject matter of the statutes. 
Section 276.001 bars a financial institution from opening an account in
the name of a candidate for public office without obtaining that candidate’s
consent and signature.  Id. § 276.001(a).  It is, thus, entirely unrelated to the
purpose of section 276.002.  Moreover,
section 276.001 expressly provides that the definition for financial
institution provided therein applies only for that section.  Id.
§ 276.001(b)(2).
In the above-referenced, unrelated sections
of the Texas Finance Code, the Legislature has chosen to specifically define the
term “financial institution” and has provided different definitions depending
on the purpose of the specific statute at issue.  In section 276.002, the Legislature has elected
not to define the term “financial institution.” 
Thus, we will simply apply the ordinary meaning of that term to
determine if Invesco falls within the statute’s scope.  See
Tex. Gov’t Code Ann. § 312.002
(Vernon 2008) (providing that “words shall be given their ordinary meaning” or,
if “a word is connected with and used with reference to a particular trade or
subject matter or is used as a word of art, the word shall have the meaning
given by experts in the particular trade, subject matter, or art”).
“Financial Institution” is defined to
include “[a] business, organization, or other entity that manages money,
credit, or capital, such as a bank, credit union, savings-and-loan association,
securities broker or dealer, pawnbroker, or investment company.”  Black’s
Law Dictionary 706 (9th ed. 2009).  This definition is consistent with section
276.002’s broad reference to a financial institution as an entity that maintains
debts, assets, or personal effects of the debtor.  Tex.
Fin. Code. Ann. § 276.002(b).  Here,
Fidelity sought and obtained a writ of garnishment against Invesco on the basis
that it held investment accounts for Maloney. 
Applying the general definition of the term “financial institution,” we
conclude that the face of the record demonstrates that Invesco, as a holder of
Maloney’s investment accounts, qualifies as a financial institution under
section 276.002.
Section 276.002 expressly provides
that a default judgment may be entered against a financial institution “solely
as to the existence of liability and not as to the amount of damages” and,
after the entry of a default judgment in a garnishment proceeding as to
liability, the garnishor “has the burden to establish the amount of actual
damages proximately caused to the garnishor by the financial institution’s
default.”  Id.; see also Regions Bank,
290 S.W.3d at 514 (concluding that section 276.002 limits trial court’s
authority “to enter default garnishment orders against financial institutions
to a determination of liability and prohibits a determination of
damages”).  Here, the trial court entered
a default judgment against Invesco for the full amount of Fidelity’s underlying
judgment against Maloney without any evidence as to the amount of damages
actually caused by Invesco’s default.
Based upon our review of the face of
the record, we conclude that Fidelity, in contravention of the requirements of
section 276.002, presented no evidence to support the damages portion of the default
judgment entered against Invesco.  See Regions
Bank, 290 S.W.3d at 514–15 (reversing damages portion of default judgment
entered against financial institution after concluding that garnishor presented
no evidence of damages and failed to meet burden imposed by section 276.002).  Accordingly, we hold that the trial court
erred in entering the default judgment against Invesco.
We sustain Invesco’s sole issue.   
 
Conclusion
          We
reverse the default judgment awarding damages to Fidelity and remand for
proceedings consistent with this opinion.[3] 
                                      
 
Terry Jennings
Justice
 
Panel consists of Justices Jennings, Bland,
and Massengale.




[1]               See Tex.
Fin. Code Ann. § 276.002 (Vernon 2006).


[2]           See 31 U.S.C. 5312.


[3]           We deny Fidelity’s motion to dismiss.


