                                   In The
                              Court of Appeals
                     Seventh District of Texas at Amarillo

                                      No. 07-15-00138-CV


            MC PHASE II OWNER, LLC AND TI SHOPPING CENTER, LLC,
            A DELAWARE LIMITED LIABILITY COMPANY, APPELLANTS

                                              V.

                          TI SHOPPING CENTER, LLC,
                A TEXAS LIMITED LIABILITY COMPANY, APPELLEE

                           On Appeal from the 26th District Court
                                 Williamson County, Texas
            Trial Court No. 14-0824-C26, Honorable Donna Gayle King, Presiding

                                  September 28, 2015

                                         OPINION
                   Before CAMPBELL and HANCOCK and PIRTLE, JJ.


       McPhase II Owner, LLC (MCP2) and TI Shopping Center, LLC (TI-DE), both

Delaware limited liability companies, have filed a restricted appeal that challenges the

default judgment granted to TI Shopping Center, LLC (TI-TX), a Texas limited liability

company.    For the reasons hereinafter set forth, we will reverse the judgment and

remand the case to the trial court.
                               Factual and Procedural Background


      The underlying dispute involves a piece of commercial property located in Round

Rock, Williamson County, Texas.            According to the record, TI-TX holds title to the

property by virtue of a special warranty deed. TI-TX’s underlying suit contends that TI-

DE filed a false deed purporting to transfer the property to MCP2. TI-TX filed suit in

Willamson County for trespass to try title, unjust enrichment, and money had and

received. TI-TX’s original petition alleges that both MCP2 and TI-DE are Delaware

limited liability companies who do business in the State of Texas but do not maintain a

registered agent and, therefore, may be served by serving the Texas Secretary of State

(SOS).


      In accordance with its pleadings, TI-TX had the clerk of the court prepare citation

and then delivered two copies of the citation, with petition attached, to the SOS’s office.

The return of service reflects that TI-TX had a process server deliver the citation and

plaintiff’s original petition, and paid the fee on October 2, 2014, for each of the

defendants.


      TI-TX then filed an amended petition and had citation issued to be delivered to

the SOS’s office for service upon TI-DE.1 The return reveals that the amended petition

was served on the SOS on October 30, 2014.


      Neither MCP2 nor TI-DE filed an answer to TI-TX’s suit. On December 5, 2014,

the trial court signed a default judgment in favor of TI-TX which awarded $725,270.40 in




      1
          The record contains no request for service of the amended petition on MCP2.

                                                   2
actual damages, pre-judgment interest of $9,140.39, reasonable attorney’s fees of

$13,052.69, and contingent attorney’s fees for motions for new trial or appeal.


       Writ of execution was issued on January 1, 2015. On March 3, 2015, MCP2 and

TI-DE gave notice of restricted appeal.               On March 13, 2015, TI-TX filed the SOS

certificate of service for the citation on the original petition. That same day, TI-TX filed

the SOS certificate of service for the amended petition.


       In this restricted appeal, MCP2 and TX-DE contend that the trial court’s grant of a

default judgment must be reversed because: TI-TX failed to provide the SOS certificate

prior to the trial court’s granting default judgment, and TI-TX failed to comply with the

applicable long-arm statute by failing to serve or allege service on MCP2 or TI-DE at

their home or home office, and the returns of service are defective and require reversal.


                              Standard of Review and Applicable Law


       To prevail in a restricted appeal, the appealing party must show: (1) it filed notice

of the restricted appeal within six months after the judgment was signed; (2) it was a

party to the underlying lawsuit; (3) it did not participate in the hearing that resulted in the

judgment complained of and did not timely file any post-judgment motions or requests

for findings of fact and conclusions of law; and (4) error is apparent on the face of the

record. See TEX. R. APP. P. 30;2 Ins. Co. of State of Pa. v. Lejeune, 297 S.W.3d 254,

255 (Tex. 2009) (per curiam) (citing Alexander v. Lynda’s Boutique, 134 S.W.3d 845,

848 (Tex. 2004)). When a default judgment is challenged by a restricted appeal, there

are no presumptions in favor of valid issuance, service, and return of citation. See Fid.


