NO. 07-08-0021-CV IN THE COURT OF APPEA LS FOR THE SEV ENTH DISTRICT OF TEXAS

AT AMAR ILLO PANELA JUNE 4, 2009

_________

_________

_________

___ REGIONS BA NK, AP PELLAN T

V. CENTE RPOINT APARTMENTS , APPE LLEE

_________

_________

_________

______ FROM THE COUNTY COURT AT LAW NO. 2 OF D ENTON C OUNTY; NO . G C- 20 07 -0 19 55 ; H ON ORAB LE MA RG AR ETB AR NE S, JU DG E

_________

_________

_________

____ Before CAMPB ELL an d HAN COCK an d PIRTLE , JJ. OP IN ION Appell ant, Region s Bank, fil ed a restricted appeal of a defaul t judgment entered in relation to a writ of garnishment in favor of appel lee, Cen terpoint Apartments. The default judgment found Region s liab le and awarded damages of $ 6,533.49, the amount of an un de rl yi ng ju dg me nti n fa vo r of C en te rp oi nta ga in st Stan le y El vi n Ha nc e, $ 50 1. 00 f or co sts of court for both the underlying proceeding and the defaultga rnishment proceedin g, and post-judgment interest ata rate of 8.25 percent per year. For the reasons expressed he re in , we af

fi rm in p art a nd re ve rsei n pa rt.See T EX . F IN . C ODE A NN . § 276.002 (Vernon 2006). Hereafter , any reference to this 1 prov is io n wi ll b e byre fe re nce to“s ecti on 2 76 .0 02 " o r “ § 27 6. 00 2. ” 2 Background After obta ini ng a judgment against S tanley El vin Ha nce, Centerpoin t filed a n applicatio n for writ of garnishment agai nst Region s o n June 29, 2 007. In its appli cation, Centerpoint sought to recover the damages awarded to it in the underlyi ng judgment against H ance as well as post-judgment interest on that amount until paid. The applicatio n was supp orted by the affidavit of Ce nterpointemployee Jennifer Reve n. Thi s affidavit indicates that, t o t he bes t of Reven’ s knowl edge, Han ce does not possess sufficient property in the state to satisfy the judgment, bu t tha t Reven has reason to be lieve that Regions held p roperty b elongin g to Ha nce or was inde bted to Ha nce. Re gions was properly served with the a pplication , but did not file an answer. Centerpoin t then moved for default judgment and the trial court signed the default g arnishment order describ ed above on September 4, 2007. Regions contends tha t it inadvertently faile d to answer the appl ication for w rit of garnishment and did not recei ve notice of the issuance of the writ until after the period for filing post-judgment motions. As a result, Reg ions fil ed the p resent restricted appeal

. Regions presents two i ssues by the present app eal: (1) the trial co urt er red in awarding damages in this caseb ecause such damages are p roscribed by Texas Finance Code se ction 276.002 , and (2) reversal is warra nt ed bec ause no reporter’s record was 1 prepared for this appeal.3 Standard of Review A restricted appe al is a procedural device a vailabl e t o a party who did no t participate, either i n person or through coun sel, in a hearing that resulted in a judgment ag ai ns t t hep arty. T EX . R. A PP . P. 30. To be eligib le for a restricted appeal, the party must not have timely filed a post-judgment motion, a request for findings of fact and co nclusions of law, o r a notice of appeal . Id. In addition, the error complained of must be ap parent on thef ac e of t herecord, w hi ch i nc lu de s al l pa pe rs on fil e in t hea pp ea l, inclu ding the st at em entof facts

. Nor ma n Com mc 'ns v. Tex. East ma n Co. , 955 S.W. 2d 269 , 27 0 (T ex. 1997). As such, arevi ew of a restricted appe al necessarily includes review of the leg al and factual sufficiency of the evidence. Id. A party may filea restricted ap peal b y filing a no tice of a pp ea l wi th in si xmo nt hso f t hed at e th e jud gm en t i s s ig ne d. T EX . R. A PP . P. 26.1. In the present ca se, there is no dispute that Region s filed its restricted appeal within six months after the judgment was sig ned, was a party to t he garnishment proceedi ng, and did no t participate in the garnishment procee ding e ither before or a fter judgment was entered. Thus, the issue in the p resent appeal is w hether the error Reg ions compl ains of is appa rent on the face of the record. It is Regions’s burden to demonstrate error on the fa ceo f t here co rd

