Suit against securities dealer

Texas Case Law

HARVESTONS v. NARNIA, 14-05-00206-CV (Tex.App. [14th Dist.]
1-11-2007) HARVESTONS SECURITIES, INC., Appellant v. NARNIA
INVESTMENTS, LTD., Appellee. No. 14-05-00206-CV. Court of
Appeals of Texas, Fourteenth District, Houston. Opinions
Issued October 31, 2006. Opinions filed January 11, 2007.

Appeal from the 270th Judicial District, Harris County,
Texas, Trial Court Cause No. 00-39672-A.

Panel consists of Justices ANDERSON, EDELMAN, and FROST
(EDELMAN, J., dissenting) (FROST, J., majority).

KEM THOMPSON FROST, Justice.

SUBSTITUTE MAJORITY OPINION[fn1]

Appellant Harvestons Securities, Inc., defendant in the
trial court, brings this restricted appeal of a default
judgment rendered against it and in favor of appellee
Narnia Investments, Ltd., the plaintiff in the trial court.
In three issues, Harvestons contends that service of
process was defective and therefore the trial court erred in
rendering the default judgment. We reverse and remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

Narnia Investments filed suit against several defendants,
including Harvestons.[fn2] Narnia’s petition stated:

Harveston Securities, Inc. is a securities dealer
registered with the Securities and Exchange Commission,
the National Association of Securities Dealers, Inc. and
the State of Texas (and as such, may be served with
process by serving the Texas Securities Commissioner at
200 E. 10th Street, 5th Floor, Austin, Texas
78701).[fn3]

The district clerk issued citation directed to Harveston
Securities Inc. by serving the Texas Securities
Commissioner[,] 200 E 10th Street[,] 5th Floor Austin[,]
Texas 78701.” The return of service indicates that the
citation was served on September 7, 2000, at A200 E. 10th,
Austin, Tx. 78701 in Travis County . . . by delivering to
Harveston Securities, by serving the Texas Securities
Commissioner, by delivering to Jo Ann Kocerek defendant, in
person, a true copy of this Citation together with the
accompanying copy(ies) of the Petition attached thereto.”

Harvestons did not file an answer or otherwise appear in
the case, and Narnia moved for default judgment. The trial
court granted an interlocutory default judgment in favor of
Narnia and against Harvestons for $365,000, plus attorney’s
fees, prejudgment interest, and post-judgment interest. Two
months later, the trial court severed the interlocutory
default judgment against Harvestons from the remaining
claims against the other defendants. The trial court then
rendered a final default judgment against Harvestons
awarding the same relief as in the interlocutory judgment.

Five months after this final judgment, Harvestons filed an
unsworn motion for new trial claiming it had no actual
knowledge of the pending litigation before November 15,
2004. Harvestons sought to have the default judgment set
aside. The trial court lacked plenary power over
Harvestons’s untimely motion and denied it. Harvestons then
filed a timely restricted appeal.

II. ISSUES PRESENTED

Harvestons asserts three similar issues on appeal, all of
which are premised on Harvestons’s contention that the
citation, service, and the return of service do not comply
with Texas Rules of Civil Procedure 16, 99, 106, and 107.
More specifically, Harvestons asserts that service of
process was invalid because:

(1) The return of service shows that process was
delivered to someone other than the one named in the
citation. The person named in the citation was the Texas
Securities Commissioner, and the return of service states
that process was delivered to Jo Ann Kocerek.”

(2) The citation and the return of service do not show
that the person served Jo Ann KocerekChad the authority to
accept process on behalf of Harvestons or the Texas
Securities Commissioner.

(3) The return of service does not show a valid manner of
service.