       2
           Further citation to the Texas Rules of Appellate Procedure will be by reference to “Rule ____.”

                                                      3
& Guar. Ins. Co. v. Drewery Constr. Co., 186 S.W.3d 571, 573 (Tex. 2006) (per curiam)

(citing Primate Const., Inc. v. Silver, 884 S.W.2d 151, 152 (Tex. 1994)). Such is the rule

because the restricted appeal is addressed directly to the appellate court which does

not take testimony or receive evidence. See id. at 573. Further, at the time the default

judgment was entered, either an appearance by the defendant, proper service of

citation, or a written waiver entered by the defendant must be affirmatively shown in the

record. See Marrot Commc’ns, Inc. v. Town & Country P’ship, 227 S.W.3d 372, 378

(Tex. App.—Houston [1st Dist.] 2007, pet. denied).


                                              Analysis


       Turning our attention to the case before the Court, the parties do not contest that

the first three prongs of the test for a restricted appeal have been met. The contested

issue is whether error is apparent on the face of the record. See Rule 30; Lejeune, 297

S.W.3d at 255.


       MCP2 and TI-DE contend, in their first issue, that the trial court erred in granting

a default judgment because there was no certificate from the SOS or other proof of

service in the record at the time the trial court granted the default. MCP2 and TI-DE’s

contention is founded on the basis of Whitney v. L&L Realty Corp., 500 S.W.2d 94, 96-

97 (Tex. 1973). In Whitney, a landlord had used the long-arm statute to serve citation

for delinquent rents on two former tenants.3 Whitney, 500 S.W.2d at 95. The former

tenants had been residents of Texas when they leased the property from L&L Realty;

however, after breaching the lease, they had both moved out of state. Id. L&L took a

       3
           The long-arm statute then in use was found in Article 2031b of Vernon’s Civil Statutes. See
                  th
Acts of 1959, 56 Leg., R.S., ch. 43, 1959 Tex. Gen. Laws 85. Subsequent references to this provision
will be by reference to the Whitney long-arm statute.

                                                  4
default judgment against the defendants after serving them via the SOS. Id. The Texas

Supreme Court then framed the question as whether the long-arm statute requires not

only service upon the SOS but also a showing in the record that the SOS forwarded the

service to the defendant.       Id. The record in Whitney demonstrated that there was

citation issued and a return showing service on the SOS. Id. at 96. Thus, according to

the court, the question was whether the foregoing was sufficient to confer jurisdiction or

did the record also have to show compliance with the additional statutory requirement

that the SOS forward a copy of the process to the defendant. Id. The Whitney court

ultimately ruled that the record before the trial court must have a certificate from the

SOS that it had forwarded a copy of the citation to the defendant and, without such a

showing, the trial court did not have jurisdiction over the defendant.                Id.   Such a

certificate has become known as a Whitney certificate.


       MCP2 and TI-DE contend that the holding of Whitney is still valid today and,

because the record before the trial court in this matter did not contain the Whitney

certificate from the SOS at the time the default judgment was entered, the trial court did

not have jurisdiction over them to support its entry of a default judgment.


       TI-TX contends that the requirement for a Whitney certificate does not apply to

this case because MCP2 and TI-DE were served by service upon the SOS pursuant to

the Texas Business Organizations Code sections 5.251, 5.252, and 5.253, and not the

long-arm statute found in sections 17.044 and 17.045 of the Texas Civil Practice &

Remedies Code.4        Accordingly, TI-TX contends that the failure to have a Whitney

       4
         The Whitney long-arm statute was supplanted by the sections of the Civil Practice & Remedies
Code referenced above.


                                                 5
certificate in the record before the trial court does not impair the trial court’s jurisdiction

to enter default judgment against MCP2 and TI-DE.


       All parties agree that MCP2 and TI-DE are foreign filing entities, as that term is

defined in the Texas Business Organizations Code. See TEX. BUS. ORGS. CODE ANN. §

1.002(29) (West Supp. 2014).5 Further, there seems to be no dispute that neither entity

maintained a registered agent in Texas.              Therefore, TI-TX could attempt to serve

process on MCP2 and TI-DE by service upon the SOS. See § 5.251(1)(A) (West 2012).

The record reflects that TI-TX had the district clerk of Williamson County issue citation

for both MCP2 and TI-DE on September 4, 2014. The record further shows that TI-TX,

through a process server, served the SOS with duplicate originals of the petition and

request for discovery on October 2, 2014. The return was made that same day and was

a verified return, sworn to before a notary public, dated October 2, 2014. According to

TI-TX’s theory of the case, this was all that was required.


       TI-TX grounds its theory on the proposition that Whitney was a statutory

construction case. The Texas Supreme Court was trying to construe the meaning of the

long-arm statute then in effect. See Whitney, 599 S.W.2d at 96. The court quoted the

applicable statute in part, as follows: “such corporation or natural person may be served

with citation by serving a copy of the process upon the Secretary of State . . ., who shall

be conclusively presumed to be the true and lawful attorney to receive service of

process; provided that the Secretary of State shall forward a copy of such service to the

person in charge of such business or an officer of such company or to such natural


       5
          Further reference to the Texas Business Organizations Code will be by reference to “section
____” or “§ ____.”

