# Fourth Court of Appeals **San Antonio, Texas** MEMORANDUM OPINION N o. 04
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- CV WILMINGTON SAVINGS FUND SOCIETY, FSB, AS TRUSTEE OF STANWICH MORTGAGE LOAN TRUST F , Appellant
v. HOCKESSIN HOLDINGS, INC., AS TRUSTEE OF THE LOST ARROW 25214 LAND TRUST , Appellee From the 45th Judicial District Court , Bexar County, Texas Trial Court No. 2021CI06649 Honorable Cynthia Marie Chapa , Judge Presiding Opinion by: Irene Rios , Justice Sitting: Patricia O. Alvarez, Justice Irene Rios , Justice Beth Watkins , Justice Delivered and Filed: November 3 0, 2022 REVERSED AND REMANDED A ppellant Wilmington Savings Fund Society, FSB, as Trustee of Stanwich Mortgage Loan Trust F (“Wilmington Savings”) brings this restricted appeal, arguing in two issues that appellee Hockessin Holdings, Inc., as Trustee of the Lost Arrow 25214 Land Trust (“Hockessin Holdings”) failed to properly s erv e it resulting in an erroneous no

- answer default judgment in favor of Hockessin Holdings.04
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- Because Hockessin Holdings did not com ply with Texas Civil Practice and Remedies Code section 17.028 , which is “mandatory and provides the exclusive methods of service for financial institutions, ” we reverse and remand
. U.S. Bank Nat’l Ass’n v. Moss , 644 S.W.3d 130, 137 (Tex. 2022); see also T EX . C IV . P RAC . & R EM . C ODE A NN . § 17.028. BACKGROUND The underlying dispute concerns real property. After obtaining title to the property in dispute f ollowing the foreclosure of a homeowners’ association lien, Hockessin Holdings sued Wilmington Savings, who held a superior lien o n the property. Hockessin Holdings sued Wilmington Savings, seeking among other remedies, to quiet title in favor of Hockessin Holdings and declare it as sole owner of the property, without any liens or encumbrances, and declare all deeds of trust or subsequent assignments as void and extinguished. Hockessin Holdings alleged in its petition that Wilmington Savings , a federal savings bank and foreign corporate fiduciary, had neither an office n or a designated agent in Texas, and thus based on various statutes, Wilmington Savings could be served through the Secretary of State. A citation was issued for Wilmington Savings and served on the Secretary of S tate. Based on this method of service and return, H ockessin Holdings then sought and obtained a no - answer default judgment on May 19, 2021 , based on Wilmington Savings ’ failure to answer . Wilmington Savings filed a notice o f restricted appeal on October 4, 2021. STANDARD FOR RESTRICTED APPEALS AND APPLICABLE LAW Rule 30 of the Texas Rules of Appellate Procedure governs restricted appeals. See T EX . R. A PP . P. 30. To prevail in a restricted appeal, an appellant must establish (1) it filed notice of the
re stricted appeal within six months after the judgment was signed, (2) it was a party to the underlying lawsuit, (3) it did not participate in the hearing resulting in the judgment complained04
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- of and did not timely file any postjudgment motions or requests fo r findings of fact and conclusions of law, and (4) error is apparent on the fac e of the record. Rodriguez v. Gonzalez , No. 04
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- CV, 2022 WL 2230937 , at *1 (Tex. App.

— San Antonio June 22, 2022, no pet.) (mem. op.) ; see also Pike

- Grant v. Grant , 447 S.W.3d 884, 886 (Tex. 2014); Alexander v. Lynda’s Boutique , 134 S.W
. 3d 845, 848 (Tex. 2004) (citing T EX . R. A PP . P. 30). Only the last element is at issue i n this restricted appeal. Because a trial court lacks personal jurisdiction over a defendant who i s not properly served with process, service must strictly comply with the rules. Spanton v. Bellah , 612 S.W.3d 314, 316 (Tex. 2020); see also T EX . R. C IV . P. 106. “Strict compliance” is construed “to mean just that.” Spanton , 612 S.W.3d at 316. We indulge no presumptions in favor of valid issuance, service, or return of citation , and service of process failing to strictly comply is invalid and of no effect
. Id

. at 31 6

– 1 7. Moreover, strict compliance must affirmatively appear on the face of the record. See id. at 316; Ex parte E.H. , 602 S.W.3d 486, 497 (Tex. 2020). In a restricted appeal, the face of the record consists of all the papers before the trial court w hen it rendered judgment, including all papers filed with the clerk. See Sherrand v. Si gnad , Ltd. , 637 S.W.3d 192, 196 (Tex. App.