. Se e No rma n Co mmc 'n s, 95 5 S. W.2 d at2 70

. Issue One: The Award of Damages By it s first issue, R egions contends that the trial court erred i n awardi ng damages to Centerpoint in the default judgment because such an award of damages is proscribed byse cti on 2 76 .0 02

.4

Garnishment is a statutory p ro ceeding whereby the property, money, or credits of a debtor i n the po ssession of another are appli ed to the payment of a debt. Ban k One, Texas, N.A. v. Sunbel t Sav., F.S.B., 824 S.W.2d 557, 558 (Tex. 1992). T hus, garnishment ne ce ss ar il y i nvol ve s t hreep arti es : ac re di to r, a de btor , an d a th ird pe rso n wh o ha s s om e ob li ga ti o n tot h e d e b to r. O ra n g e C o u n tyv . W a re , 8 1 9 S .W .2 d 4 7 2 , 4 7 4 ( T e x . 1 9 9 1 ). Garnishment is a creditor's action against hi s debtor's debtor, the garni shee, to obtai n sa ti sfa cti on o f w ha t isowe d th e cre di to r. I d. Fu nd s pl ac ed w it h a ba nk o rd in ar il y b ecom e ge ne ra l de pos its t ha t c re at e a de btor-cred itor re la ti on sh ipb etwe en th e ba nk a nd i ts depositor. Bank One, N.A., 824 S .W.2d at 558. A writ of garnish ment is avai lable to a judgment creditor where the creditor has a "vali d, subsisting judgment and makes an affidavit stating that, w ithin the plaintiff's knowledge, th e d efendant does not possess prop erty in T exass ub

ject toexec ut io n su ffi ci en t to sa ti sfyth e jud gm en t." T EX . C IV . P RAC . & R EM . C ODE A NN . § 63 .0 01 (3 ) (Ve rn on 2 00 8)

. Ge ne ra ll y, th e tri al co urt i s a ut ho ri ze d to render judgment agai nst the garnish ee for the ful l amount of the debtor’s debt to the creditor/garnishor w hen the g arnishee fails to an swer or ap pear in a garnishment proceeding. See La mb-McAshan Co. v. E llis, 270 S.W. 547, 549 (Tex . 1925); Norton v. B. & A. D rilling Co., 34 S .W.2d 1095, 1097(Tex.Co mm’nApp. 1931). The assessment of damages aga inst the defaulting garnishee is premised on a presumption that the garnishee isi nd eb te d toth e de btor i n an a mo un t s uf

ficie nttosa ti sfyth e cl ai m o f t heg ar ni sh or . Norton, 34 S .W.2d at 1097. A defaul ting gar nishee must timely act to se t aside the judgment to avoid this harsh result. See Kentucky Oil Corp. v. Davi d, 285 S .W. 290, 293 (T ex . 1 92 6)

.5

Section 2 76.002, effective S eptember 1, 2005, provides that “if a finan cial i nstitution fails to timel y f ile an answer to a writ of garnishment i ssued before or after a judgment is rendered in the case, a court may e nter a default judgment aga inst the fina ncial institution so le lya s to th e ex is te nc e of l ia bi li ty an d no t astoth e am ou nto f d am ag es .” § 2 76 .0 02 (a ). Further, “[a] financial institution against w hich a default judgment is entered under Subs ecti on ( a)i s no t de em ed to ha vei n th e fi na nc ia l in sti tu ti on ’sp os se ss io n or to have knowledg e of sufficien t debts, assets, or perso nal effects of the deb tor to satisfy the debtor’s obl igation to the garnish or.” § 276.002 (b). After the default judgment is entered as to li ability, “the ga rn ishor has the burden to establish the amount of a ctual damages prox i ma te l yc a u s e d tot h e g a rn i s h o r b yt h e fi n a n c i a l i n s ti tu ti o n ’ sd e fa u l t. ” § 2 7 6 .0 02 (c)

