                        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


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         FROM COUNTY COURT AT LAW NO. 2 OF WICHITA COUNTY

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                       MEMORANDUM OPINION1
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                               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
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      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




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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




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