III. STANDARD OF REVIEW

Harvestons may file a restricted appeal if (1) it filed
notice of restricted appeal within six months of judgment,
(2) it was a party to the underlying suit, (3) it did not
participate in the hearing resulting in the judgment on
appeal and did not file timely post-judgment motions or
requests for findings of fact and conclusions of law, and
(4) it shows error apparent on the face of the record.
Alexander v. Lynda’s Boutique, 134 S.W.3d 845, 848 (Tex.
2004). The scope of a restricted appeal (formerly writ of
error) is limited to error on the face of the record. See
Norman Communications v. Texas Eastman, 955 S.W.2d 269, 270
(Tex. 1997) (per curiam). Notably, in restricted appeals,
A[t]here are no presumptions in favor of valid issuance,
service, and return of citation.” Fidelity & Guar. Ins. Co.
v. Drewery Const. Co., 186 S.W.3d 571, 573B74 (Tex. 2006);
Primate Const., Inc. v. Silver, 884 S.W.2d 151, 152 (Tex.
1994). This last rule must be strictly observed because
presumptions can neither be confirmed nor rebutted by
evidence in an appellate court. Fidelity & Guar. Ins. Co.,
186 S.W.3d at 573. Thus, for example, if the citation says
an amended petition was attached (which named the defaulted
party) and the return says the document served was the
original petition (which did not name the defaulted party),
an appellate court cannot tell from the record which is
true. Id. Similarly, if the petition says the registered
agent for service is Henry Bunting, Jr.” but the citation
and return reflect service on Henry Bunting,” an appellate
court cannot tell whether the two names mean the same or
different persons. See Uvalde Country Club v. Martin Linen
Supply Co., 690 S.W.2d 884, 885 (Tex. 1985). Recognition of
this lack of legal presumptions in favor of valid issuance,
service, and return of citation is critical to proper
resolution of this restricted appeal.

IV. ANALYSIS

In its second issue, Harvestons contends that service of
process was defective because the return did not show that
the person served Jo Ann Kocerek Chad the authority to accept
process on behalf of Harvestons or the Texas Securities
Commissioner.[fn4] In response, Narnia contends that
service was perfected because the record reflects that
service was made on the Texas Securities Commissioner, who
thereafter properly forwarded process to Harvestons. In
support of this argument, Narnia relies primarily on the
Capitol Brick line of cases. See, e.g., Capitol Brick, Inc.
v. Fleming Mfg. Co., 722 S.W.2d 399, 401 (Tex. 1986).
Before reaching the issue of whether the return demonstrates
that Jo Ann Kocerek had the authority to accept process on
behalf of Harvestons or the Texas Securities Commissioner,
we address Narnia’s argument that, under the Capitol Brick
line of cases, service was proper in this case.

The Capitol Brick line of cases is based on a statute
providing that all certificates issued by the Secretary of
State (hereinafter Secretary”) in accordance with the
Texas Business Corporation Act shall be taken and received
in all courts as prima facie evidence of the facts therein
stated. See TEX. BUS. CORP. ACT art. 9.05 (Vernon 2003);
Campus Invs., Inc. v. Cullever, 144 S.W.3d 464, 465 (Tex.
2004) (relying on article 9.05 in Capitol Brick analysis
and agreeing with analysis in G.F.S. Ventures, Inc. v.
Harris); G.F.S. Ventures, Inc. v. Harris, 934 S.W.2d 813,
818 (Tex.App.Houston [1st Dist.] 1996, no writ) (relying
on article 9.05 in Capitol Brick analysis). Under its
unambiguous language, article 9.05 of the Texas Business
Corporation Act does not apply to certificates issued by
the Texas Securities Commissioner (hereinafter
Commissioner”). See TEX. BUS. CORP. ACT art. 9.05.
Although Narnia asserts that the Capitol Brick line of cases
should apply, Narnia does not identify any case applying
this line of cases to certificates issued by the
Commissioner or to service on the Commissioner, and our
independent research has not revealed any such case.
Therefore, this issue appears to be one of first impression.

A. Should the Capitol Brick line of cases be extended so as
to apply to certificates from the Texas Securities
Commissioner?

