Orgoo, Inc. v. Rackspace US, Inc.
341 S.W.3d 34
Tex. App.2011Background
- Rackspace US, Inc. provided web-hosting to Orgoo, Inc. under a February 25, 2008 contract; Orgoo stopped paying beginning August 2008.
- Rackspace alleged Orgoo’s site transmitted child sexual abuse material and that Rackspace notified the FBI and suspended services.
- California filed suit against Rackspace Hosting in April 2009; California court later enforced a forum-selection clause directing Texas (Bexar County) as proper forum and dismissed the California suit; Rackspace filed the Texas suit in Bexar County in April 2009; Orgoo then sued Rackspace Hosting in Bexar County in October 2009, with that suit abated.
- On August 6, 2009, the trial court entered a no-answer default judgment in Rackspace’s favor based on Orgoo’s failure to appear.
- Orgoo sought post-judgment relief under Rule 306a (notice/date of judgment) and Rule 4.2(c) (find operative notice date); both motions were denied, prompting this mandamus and restricted-appeal proceeding.
- The court ultimately held the default judgment was rendered without proper service; judgment was reversed and remanded for lack of jurisdiction due to defective service.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether service of process conferred jurisdiction | Orgoo argues service was defective; proper citation/service not shown | Rackspace contends original petition was served via Secretary of State and certified by records | Service defective; trial court lacked jurisdiction |
| Whether the Secretary of State certificate proves proper service | Certificate shows proper forwarding of service; addresses may be incorrect | Certificate is conclusive proof of forwarded service | Certificate alone did not establish strict compliance; record shows misaddress and failure to notify; service invalid |
| Whether restricted appeal or Craddock analysis applies given defective service | If proper service failed, Craddock elements unnecessary; restricted appeal may apply | Service issues preclude recovery; no jurisdiction to review | Regardless of method, lack of valid service means trial court had no jurisdiction; judgment reversed |
| Whether the record supports finding of conscious indifference by Orgoo | Not directly relevant under defective service; no evidence of deliberate evasion | Orgoo evaded service by maintaining an outdated address | Record shows no intentional nonappearance; defective service undermines jurisdiction |
Key Cases Cited
- Hubicki v. Festina, 226 S.W.3d 405 (Tex. 2007) (default judgments require rigid enforcement of service rules on review)
- Campus Inv., Inc. v. Cullever, 144 S.W.3d 464 (Tex. 2004) (certificate by Secretary is prima facie proof of receipt/forwarding; defective citation affects notice and judgment)
- G.M.R. Gymnastics Sales, Inc. v. Walz, 117 S.W.3d 57 (Tex. App.-Fort Worth 2003) (address issues and notice relevance under long-arm service; updated addresses matter)
- Primate Constr., Inc. v. Silver, 884 S.W.2d 151 (Tex. 1994) (presumption in restricted appeals requires strict compliance with service records)
- Wilson v. Dunn, 800 S.W.2d 833 (Tex. 1990) (jurisdiction based on proper citation and service; actual notice not sufficient to cure defective service)