BEAUMONT– The case of a military veteran who sued a collection agency over negative dings to his credit for a 2010 cellphone contract he alleges was canceled when he was deployed is on its way back to a Montgomery County court following a state appeals court ruling earlier this month.
Montgomery County Court at Law No. 2 erred in October 2015 when ruled in favor of the veteran, Andrew James Stevens, and against Rhojo Enterprises, doing business as Orion Recovery, according to memorandum opinion handed down Feb. 1 by the 9th District Court of Appeals at Beaumont.
"Accordingly, we conclude that the trial court's rendition of default judgment against Orion when there was an answer on file constitutes error apparent on the face of the record," appeals court Justice Charles Kreger said in the 10-page opinion he wrote for the court. "We reverse the judgment and remand this cause to the trial court for further proceedings."
The appeals court was not impressed by Stevens' "only argument" to Orion's appeal, that the collection agency, as a corporation, committed an "unauthorized practice of law" when it filed an individual motion, the opinion said.
"We find this argument unpersuasive," the opinion said.
Orion, in its restricted appeal, claimed the county court was wrong when it failed to recognize Orion's pro se pleading "as a sufficient answer to preclude entry of default judgment" and didn't provide Orion with a notice of the default judgment hearing, the opinion said.
Kreger made up a three-judge panel with Chief Justice Steve McKeithen and Justice Leanne Johnson.
The case stems from a cellphone service contract Steven entered into while on active duty on a military base in Germany in September 2010, according to the background portion of the opinion. The following June, Stevens received orders for deployment to Afghanistan and he advised the cellphone service provider on base that he would be terminating the contract, as allowed the Service Members Civil Relief Act, to which the provider agreed, according to the opinion.
In January 2015, Stevens found out that Orion "was reporting negative items on his credit history for collection of the allegedly delinquent cellphone account," the opinion said. "According to Stevens, Orion claimed he never provided proof of his orders and the contracts were never canceled."
Stevens claimed his credit score "dropped substantially" and, as a result, that he had to pay higher finance charge when he purchased a vehicle, according to the opinion.
Stevens sued Orion in July 2015 over the service contract and debt collection, "disputed the debt and denied he owed anything," the opinion said.
As part of the usual lawsuit process, Orion was served with copies of court documents in August 2015, according to the opinion. On Oct. 7, 2015, by which date Orion had not filed an answer, Stevens filed a motion for default judgment, to which he attached a return of service and a certificate that included Orion's last known address, according to the opinion. Stevens also filed a notice of oral hearing the same day, which listed a hearing date of Oct. 30, according to the opinion.
On Oct. 21, Orion filed a pro se motion to dismiss, which was signed by Orion's owner, Rhonda Schirado, according to the opinion.
During the hearing in which Orion failed to appear, the county court granted Stevens' motion and entered a final judgment in his favor, according to the opinion.
"Without any mention of the pleading filed by Orion, the court granted the motion for default judgment and awarded damages, attorneys' fees, pre- and post-judgment interest, and costs of court," the opinion said.
Final judgment was entered Nov. 16, 2015, according to the opinion.
Orion filed a restricted appeal claiming the county court was wrong when it failed to recognize Orion's pro se pleading "as a sufficient answer to preclude entry of default judgment" and didn't provide Orion with a notice of the default judgment hearing, the opinion said.
"We sustain the first issue and reverse the trial court’s judgment," the opinion said.