Article 581B30 of the Texas Securities Act is the only part
of that statute that is arguably similar to article 9.05 of
the Texas Business Corporation Act. See TEX. REV. CIV.
STAT. ANN. art. 581B30 (Vernon Supp. 2005) (stating, in
pertinent part, that A[c]opies of all papers, instruments,
or documents filed in the office of the Commissioner,
certified by the Commissioner, shall be admitted to be read
in evidence in all courts of law and elsewhere in this
state in all cases where the original would be admitted in
evidence”). Whereas article 9.05 states that facts stated
in certificates of the Secretary are received in all courts
as prima facie evidence, the Texas Securities Act states
only that copies of documents filed with the Commissioner
shall be admitted into evidence in place of the originals,
if the copies are certified by the Commissioner and if the
originals otherwise would be admissible. Compare TEX. BUS.
CORP. ACT art. 9.05 with TEX. REV. CIV. STAT. ANN. art.
581B30. Allowing the admission of copies certified by the
Commissioner if the originals would be admissible is very
different from accepting as true the factual statements
stated within the Secretary’s certificate.[fn5]

The Capitol Brick line of cases is not grounded simply on
the presence of a certificate from a government official;
rather, cases in this line also are based on the following
premises:

(1) The Secretary has stated in a certificate that a
citation and petition in the case were served on the
Secretary in accordance with the Business Corporations
Act; and

(2) Article 9.05 requires Texas courts to receive such
certificates as prima facie evidence of the facts stated
therein.[fn6]

See Cullever, 144 S.W.3d at 465B66 (relying on certificate
from Secretary stating Secretary had been served with
citation and petition and forwarded them to defendant by
certified mail); Capitol Brick, Inc., 722 S.W.2d at 400B01
(same); G.F.S. Ventures, Inc., 934 S.W.2d at 818 (same);
Vanguard Invs. v. Fireplaceman, Inc., 641 S.W.2d 655, 656
(Tex.App.Houston [14th Dist.] 1982, writ ref’d n.r.e.)
(same). Significantly, the two certificates of the
Commissioner in this case contain neither of these
predicates. Both state in pertinent part as follows:

I, DENISE VOIGT CRAWFORD, Securities Commissioner of the
State of Texas, do hereby certify that I have caused to be
made a careful examination of the records of the State
Securities Board, which records are kept under my
supervision and control under the provisions of [the Texas
Securities Act] and from such examination, I do further
certify that the attached [number of attached pages]
pages constitute a true and correct record of
information filed with the Securities Commissioner.

Unlike the certificates issued from the Secretary of State,
these two certificates do not state: (1) that the
Commissioner received or was served with a citation or
petition in any case or (2) that the attached documents
accurately reflect the actions or events stated or
indicated therein. Because the certificates in question do
not state that a citation and petition in the case were
served on the Commissioner, the Capitol Brick line of cases
does not apply.[fn7] See Cullever, 144 S.W.3d at 465B66;
Capitol Brick, Inc., 722 S.W.2d at 400B01; G.F.S. Ventures,
Inc., 934 S.W.2d at 818; Vanguard Investments, 641 S.W.2d
at 656. Although the Commissioner may very well have been
served with process as Harvestons’s agent and may have
forwarded the citation and petition on to Harvestons, a
letter from the Commissioner is not a proper substitute for
a return of service showing strict compliance with the
rules for service.

Furthermore, the Commissioner’s certificates do not state
that the one-page letter contained in her files accurately
reflects the actions or events stated or indicated in the
letter.[fn8] Although the letter does refer to the cause
number in the unsevered case in the trial court, the letter
does not state the Secretary has been served as
Harvestons’s agent for service of process. It is addressed
to Harvestons and indicates it was sent by regular and
certified mail. The body of this letter states in its
entirety:

The Securities Commissioner has received process in the
above-referenced lawsuit. Since Harveston Securities, Inc.
[sic] is named as a defendant, we are forwarding process
to you.