. After this burden has been met, the trial co urt ma y award damages to the garnish or as es ta bl is he d un de r s ub se cti on (c ). § 2 76 .0 02 (d )(1 ). The pa rti estoth e pres en t a pp ea l di sp ut e th e ap prop ri at e co ns tru cti on o f section 276.002. Regions contends that sectio n 276.002 limits the trial court’s authority to enter default judgment in a garn ishm ent proceedin g agai nst a finan cial i nstitution to a determination that the financial institution i s liab le. S ubsequent to this determination, Regions contends that the trial court must hold a separate hearing to determine the amount of damages that the financia l institution is l iable for. Centerpoint co ntends thatsection 276.002 i s permissive and simpl y articulates thatt he tr ial co urt may enter a d efault ga rn is hm en t t ha t i s l im ited too nly a deter mi na ti on th atth e ba nk i s l ia bl e. F urth er , Ce nt er po in t con te nd s t ha t t he rei s n ot hi ng i n th e sta tu te that would re qu ire th e tri al co urt6

to hold a separate h earing to determin e t he appropriate amount of damage s follow ing a determination of l iabili ty. No cases have construed section 276 .002 since it h as been enacted and , thus, this is a case of first impression. Appl ying the plain and common mean ing of the words u sed, see Fitzgeral d v. Adva nced Spine Fi xation Sys., Inc., 996 S.W.2d 864, 86 5 (Tex . 1999), we conclude that subsection (a) limits the trial court’s authority to enter d efault garnishment orders against financial institutions to a determinati on of liab ility an d prohibi ts a determination of da mages. Before the a ddition of sectio n 276.002, a trial cou rtwas authorized to ente r d ef

ault judgments in garnishment p roceedings brought agai nst financial institutions un der the authority of Texas Ru le of Civil Procedure 667. See T EX . R. C IV . P. 66 7. As s uc h, fo r s ecti on 2 76 .0 02 toh av e an y m ea ni ng , i t m us t m od if y t hep ri or

a ut ho ri ty gran te d tri al co urts byR ul e 66 7. W e co ns true subse ction (a ) a s m od if yi ng th e au th or ity granted by R ule 66 7 by a llowi ng the e ntry of a default garni shment order against a financi al in sti tu ti on “s ol el y a s to th e ex is te nc e of l ia bi li ty a nd no t asto th e a mo un t o f d am ag es .” § 27 6. 00 2( a)

. This construction is reenforced b y su bsection (b) of section 276.00 2. Subsection (b) prohibits makin g the presumption that the ga rnishee i s i nde bted to the debtor in an amount sufficient to satisfy the claim of the garni shor upon which the assessment of damages in a typica l defaul t garnishment is premised. Co mpare § 276 .002 (b ) (m ay not deem that the defaulting financial institution ha s possessio n of or kn owledgeof sufficient debts, as sets, or personal effects of the debtor to satisfy the debtor’s obligatio n to the garnishor), with N orton, 34 S.W.2d at 1097 (the presumption of indebtedness arising fromTo resolve the issues presented in the p resent ap peal, we need not a nd, therefore, 2 do not a ddress the i ssue of w hether a separate hearing o n damages must be hel d by the trial court following entry of a default garnishment against a financi al in stitution. For purposes of a nalysis, we wil l assume that su ch a he aring wa s not requi red and that Centerpoint cou ld havemet its burden to prove damages through evidence otherwise contained in the appella te record. Galysh is identified by the affidavi t as a Col lections S upervisor for Cen terpoint 3 Apartments. 7 default in a garnishment proceedi ng estops the defaulting garnisheefrom challen ging the ability to satisfy the ga rnishee’s clai m). Because subsection (b) prohibits the presumption of indebtedn ess, subsection (c) ex pressly pla ces the bu rden of establ ishing the extent of the financia l institution ’s ind ebtedness, and any addi tional damages, on the g arnishor. See § 276.002(b), (c). Whil e assign ing the garnishor the burden of p roving a defaulting financial institution’s indebtedness may be cou nterintuitive sin ce the fina ncial institution would b e in the better position to assess the ex istence and extent of such indebtedness, we be lieve that this construction of the statute is the only way to give effect to the statute as awhol e and in a m anner that gives e ffect to each subse ction. Se e Bd. of Adjustment of San Antonio v. We nd e, 9 2 S. W.3 d 42 4, 4 30 (T ex . 2 00 2)