— Houston [14th Dist.] 2021, no pet.). “Whether service strictly complied with the statutes and rules is a question of law that we review de novo .” HSBC Bank USA, Nat’l Ass’n v. Kingman Holdings LLC , No. 02
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- CV, 2022 WL 872474, *3 (Tex. App.

— Fort Worth March 24, 2022, no pet.) (mem. op) (citing LEJ Dev. Corp. v. Sw. Bank , 407 S.W.3d 863, 866 (Tex. App.

— Fort Worth 2013, no pet.)). “When there is a specific statute that sets out the steps that must be taken for proper service, the inquiry is not whether the defendant had actual knowledge of the proceeding against [ it ] but rather whether that knowledge was conveyed to [ it ] in the required statutory manner.” Stanwich Mortg. Loan04
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- Trust F v. Oak Cre e k Owners Ass’n , No. 02
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- CV, 2022 WL 3651973, *2 (Tex. App.

— Fort Worth Aug. 25, 2022, no pet.) (mem. op .) (citing HSBC Bank , 2022 WL 872474, *3)
. As this c ourt recognized earlier this year , the Texas Supreme Court recently determined that section 17.028 provides the exclusive means for service of process on a financial institution. See T EX . C IV . P RAC . & R EM . C ODE A NN . § 17.028; Moss , 644 S.W.3d at 137 (“[T]he Legislature intended for section 17.028 to provide the exclusive methods of service on financial institutions. We therefore hold . . . that compliance with section 17.028 is mandatory when the defendant is a financia l institution.”); see also CR+ Enterprises, Inc. v. Deutsche Bank Nat’l Trust Co. , No. 04
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– *3 (Tex. App.

— San Antonio June 15, 2022, no pet.) (mem. op.)
. ANALYSIS Wilmington Savings is undisputedly a financial institutio n and must be served according to section 17.028. 1 See T EX . C IV . P RAC . & R EM . C ODE A NN . § 17.028; Moss , 644 S.W.3d at 137; see also T EX . F IN . C ODE A NN . § 201.101. Hockessin Holdings did not serve Wilmington Savings by (1) serving the financial institution’s registered agent, or (2) if no registered agent, the president or a branch manager at any office located in this state. See T EX . C IV . P RAC . & R EM . C ODE A NN . § 17 .028(b). If citation is not properly served as provided by section 17.028, then the financial institution “may maintain an action to set aside the default judgment.” Id. § 17.028(d). Error is apparent on the fac e of the record because Hockessin Holdings d id not serve Wilmington Savings pursuant to section 17.028. Se e id. ; Moss , 644 S.W.3d at 137; Spanton , 612 S.W.3d at 316. Accordingly, the trial court erred by granting the default judgment , and a default

1 Because section 17.028 of the Texas Civil Practice and Remedies Code provides the exclusive means for service of process for a financial institution, Hockessin Holdings’ reliance on section 504.004 of the Texas Estates Code or section 17.044 of the Texas Civil Practice and Remedies Code to attempt to serv e Wilmington Savings through the Texas Secretary of State was improper. See T EX . C IV . P RAC . & R EM . C ODE A NN . § 17.028; Moss , 644 S.W.3d at 137.04
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- judgment is improper against a defendant who has no t been served in strict compliance with the law, accepted or waived process, or entered an appearance. T EX . R C IV . P . 124; Moss , 644 S.W.3d at 137 . We sustain Wilmington Savings’ appellate issues. 2 CONCLUSION Having found that error is apparent on the fa ce of this record, w e must reverse the default judgment and remand this cause for further proceedings consistent with this opinion. Irene Rios , Justice

2 We note that while Moss and CR+ Enterprises were not decided when Hockessin Holdings filed suit or when it sought its default judgment, “[w]hen the applicable law changes during the pendency of the appeal, the court of appeals must render its decision in light of the change in the la w.” Blair v. Fletcher , 849 S.W.2d 344, 345 (Tex. 1993).