Though the letter states that the petition names Harvestons
as a defendant, the letter does not state that the
Commissioner received citation addressed to
Harvestons.[fn9] The documents attached to the certificates
in question do not reflect a copy of any enclosure that may
have accompanied the letter. Nor do these documents reflect
that Harvestons received any letter from the
Commissioner.[fn10]

Texas courts strictly enforce compliance with
service-of-process statutes. See Whitney v. L&L Realty
Corp., 500 S.W.2d 94, 97 (Tex. 1973) (reversing a default
judgment because the record included proof of service on
the Secretary, but not a certificate that the Secretary had
forwarded process to the defendant); World Distributors,
Inc. v. Knox, 968 S.W.2d 474, 478 (Tex.App.CEl Paso 1998,
no pet.) (finding service defective under section 17.045
where nothing in the record affirmatively established that
the address provided to the Secretary was the home office
of the defendants). Substantial compliance will not
suffice. Thus, even presuming that Harvestons had actual
knowledge of Narnia’s lawsuit, it still would not be proper
to affirm the default judgment on this basis.[fn11] See
North Carolina Mut. Life Ins. Co. v. Whitworth, 124 S.W.3d
714, 721 (Tex.App.Austin 2003, pet. denied) (concluding
that despite the indications in the record that appellant
eventually received a copy of the citation and petition, the
service of citation did not strictly comply with the rules
of procedure and therefore the default judgment cannot
stand).

The strict-compliance requirements in the default
judgment context preclude courts from making even the most
obvious and rational inferences. See, e.g., Verlander
Enter., Inc. v. Graham, 932 S.W.2d 259, 262 (Tex.App.CEl
Paso 1996, no writ) (holding that a notation of Jim Gore”
rather than A[corporation] through its vice president,
Jim Gore” on return did not establish that person served
was in fact corporation’s agent for service of process,
nor did it establish that corporation was served, and thus
return was insufficient to convey jurisdiction over
corporation upon trial court). The certificates in
question and the documents attached thereto are not the
legal equivalent of either a proper return of service or
the Secretary’s statements in a certificate showing proper
service of the citation and petition under the applicable
statute.[fn12] Therefore, we decline to extend the
Capitol Brick line of cases to the certificates in this
case. See TEX. R. CIV. P. 107; North Carolina Mut. Life
Ins. Co., 124 S.W.3d at 721. Because this line of cases
does not apply, our record must reflect strict
compliance with the rules for issuance of citation,
service, and return of service.

B. Does the record reflect that the return of service for
process vested the trial court with jurisdiction to render
the default judgment?

A default judgment cannot withstand a direct attack by a
defendant who shows that it was not served in strict
compliance with the rules governing service of process.
Primate Constr., Inc., 884 S.W.2d at 152. In contrast to
the usual rule that all presumptions will be made in
support of a judgment, in a restricted appeal there are no
presumptions of valid issuance, service, or return of
citation when examining the default judgment. See Id.;
Massachusetts Newton Buying Corp. v. Huber, 788 S.W.2d 100,
101 (Tex.App.Houston [14th Dist.] 1990, no writ). In the
absence of an appearance by the defendant in question,
there must be an affirmative showing of due service of
process, independent of the recitations in the default
judgment. Huber, 788 S.W.2d 100, 101.

The recitations in the return of citation are prima facie
evidence of the facts recited in the return. Primate
Constr., Inc., 884 S.W.2d at 152. The recitations in the
return of citation carry enough weight that they cannot be
rebutted by the uncorroborated proof of the moving party.
Id. Further, a return of citation does not cease to be prima
facie evidence of the facts of service simply because the
facts are recited in a form rather than filled in by the
process server. Id. It is the responsibility of the party
requesting service, not the process server, to see that
service is properly accomplished. See id. This
responsibility extends to seeing that the service is
adequately reflected in the record. Id. If proper service
is not affirmatively shown in the record, then error exists
on the face of the record and a default judgment cannot
stand. Id.

Texas Rule of Civil Procedure 107, which governs the return
of citation, reads in pertinent part:

The return of the officer or authorized person executing
the citation shall be endorsed on or attached to the same;
it shall state when the citation was served and the manner
of service and be signed by the officer officially or by
the authorized person.

TEX. R. CIV. P. 107. The return of citation is not a trivial
or merely formalistic document. See Primate Constr., Inc.,
884 S.W.2d at 152. If any of these requirements are not
met, the return of citation is fatally defective and will
not support a default judgment under direct attack. See
McGraw Hill, Inc. v. Futrell, 823 S.W.2d 414, 416
(Tex.App.Houston [1st Dist.] 1992, writ denied).

