Opinion issued October 31 , 2019

In The 

## Court of Appeals For The 

## First District of Texas

———————————— NO. 01
- 18
- 00081
- CV

——————————— AES VALVES, LLC AND IES INTERNATIONAL ENERGY SERVICES, LTD. , Appella nt s V. KOBI INTERNATIONAL, INC. D / B / A KOBI GROUP , Appe ll e e
On Appeal from the 125th District Court

Harris County, Texas Trial Court Ca se No. 2016
- 61999

MEMORANDUM OPINION In this restricted appeal, appellant s , AES Valves, L LC (“AES”) and IES International Energy Services, L td

. (“IES”) , argue that the tria l court improperly granted a no - answer default judgment in favor of appellee, Kobi International, Inc. d/b/a Kobi Group (“Kobi”) . In three issues , appellants argue that (1) the trial court2

improperly granted a default judgment and (2) legally and fact uall y insufficient evidence supports the award of damages , attorney’s fees , and prejudgment interest

. W e affirm in part and reverse and remand in part

. Background In 2012, Kobi and A ES entered into a $1.25 million purchase order for custom plug valves for a pi peline project in Peru

. Although AES delivered the plug valves, Kobi alleged that the plug valves were defective and inoperable for
the project

. Despite AES and IE S ’s 1 assur ances that they would repair the plug valves, Kobi alleged that the plug valves w ere neve r adequately repaired. Kobi sued appellants for breach of contract, breach of implied warranty of merchantability, breach of implied warranty of f itn ess for a particular purpose, fraud, and violations of the Deceptive Trade Practices Act (“DTPA”)

. As relev ant here, Kobi sought economic damages, treble damages under the DTPA , 2 exemplary damages for fraud, and attorney’s fees under section 38.00 1(8 ) of the Texas Civil Practice and Remedies Code and section 17.50(d) of the DTPA. Kobi also alleged th at AES and IES were jointly and severally liable pursuant to alter
ego theories

.

1 IES is the parent company of AES.

2 See T EX
. B US

. & C OM

. C ODE § 17.50(b)(1) (providing that trier of fact may award no more than three ti mes amount o f ec onomic damages if it finds conduct of defenda nt wa s committed knowingly).3

Kobi attempted to serve Robert Schmidt, the president and reg ist ered agent of both AES and IES, multiple times with a private process server and a constable.
When those att empts at service we re unsuccessful, Kobi filed a motion for substituted service. 3 Kobi asserted that it used reasonable diligence t o f ind the registered agent at appellants’ registered office , and Kobi attached the process server’s affidavit , stat ing that she could not loca te Robert Schmidt. Kobi requested that the trial court allow Kobi to serve the secretary of state, as appellants’ agent for service of process. 4 On December 27, 2016, the trial court granted Kobi’s motion for substituted service, all owing service of proce ss on appellants in one of five ways, including serving the Texas Secretary of State , as agent f or appellants

. After appellants failed to answer, Kobi sought a default judgment on liability , asserting that it completed substituted s ervice by affixing “a true copy of the citation and a copy of Plaintiff’s First Amend ed Petition to the front doo r of the

3 A party seek ing substitute d service of process is required by the rules of civil procedure to file a motion supported “by affidavit stating the location of the defen dant ’ s usual place of business or usual place of abode or other place where the defendant can probably be found and stating specifically the facts showing that servi ce has been attempted under either [ T EX
. R. C IV . P. 106](a)(1) or (a)(2) at the location na med in such affidavit but has not been successful [.]” T EX
. R. C IV . P. 106(b)

.
4 See T EX
. B US

. O RGS

. C ODE §§ 5.251 (providing that secretary of st ate is agent for entity when registered agent of entity cannot with reasonable diligence be fou nd), 5.252 (providing service on secretary of state is effected by deliverin g to secretary duplicate copies of process, notice, or demand).4

usual place of abode of Defendants AES Valves, LLC’s and IES International Energy Services, Ltd.’s registered agent, Robert Schmidt, 1 371 4 Vinery, Cypress, TX 77429.” Kobi stated that it received returns of service for both AES and IES on February 16, 2017