. Ba se d on our

co ns tru cti on o f s ecti on 2 76 .0 02 , we mu st now re vi ewth e re co rd to determine whether Centerpoint presen ted sufficient evi dence to discharge the burden of proving R egions’s indebtedness to Hance. See Norman Commc'ns, 955 S.W.2d at 270 2 (review of a restricted appeal necessarily includes review of the l egal a nd factual sufficiency of the evid ence). The onl y eviden ce relating to the damages caused by Regions’ s default in the garnishment proceedi ng is contained within Reven’s affidavit, which wa s attached to the appl ication for w rit of garnishment, and Pamela Gal ys h’s af fidavit in support of 38

default judgment. Gal ysh’s affidavit simply states that H ance owed Cen terpoint $6,533.49 under the o riginal judgment. Galysh provi des no information upon which to determine the extent of Regions’ s indebtedness to Hance, if any. Reven states that Centerpoint owns a judgment awarding it $ 6,468.81 against Hance, that she has no knowledg e that Han ce has sufficient property in Texas subject to executio n to satisfy the d ebt, and that she bel ieves and has reason to belie ve that Regions “has property belonging to the Debtor o r is in debted to the Deb tor.” W hil e Reven ’s affidavit does add ress Regio ns’s in debtedness to Hance, ev en ta ke n astr ue , i t doe s n o mo reth an e sta bl is h th atR eg io nsi s l ia bl e toC en te rp oi nt

. Nothing in Reven’s affidavit iden tifies the extent of Regi ons’s i ndebtedness to Hance. As such, we c onc lude that the evi dence of Regions’ s indeb tedness to H ance, whi ch cannot be deemed by Regi ons’s de fault, is no evidence and is legally insufficient to meet the burden of p roof imposed o n Centerpoi ntbysection 276.002(c). Therefore, we must reverse the trial court’s award of damages a gainst Re gions. Ordinarily, when an a ppellate court reverses a judgment on no evidence grounds, it renders judgment for appella nt on that point. S ee Vi sta Chevrolet v. Lewis, 7 09 S.W.2d 176, 176 (Tex . 1 98 6)

. Howe ve r, be ca us e bo th C en te rp oi nta nd th e tri al co urt con str ued section 276 .002 as requ iring proof only of the liqui dated damages found aga inst Hance , the evidence of dam ages cause d by R egions’s default has not been fully deve loped. When a cas e is reversed on l egal su fficiency grounds but the evi dence i s in need of furtherRegions’ s prayer requests reversal of the d amages portion of the judgment and 4 remand so that C enterpoint “be requ ired to meet i ts burden of proof concerning damages as set forth in the statute . . . .” Gene rally, a co urt cannot grant greaterreli ef than is re que st ed b y a pa rty. See Ho rroc ks v. Tex. Dep ’tof Tra ns p. , 852 S.W. 2d 498 , 499 (Te x. 1993). Be cause Re gions d id not pray for rendition, we wil l remand the case for further proceedings. 9 de ve lop ment, it is a pp ro pr ia tetore ma nd fo r an ewtr ia l ra th er th an re nd er in g jud gm en t. 4 Se e Ho ltAth erto n In du s., In c. v. He in e, 8 35S .W. 2d 8 0, 8 6 (T ex . 1 99 2)

. Issue Two: S eparate Hearin g on Damages Our resolution of Reg ions’s first issue pretermits our ne ed to review Reg ions’s second i ssue. Se e supra n ote 2. Conclusi on Wea ffi rm th e jud gm en t of t hetr ia l co urt to th e exte ntt ha t itfin dsR eg io nsl ia bl e to Centerpoint, but reverse that portion of the judgment awardi ng damages to Centerpoint and remand for further proceedings consistent wi th this opi nion.

Mackey K. Hancock Justice