In this case, the return of service indicates that the
citation was executed on September 7, 2000, at A200 E.
10th, Austin, Texas 78701 in Travis County . . . by
delivering to Harvestons Securities, by serving the Texas
Securities Commissioner, by delivering to Jo Ann Kocerek,
defendant, in person, a true copy of this citation together
with the accompanying copy of the petition attached
thereto.” (emphasis added). Harvestons contends that the
return of service is defective because there is no showing
in the record that Jo Ann Kocerek is authorized to accept
service on behalf of it or the Texas Securities
Commissioner.

The face of the record does not identify Jo Ann Kocerek or
her status or affiliation, if any, with the Texas
Securities Commissioner. Neither the return nor any other
portion of the record designates Jo Ann Kocerek as an
authorized representative of the Commission or indicates
that she has the authority to receive service on behalf of
Harvestons or the Commissioner. Indeed, it is simply not
possible to determine from the record who Jo Ann Kocerek is
or whether she is an agent authorized to accept service on
behalf of either the Commissioner or Harvestons. Without an
indication on the face of the record of her capacity or
authority, if any, to receive service, the granting of the
default judgment was improper. Compare Reed Elsevier, Inc.
v. Carrollton Farmers Branch Indep. Sch. Dist., 180 S.W.3d
903, 905 (Tex.App.Dallas 2005, pet. denied) (concluding
that return of service was defective because it did not
indicate the capacity of ADanielle Smith” or why she was
served with process); and Benefit Planners L.L.P. v.
RenCare, Ltd., 81 S.W.3d 855, 861 (Tex.App.San Antonio
2002, pet. denied) (holding that service was defective
because the return did not recite that the citation was
delivered to ABenefit Planners through its registered
agent.”); Barker CATV Constr., Inc. v. Ampro, Inc., 989
S.W.2d 789, 793 (Tex.App.Houston [1st Dist.] 1999, no
pet.) (holding that the return showing service on AJames
Barker” does not establish that he was defendant’s agent or
that Barker CATV Construction, Inc. was served); and Galan
Enter. v. G. Wil-Tex Co., Inc., No. 01-92-01246-CV, 1993 WL
471403, at * 1B2 (Tex.App.Houston [14th Dist.], Nov. 18,
1993, no pet.) (concluding that return of service was
invalid because party failed to establish that Barbara
Galan was in fact a person authorized to accept service)
(not designated for publication); with Pleasant Homes Inc.
v. Allied Bank of Dallas, 776 S.W.2d 153, 154 (Tex. 1989)
(holding that the return of service was sufficient where
the return’s reference to a AV.P.” was deemed prima facie
evidence of the person’s identity). Harvestons has
established error on the face of the record. Service of
process was defective. Therefore, the trial court erred in
granting a default judgment against Harvestons.
Accordingly, we sustain Harvestons’s second issue.[fn13]

We reverse the trial court’s default judgment and remand
this case for further proceedings consistent with this
opinion.

Panel consists of Justices Anderson, Edelman, and Frost.
(Edelman, J., dissenting).

[fn1] We overrule appellee’s motion for rehearing. The
majority opinion of October 31, 2006 is withdrawn, and this
Substitute Majority Opinion is issued in its place.

[fn2] Jon Ginder is also named as a plaintiff asserting
claims against Harvestons. Ginder, however, did not move
for or obtain a default judgment against Harvestons, and
Ginder’s claims, if any, were not severed from the main
action by the trial court’s subsequent severance order.

[fn3] The petition, citation, and return of service all use
the name AHarveston Securities, Inc.” However, the document
appointing the Commissioner as Harvestons’s agent for
service of process as well as the default judgment use the
name Harvestons Securities, Inc.”

[fn4] We address Harvestons’s second issue first because if
this issue is resolved in Harvestons’s favor, it wil be
dispositive of the entire appeal.