                                                 6
person by certified or registered mail, return receipt requested.” Id. After finding the

statute ambiguous, the Texas Supreme Court determined that, in order to confer

personal jurisdiction over a defendant when the defendant was served pursuant to the

statute, the record must reflect that the SOS forwarded a copy of this process to the

defendants’ persons. Id. As TI-TX’s theory goes, since we are dealing with a different

statute that does not have a requirement similar to the Whitney long-arm statute, the

Whitney certificate is not necessary.


      We do not believe that TI-TX’s position is well taken. The Texas Supreme Court

has continually referred to the necessity of a certificate of service from the SOS. See

Wachovia Bank of Del., N.A. v Gilliam, 215 S.W.3d 848, 850 (Tex. 2007). The issue in

Wachovia was the address of the defendant to which that the SOS forwarded the

citation. Id. at 850-51. The court points out that the reason for the requirement of a

certificate of service from the SOS is because, “we have held repeatedly that no

presumptions are made in favor of valid service in a restricted appeal from a default

judgment.” Id. at 850.        Wachovia involved substituted service under a former Texas

Business Corporations Act provision,6 and the question before the court was whether

the record before the trial court proved that the service of process was forwarded to the

correct address. A certificate from the SOS’s office was on file; however, the address to

which service was sent was not the correct address. Id. For that reason, the court

reversed the judgment and remanded the case for further proceedings. Id. at 851.


      In Campus Invs., Inc. v. Cullever, the Texas Supreme Court was again faced with

a default judgment being granted when the defendants had been served by use of the

      6                       th
          See Acts of 1955, 54 Leg., R.S., ch. 64, art. 2.11, 1955 Tex. Gen. Laws 247.

                                                   7
long-arm statute in the Texas Business Corporations Act. See Campus Invs., Inc. v.

Cullever, 144 S.W.3d 464, 465 (Tex. 2004) (per curiam). The issue was that there was

no record of citation or return in the record. Id. There was, however, a certificate from

the SOS stating that it had received and forwarded a copy of the citation. Id. The court

ultimately held that when substituted service on a statutory agent is allowed, the

designee is not an agent for serving, but for receiving process on the defendant’s

behalf.   Id.   Further, the court said that the certificate from the SOS conclusively

establishes that process was served.       Id.   Rule 107 of the Texas Rules of Civil

Procedure prohibits a default judgment until citation and proof of service have been on

file for 10 days. TEX. R. CIV. P. 107(h). The court held that the certificate from the SOS

serves to fulfill the purpose of the Rule. Campus Invs.,144 S.W.3d at 466.


      As applied to the facts of the case before the Court, we find nothing in the record

before the trial court to show that citation was sent to MCP2 or TX-DE. Without the

certificate from the SOS, all we have is a record that shows that citation was delivered

to the SOS’s office with addresses showing where the citation and petition were to be

mailed. Nothing in the record supports the proposition that such citation and petition

were actually mailed. A certificate from the SOS would have provided this information.

Because we are dealing with a default judgment, there are no presumptions of valid

issuance, service, and return of citation of service. See Fid. & Guar. Ins. Co., 186

S.W.3d at 573. The record must affirmatively demonstrate the validity of such service at

the time the trial court entered the default judgment. See Marrot Commc’ns, Inc., 227

S.W.3d at 378. We hold that even when service is made on the SOS under authority of

Texas Business Organizations Code section 5.251-5.253, a trial court does not have


                                            8
personal jurisdiction over the foreign defendant unless a Whitney certificate is part of

the record. At the time the default judgment was entered, the record did not contain a

Whitney certificate.7 See id. Accordingly, we sustain MCP2 and TI-DE’s first issue. We

hold that the trial court did not have personal jurisdiction over MCP2 and TI-DE at the

time it granted the default judgment. Because of our holding, we need not reach the

remaining issues put forth by MCP2 and TI-DE. See Rule 47.1.


                                              Conclusion


       Having determined the trial court was without personal jurisdiction over MCP2

and TI-DE, we reverse the grant of default judgment and remand the case to the trial

court for further proceedings.




                                                                Mackey K. Hancock
                                                                    Justice




       7
            A Whtiney certificate was filed in the record after the trial court had granted the default
judgment.

                                                    9
