Paramount Credit Inc., D/B/A 5 Star Autoplex v. Kimberly Montgomery
420 S.W.3d 226
| Tex. App. | 2013Background
- Paramount Credit, Inc. d/b/a 5 Star Autoplex appeals a default judgment entered in Montgomery’s favor in Galveston County.
- Montgomery sued Paramount for breach of warranties, breach of contract, negligent misrepresentation, and DTPA violations after purchasing a vehicle with alleged misrepresentations about a warranty.
- Initial service attempted on Paramount’s registered agent at 2724 Crossview #202, Houston, but service failed and the deputy’s return lacked a seal and sufficient detail.
- Montgomery obtained a second citation directing service on Paramount via the Secretary of State; the Secretary of State certified receipt and forwarding of copies to the registered agent.
- Paramount did not answer; default judgment awarded damages, fees, interest, costs, and loan cancellation.
- Tex. appellate court held the default judgment void for lack of personal jurisdiction due to improper service and insufficient record of diligent service attempts; remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was service of process proper to vest personal jurisdiction? | Montgomery contends service complied via substituted service after direct service failed. | Paramount argues service through the Secretary of State and the related certificates were insufficient to show proper service. | Default judgment reversed for improper service; no valid personal jurisdiction. |
| Did the record show reasonable diligence before serving the Secretary of State? | Record shows attempts and certification supported diligence before SOS service. | Record fails to show diligent, proper efforts to locate and serve the registered agent at the designated address. | Record does not affirmatively show reasonable diligence; jurisdiction lacking; judgment reversed. |
Key Cases Cited
- Primate Constr., Inc. v. Silver, 884 S.W.2d 151 (Tex. 1994) (strict compliance required for service in default judgments)
- Barker CATV Constr., Inc. v. Ampro, Inc., 989 S.W.2d 789 (Tex. App.—Houston [1st Dist.] 1999) (no presumptions of valid issuance, service, and return in a default judgment)
- Marrot Commc’ns, Inc. v. Town & Country P’ship, 227 S.W.3d 372 (Tex. App.—Houston [1st Dist.] 2007) (certificate does not prove diligence; SOS service not automatically valid)
- Ingram Indus., Inc. v. U.S. Bolt Mfg., Inc., 121 S.W.3d 31 (Tex. App.—Houston [1st Dist.] 2003) (one attempt may be reasonable diligence if further attempts would be futile)
- Uvalde Country Club v. Martin Linen Supply Co., 690 S.W.2d 884 (Tex. 1985) (omission of part of the registered agent’s name invalidates service)