[fn5] The dissent states that it would not be logical for
the Secretary’s certificate to carry more weight than that
of the Commissioner. See post at 4, n. 6. However, we look
to the plain meaning of the respective statutes, and we
note the differences in the statutory language. Our
function is not to question whether there is a sound basis
for the differences in the respective statutes but to apply
them as written. See Nat’l Liab. & Fire Ins. Co. v. Allen,
15 S.W.3d 525, 527 (Tex. 2000); Lee v. City of Houston, 807
S.W.2d 290, 293 (Tex. 1991).

[fn6] Such a certificate from the Secretary is known as a
AWhitney certificate” based on the name of the case in
which the Texas Supreme Court first held such a certificate
necessary. See Whitney v. L&L Realty Corp., 500 S.W.2d 94,
96 (Tex. 1973); Wright Bros. Energy, Inc. v. Krough, 67
S.W.3d 271, 273, n. 1 (Tex.App.CHouston [1st Dist.] 2001,
no pet.).

[fn7] At present, whenever the Commissioner is served with
process as agent for dealers such as Harvestons, the Texas
Securities Act states that the Commissioner must forward
the process received by mail to the dealer’s last known
address. See TEX. REV. CIV. STAT. ANN. art. 581B8 (Vernon
Supp. 2006). Until September 1, 2001, it appears that the
Texas Securities Act did not expressly require the
Secretary to forward any process that had been served upon
the Secretary as agent for dealers such as Harvestons. See
Texas Securities Act, 55th Leg., R.S., ch. 269, _ 16, 1957
Tex. Gen. Laws 575, 593, repealed by Act of May 27, 2001,
77th Leg., R.S., ch. 1091, _ 2.24, 2001 Tex. Gen. Laws 2399,
2419 (current version at TEX. REV. CIV. STAT. ANN. art.
581B8 (Vernon Supp. 2006)). The absence of such language
from the Texas Securities Act when Jo Ann Kocerek was served
in September 2000, does not affect our analysis of whether
the Capitol Brick line of cases should be extended to
certificates from the Commissioner.

[fn8] In its motion for rehearing, Narnia argues that the
Commissioner’s certificates are public records under Texas
Rule of Evidence 803(8) as well as proper evidence of the
contents of the Commissioner’s files under Texas Rule of
Evidence 901(b)(7). However, even if these arguments are
correct, that does not alter the reality that the
Commissioner’s certificates themselves do not address
whether the Commissioner received or was served with a
citation or petition in any case. Even presuming the
two-sentence letter attached to one of the certificates is
identical to a document contained in the Commissioner’s
files, this only proves that such a document exists in the
Commissioner’s files. It is not the equivalent of the
Commissioner certifying that she has been served with
process in this case as Harveston’s agent for service of
process.

[fn9] In its motion for rehearing on appeal, Narnia asserts
for the first time that, in the letter, the Commissioner
Aadmitted that she had received process pursuant to
Harvestons[‘] power of attorney.” However, the
Commissioner’s letter does not make this statement.

[fn10] In its motion for rehearing in this court, Narnia
argues for the first time that the Commissioner’s two
certificates and the documents attached thereto A[t]aken
together . . . qualify as a party’s admission under [Texas]
Rule [of Evidence] 801(e)(2)(D).” Narnia cites no cases
holding that statements by an agent for service of process
in a letter are admissions binding on the principal. In any
event, the assertion that the Commissioner’s letter
contains admissions does not address the content of the
Commissioner’s statements in the letter and whether this
letter should be considered as a substitute for a return of
service under the Capitol Brick line of cases.

[fn11] Narnia refers to evidence attached to its response
to Harvestons’s untimely motion for new trial. This
evidence contradicted an affidavit attached to Harvestons’s
motion. However, on a restricted appeal, we cannot consider
this evidence because it was not before the trial court
when the trial court rendered the default judgment. See
Alexander, 134 S.W.3d at 848B49.

