A plaintiff can't neglect to properly serve the defendant with a lawsuit and then collect a default judgment because the defendant failed to respond, a Texas appeals court ruled recently.
In June, the Southeast Texas Record reported on an appeal filed by PPI Technology Services. The company asked the Texas Ninth District Court of Appeals to dismiss a $20,000 default judgment against it, arguing it was unaware of the litigation filed against it.
Justices agreed with PPI's argument, and on July 30 ruled that a defendant who has not been served with process is entitled to a new trial.
"We hold that the plaintiff failed to establish service of citation on the defendant," wrote Chief Justice Steve McKeithen. "Accordingly, we reverse the default judgment and remand the case to the trial court."
The case began when Production Enhancement Technology filed a suit against Christian Operating Co. in Jefferson County District Court in 2007, alleging it was owed $44,688 for services rendered in September 2006.
According to the suit, Production Enhancement Technology furnished machinery and supplies to Christian Operating for an oil and gas well it was drilling.
But Christian Operating claimed PPI should have been the one to pay, since Production Enhancement was a PPI subcontractor. Christian Operating then filed suit against PPI as a third party defendant.
Court papers show that PPI failed to answer Christian Operating's third party claims.
On Oct. 23, 2008, Judge Bob Wortham of the Jefferson County 58th District Court granted Christian Operating's motion for default judgment, awarding the company $20,000 in actual damages and $9,034 in court costs.
PPI asked the judge for a new trial and was denied, leading the company to file an appeal Jan. 6.
In its appellate brief, PPI argued that Judge Wortham erred in granting the motion because PPI "was not properly served with the lawsuit."
PPI claims that one of the company's receptionists mistakenly signed for the suit and the litigation never made its way to any of the company executives.
PPI is represented in part by attorneys L. Keith Slade and Lucas Andrew Mauro.
Christian Operating is represented in part by attorneys Dax O. Faubusian and R. Beliveaux.
Trial case No. A179-689
Appeals case No. 09-09-00022CV