. Kobi asserted that because AES and IES had not answered, it was entitled to a default judgment on liability and a hearing to estab lis h the amount of damages. On April 25, 2017, the t ri a l court granted the default judgment on liability. Kobi then moved for a default judgment on damages , asserting that it was entitled to recover damages as stated in its first amended petition. Kobi so ught economic damages of $8,347, 015 .78 via its DTPA , fraud , and other causes of actions, and it sought treble damages of $16,694,031.56 pursuant to the DTPA. Alternatively , Kobi sought exemplary damages of $33,388,063.12 under its fraud cause of action

an d section 41.003 of t he Texas Civil Practice and Remedies Code. 5 Kobi also sought attorney’s fees under section 38.001(8) of the Texas Civil Practice and
Remedies Code and under section 17.50 of the DTPA

. After a hearing on its motion for default jud gm e nt on damages on July 13, 2017, 6 Kobi filed a supplement to its motion, asserting that the trial court requested

5 See T EX
. C IV
. P RAC

. & R EM
. C ODE § 41.003 (providing that exemplary damages may be awarded if cla imant proves by clear and convincing evidence that harm resul ts from fraud, malice, or gross negligence).

6 The hearing was not transcribed.5

that Kobi submit a revised proposed order that award ed treble damages but not punitive damages and award ed attorney’s fees incurred on a con ti n ge ncy basis. The trial court signed a July 26, 2017 final judgment , which awarded K obi a lump sum of $25,041,047.34 in damages , $400,640 .00 in attorney’s fees , and prejudgment interest

. The trial court’s final judgment further provided that AE S and IE S are jointly and severally liable to Kobi for all amounts in the judgment. On January 25, 2018, appellants filed a notice of restricted appeal. Service of Process In their first issue, appellants argue that the default judgment canno t s ta nd because th ey were not properly served. A. Standard of Review To succeed on a restricted appeal, a party is required, among other things, 7 to show that error is apparent on the face of the record. T EX
. R. A PP . P. 30; Barker CATV Constr., Inc. v. Ampro , I nc ., 989 S.W.2d 789, 79 1 (Tex. App.

— Houston [1st Dist.] 1999, no pet.); see Primate Constr., Inc. v. Silver , 884 S.W.2d 151, 152 (Tex. 1994). The face of the record consists of all the papers on file in the appeal, including any reporter ’ s record. Oste en v. Osteen , 38 S .W.3d 80 9, 813 (Tex. App.

— Houston [14th Dist.] 2001, no pet.). A review of a restricted appeal

7 Because the parties only contest whether error is appare nt on the face of the record, we limit our analysis t o that issue

.6

includes review of the legal and factual sufficiency of the evidence, including the evidence of damages. Norman Commc ’ ns v. Tex. Eastman Co. , 95 5 S.W.2d 269
27 0 (Tex. 1997) ; Regions Bank v. Centerpoint Apartments , 290 S.W.3d 510, 512 (Tex. App.

— Amarillo 2009, no pet.). A restricted appeal is a direct attack. Barker CATV , 989 S.W.2d at 792; see Primate , 884 S.W.2d at 152. The record must affir mat iv ely show stri ct compl iance with the rules for service of citation in order for a default judgment to withstand direct attack. Barker CATV , 989 S.W.2d at 792; Primate , 884 S.W.2d at
152. If strict compliance is not affirmatively shown, the service of pr oc ess is invali d and ha s no effect. Barker CATV , 989 S.W.2d at 792. There are no presumptions in favor of valid issuance, service, or return of citation in the face of a restricted appeal attack ing a default judgment. See Primate , 884 S.W.2d at 152. Wh en , as here, th e defend ant s ’ registered agent cannot be found at its registered office with reasonable diligence, the plaintiff is permitted to seek substituted service on the secretary of state. See T EX
. B US
. O RGS
. C ODE § 5.251(1)(B). Service of proc ess o n the secreta ry of st ate is accomplished by delivering duplicate copies of the process and any required fee. See id . § 5.252. Thereafter, the secretary of state shall forward the process to the entity ’ s most recent address on file with the secretary of st ate by certif ied mail , return receipt requested. See id

. § 5.253. The s ecretary may issue a certificate of service known7

as a Whitney Certificate. See Wright Bro s . Energy, Inc. v. Krough , 67 S.W.3d 271, n.1 (Tex. App.