[fn12] On rehearing, Narnia asserts case is very similar to
Interconex, Inc. v. Ugarov, No. 01-05-00524-CV,
S.W.3d, 2006 WL 2506562, at *10B13
(Tex.App.Houston [1st Dist.] Aug. 31, 2006, no pet. h.).
We disagree. The Interconex court held that the trial court
did not abuse its discretion in denying appellant’s motion
to set aside a default judgment because there was
sufficient evidence that appellant’s failure to answer was
not the result of an accident or mistake. See id. In
Interconex, the defendant’s agent for service of process
testified there was Ano doubt” that his signature was on the
citation; yet he also contended that he had not been served
with process. See id. at *11B12. He also testified that he
forwarded all process that he received as Interconex’s
agent to Interconex’s president and its attorney. See id.
The Interconex case did not involve a restricted appeal or
any issue regarding the validity or sufficiency of the
service of process or the return of citation. See id. at
*10B13. Nor did the Interconex case involve the application
of the Capitol Brick line of cases. See id.

[fn13] Because we sustain Harvestons’s second issue, it is
not necessary for this court to reach Harvestons’s other
appellate issues, all of which are related to defective
service of process.

RICHARD H. EDELMAN, Justice.

SUBSTITUTE DISSENTING OPINION

The dissenting opinion issued in this case on October 31,
2006 is withdrawn, and the following substitute dissenting
opinion is issued in its place.

A default judgment can be upheld only if, among other
things, the record affirmatively shows strict compliance
with the rules for service of citation. Primate Constr.,
Inc. v. Silver, 884 S.W.2d 151, 151 (Tex. 1994). Although a
proper return of service can often be prima facie proof of
such compliance, there are instances in which it is not
sufficient to do so and therefore irrelevant to the issue.

One example of this is where the Secretary of State is
deemed to be a defendant corporation’s agent for service of
process under article 2.11(B) of the Business Corporation
Act (ABCA@).[fn1] Upon being served with process pursuant
to this provision, the Secretary of State is required to
immediately forward a copy by registered mail to the
corporation at its registered office address.[fn2] However,
to obtain a default judgment after such service, it is not
sufficient for the record to merely show proper service of
citation on the Secretary of State. Whitney v. L & L Realty
Corp., 500 S.W.2d 94, 96 (Tex. 1973). Instead, the record
must show that the Secretary of State received and
forwarded a copy of the process to the defendant in
accordance with the statute. Id. This requirement can be
conclusively satisfied with a certificate from the
Secretary of State indicating that he received and forwarded
a copy of the citation and petition to the defendant in the
manner prescribed. Campus Invs., Inc. v. Cullever, 144
S.W.3d 464, 465B66 (Tex. 2004).[fn3] A default judgment
issued after such service will be upheld even if the record
affirmatively shows that the process forwarded by the
Secretary of State was returned undelivered and was
therefore never received by the defendant. Id. In addition,
where the record reflects such receipt and forwarding by
the Secretary of State, it dispenses with any requirement
that the default judgment record even include the citation
and return. Id.

In recognizing that a certificate from the Secretary of
State is a sufficient form of evidence to reflect the
required information, the opinion in Campus Investments
cited the following provision:

All certificates issued by the Secretary of State in
accordance with the provisions of this [Business
Corporation] Act, and all copies of documents filed in his
office in accordance with the provisions of this Act, when
certified by him, shall be taken and received in all
courts, public offices, and official bodies as prima
facie evidence of the facts therein stated. . . .

Id. at 465 (citing TEX. BUS. CORP. ACT ANN. art. 9.05(A)
(Vernon 2003) (emphasis added)). Therefore, although a
certificate was used in that case, it logically follows
from the language of article 9.05(B) that a certified copy
of another document, containing the necessary information
and filed with the Secretary of State, would have also been
sufficient.

In this case, as a securities dealer registered in the
State of Texas, Harvestons was required to, and did, file
an irrevocable power-of-attorney, appointing the Securities
Commissioner its attorney-in-fact upon whom service of
process could be served and further stating:[fn4]

that any and all lawful processes against it which may be
served upon its said attorney-in-fact shall be deemed
valid personal service upon said corporation, and that
all process served upon the said Securities Commissioner
shall be and have the same effect as if such corporation
were organized and created under the laws of the State of
Texas, and had been lawfully served with process therein.

