Mukesh Bhakta v. Krisu Hospitality, LLC, 07-18-00156-CV

Krisu contracted with M&L Builders (Sept. 22, 2014) to construct a La Quinta Inn; contract signed by Krisu owner Piyuch Patel and M&L President Larry Cole; Bhakta owned/operated M&L but was not a signatory.
Construction was defective, delayed (completed Dec. 21, 2016), and over budget by roughly $1.9M; plaintiff alleged numerous construction defects and lost revenue.
Krisu sued Bhakta and M&L (July 6, 2017) for breach of contract and several tort claims; defendants did not answer; Krisu moved for default judgment and proved damages at a hearing attended only by Krisu.
Trial court entered default judgment awarding large damages (including exemplary damages and lost business income); Krisu later abandoned exemplary damages.
Bhakta filed a restricted appeal asserting, among other things, defective service, insufficiency of evidence for exemplary and lost-income awards, and the economic-loss rule; appellate court reinstated the appeal despite a Krisu bankruptcy suggestion because the stay did not apply to a debtor-plaintiff.
The court reversed and remanded, holding service of process fatally defective (return failed to show whether server was authorized/certified and omitted the certification expiration required by Tex. R. Civ. P. 107).

Issue	Plaintiff's Argument	Defendant's Argument	Held
1. Service of process strict compliance	Krisu: Omission (certification expiration) is a minor/harmless detail; return identifies server	Bhakta: Return fails Rule 107 requirements (no proof server authorized or certification expiration)	Reversed — service fatally defective; strict compliance required
2. Failure to separate exemplary damages between Bhakta and M&L	Krisu: Award proper as entered	Bhakta: Judgment must separately state exemplary awards against each defendant	Pretermitted — not reached due to service defect
3. Sufficiency of evidence for Bhakta's culpable conduct (exemplary damages)	Krisu: Evidence established malicious, fraudulent, or grossly negligent conduct	Bhakta: Record lacks proof of requisite culpability by him personally	Pretermitted — not reached
4. Amount of exemplary damages against Bhakta	Krisu: Amount supported by evidence	Bhakta: Amount is excessive and unsupported	Pretermitted — not reached
5. Award for future lost business income	Krisu: Future lost revenue was proven	Bhakta: Award unsupported by admissible evidence	Pretermitted — not reached
6. Economic-loss rule bars Krisu's tort claims against Bhakta	Krisu: Tort claims are permissible given alleged conduct	Bhakta: Economic-loss rule prohibits tort recovery in a contract dispute where he wasn’t a signatory	Pretermitted — not reached

Wilson v. Dunn, 800 S.W.2d 833 (Tex. 1990) (default judgment void without proper service)
Ins. Co. v. Lejeune, 297 S.W.3d 254 (Tex. 2009) (strict compliance with service rules must affirmatively appear)
Primate Constr., Inc. v. Silver, 884 S.W.2d 151 (Tex. 1994) (strict compliance required for service in default cases)
Uvalde Country Club v. Marin Linen Supply Co., 690 S.W.2d 884 (Tex. 1985) (no presumptions in favor of service in default judgments)
McKanna v. Edgar, 388 S.W.2d 927 (Tex. 1965) (failure to show strict compliance renders service invalid)
Wachovia Bank v. Gilliam, 215 S.W.3d 848 (Tex. 2007) (no presumptions in restricted appeals from default judgments)
Ingersoll-Rand Fin. Corp. v. Miller Mining Co., 817 F.2d 1424 (9th Cir. 1987) (automatic bankruptcy stay applies to actions against the debtor)
Herbert v. Greater Gulf Coast Enters., Inc., 915 S.W.2d 866 (Tex. App.—Houston [1st Dist.] 1995) (minor defects may be harmless in some contexts)
Westcliffe, Inc. v. Bear Creek Constru., 105 S.W.3d 286 (Tex. App.—Dallas 2003) (minor clerical or spelling errors do not necessarily invalidate service)