Wells Fargo Bank, N.A., as Trustee for Securitized Asset Backed Receivables L.L.C. 2005-FR4 Mortgage Pass-Through Certificates Series 2005-FR4 v. Kingman Holdings, L.L.C., as Trustee of the Manderly Place 8118 Land Trust
04-15-00126-CV
| Tex. App. | Mar 6, 2015Background
- Plaintiff Kingman Holdings, L.L.C. sued Wells Fargo Bank, N.A. (as trustee) and Fremont for quiet title and declaratory relief, alleging Wells Fargo held a deed of trust encumbering 8118 Manderly Place, San Antonio, TX.
- Plaintiff obtained a no-answer final default judgment on January 21, 2015, quieting title in plaintiff and voiding liens and deeds of trust.
- Wells Fargo did not file an answer because it contends it was never properly served; plaintiff served process via the Texas Secretary of State with certified mail to a San Francisco address rather than Wells Fargo’s Texas registered agent (Corporation Service Company in Austin).
- Wells Fargo filed a timely Motion for New Trial arguing the default judgment is void for lack of strict compliance with Texas service statutes and that the petition fails to state a claim on which relief can be granted.
- Wells Fargo’s factual support includes Texas Secretary of State and FDIC records showing Wells Fargo’s registration, designated registered agent, and numerous Texas branch locations; Wells Fargo also relies on the recorded deed of trust and assignment referenced in plaintiff’s petition.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of service of process on Wells Fargo | Service through Secretary of State and certified mail to Wells Fargo address was sufficient | Service was defective: Wells Fargo is a foreign financial institution with a Texas-registered agent; plaintiff did not serve that registered agent nor allege reasonable diligence to do so, so substituted service via SOS is improper | Final Default Judgment was entered, but Wells Fargo argues it is void for lack of proper service and seeks a new trial (motion pending) |
| Whether service via Secretary of State was authorized | Plaintiff asserted Wells Fargo "may be served through the secretary of state" | Wells Fargo argues statutes permitting SOS service do not apply because it maintained a registered agent and plaintiff made no attempt to serve that agent; Estates Code exception inapplicable | Court entered default judgment; defendant contends judgment must be vacated because statutory prerequisites for SOS substitution were not met |
| Sufficiency/accuracy of return of service | Return and SOS certificate purportedly show delivery | Wells Fargo contends return misnames or abbreviates defendant and does not affirmatively show service on the entity sued (strict compliance required) | Judgment entered despite contested defects; Wells Fargo argues defects alone defeat default judgment |
| Merits — whether petition states a claim (waiver/quiet-title) | Plaintiff alleges lender/assignee waived rights and deed of trust is extinguished after HOA foreclosure | Wells Fargo argues waiver is an affirmative defense, cannot create affirmative relief; deed of trust contains non-waiver clause; factual allegations do not support extinguishment of lender’s lien | Wells Fargo asks court to vacate judgment independently on failure-to-state-a-claim grounds (motion pending) |
Key Cases Cited
- Wachovia Bank v. Schmidt, 546 U.S. 303 (U.S. 2006) (citizenship of national bank determined by location of main office)
- Wilson v. Dunn, 800 S.W.2d 833 (Tex. 1990) (actual notice without proper service does not supply personal jurisdiction for default judgment)
- Fidelity & Guar. Ins. Co. v. Drewery Constr. Co., Inc., 186 S.W.3d 571 (Tex. 2006) (treating receipt of suit papers by unauthorized procedure as equivalent to never served)
- McKanna v. Edgar, 388 S.W.2d 927 (Tex. 1965) (long-arm / registered-agent principles; secretary of state substitution requires showing agent unavailable)
- Uvalde Country Club v. Martin Linen Supply Co., 690 S.W.2d 884 (Tex. 1985) (failure to show strict compliance with service rules invalidates attempted service)
- Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124 (Tex. 1939) (standards for obtaining new trial after default when defendant was served)