See Texas Securities Act, 55th Leg., R.S., ch. 269,_16,
1957 Tex. Gen. Laws 575, 593, repealed by Act of June 15,
2001, 77th Leg., R.S., ch. 1091,_2.24, 2001 Tex. Gen. Laws
2399, 2419 (current version at TEX. REV. CIV. STAT. ANN.
art. 581B8 (Vernon Supp. 2006-2007)).[fn5] Like article
2.11(B) of the BCA, the Securities Act requires the
Securities Commissioner, when served with such process, to
forward it by United States (not certified) mail to the
last known address of the dealer. TEX. REV. CIV. STAT. ANN.
art. 581B8 (Vernon Supp. 2006-2007). In addition, like
article 9.05(A) of the BCA, the Securities Act provides:

Copies of all papers, instruments, or documents filed in
the office of the Commissioner, certified by the
Commissioner, shall be admitted to be read in evidence in
all courts of law and elsewhere in this state in all cases
where the original would be admitted in evidence.

Id. art. 581B30 (Vernon Supp. 2006-2007). However, unlike
article 9.05(A), article 581B30 of the Securities Act makes
no specific reference to issuance of a certificate.[fn6]

As evidence of compliance with the requirements for service
of process, the default judgment record in this case
contains a certified copy of a letter (the Aletter@) from
the Securities Commissioner to Harvestons. This letter
references the style and case number of this case in the
trial court and states: The Securities Commissioner has
received process in the above-referenced lawsuit. Since
HARVESTON SECURITIES, INC. [sic] is named as a defendant,
we are forwarding process to you.@ The letter thus reflects
that service of process was received by the Commissioner
and forwarded to Harvestons in accordance with article
581-8[fn7] and is sufficient evidence of these facts under
article 581B30. Because the default judgment record thereby
reflects compliance with the rules for service of process
that apply in this case, the sufficiency of the return of
citation showing service on the Commissioner is immaterial.
Accordingly, I would not reverse the judgment of the trial
court for a defective showing of service of process.

[fn1] See TEX. BUS. CORP. ACT ANN. art. 2.11(B) (Vernon
Supp. 2006) (Whenever a corporation shall fail to appoint
or maintain a registered agent in this State, or whenever
its registered agent cannot with reasonable diligence be
found at the registered office, then the Secretary of State
shall be an agent of such corporation upon whom any such
process, notice, or demand may be served.@).

[fn2] Id. (In the event any such process, notice, or demand
is served on the Secretary of State, he shall immediately
cause one of the copies thereof to be forwarded by
registered mail, addressed to the corporation at its
registered office.@).

[fn3] Although article 2.11 requires the Secretary of State
to forward the process to the corporation at its registered
office, the opinion in Campus Investments does not indicate
that the certificate in that case recited that the address
to which process had been sent was the defendant’s
registered address or that recitation of that fact was
required. 144 S.W.3d at 465B66. If compliance with the rules
for service of process is shown by the record, a defendant
can overturn a default judgment by developing evidence in a
motion for new trial or bill of review of either a lack of
receipt of service or the Craddock elements. See Fid. &
Guar. Ins. Co. v. Drewery Constr. Co., 186 S.W.3d 571,
573B74 (Tex. 2006).

[fn4] A certified copy of this power-of-attorney was
included in the default judgment record.

[fn5] Although not material to the disposition, this suit
was filed in 2000, before former article 581B16 was
repealed.

[fn6] Although article 9.05(A) also uses the term,
Aevidence@ rather than Aprima facie evidence,@ it is not
apparent how facts stated in a document can be admissible
evidence of those facts without also being prima facie
evidence thereof, such that this difference in phrasing
would indicate a difference in effect. Nor is it logical
that certified copies of documents from the Secretary of
State’s office would somehow have any greater evidentiary
value than those from the Securities Commissioner’s office.

[fn7] Although not required by article 581B8, this letter
was sent by certified mail.