— Houston [1st Dist.] 2001, n o p et .) (stating that “Whi tney certificate” is issued by s ecretary of s tate when it has received two copies of petition and citation and has forwarded one copy of each to defendant) (citing Whitney v. L & L Realty Corp ., 500 S.W.2d 94, 95

– 96 (Tex. 1973))

. “ Abs en t fraud
or mis take, t he Secretary of State ’ s certificate is conclusive evidence that the Secretary of State, as agent of [the defendant], received service of process for [the defendant] and forwarded the service as required by the statute.” Capit o l B ric k, Inc. v. Flemi ng Mf

g. Co. , 722 S.W.2d 399, 401 (Tex. 1986).
B. Analysis A ppellants argue that the return of service was improper and that the default judgment must be set aside. Specifically, appellants argue that the original return of citation, amen ded r eturn of citatio n, an d se co nd amended return of citation state that the process server received the documents before the order for alternative service was even signed. Appellants argue that although the returns of service show that the process server st at ed that he recei ved t he d oc uments around December 1 4 or December 1 5 , the trial court’s order granting substituted service was not signed until December 27.8

Kobi responds that appellants were served with process twice, by posting and through the s ecr eta ry of s tate, both of wh ich we re authorized by court order after appellants’ registered agent , Robert Schmidt, could not be found. The record reflects that the trial court granted Kobi’s motion for substituted service of its first amended petition. The trial court’s order a llowe d pr oc ess to be served on appellants , among other ways, by s erving the secretary of s tate, as agent for service of process of appellants with a true copy of the citation and a copy of pla i ntiff’s first amended petition.
The face of the record shows that the secretary of state issued Whit ne y Certificates for appellants on March 29, 2017

. The certificates state that it received a copy of the citation and plaintiff’s first amended petition 8 o n J an uary 17, 2017 and that a copy was forwarded on Januar y 2 3 , 2017, by certified mail, return receipt requested, to AES and IES via Registered Agent Robert Schmidt, 13714 Vinery, Cypress, TX 77429 , the address on file with the secretary of state

. 9

8 S ection 5.252 states that service on the sec retary of state is effected by “delivering to the secretary duplicate copies of the process, notice, or demand [

. ] ” T EX
. B US

. O RG S

. C ODE § 5.252

.
9 Section 5.253 provides that , after service in compliance w it h se ction 5.252, the secretary of state shall immediately send one of the c opies of the process, notice, or demand to the named entity with the notice “addressed to the most recent address of the entity on file with the secretary of state [.]” T EX
. B US

. O R G S

. C ODE § 5.253.9

A ppellants do not allege fraud or mistake in the issuance of th e Wh itney certificates. Instead, appellants argue that service is defective because the citations
and the returns of citations contain an incorrect address. Appellants claim that the cit at ions for AES and IES list an address at 13714 Vinery Cypress, Te xa s 77 429 , while other affidavits of service include an address at P.O. Box 13375, Austin, TX
78711. Appellants argue that the proper address for service on the Texas Secretary of State i s P .O . Box 12079 , Austin, Texas 78711

- 2079. Because the citations and the a ffidavits of certified mailing contain an incorrect address served, appellants
assert that the default judgment cannot stand. Appellants appear to argue that the address of the Texas Secretary of St at e is incorrect, and it asks us to take judicial notice o f t he correct service address for the Texas Secretary of State. However, appellants ha ve cited no authority that service is defective when an allegedly incorrect address is used for the s ec re tary of s tate. See T EX
. R. A PP . P. 38.1( i ). Moreover, in a res tri ct ed appeal, we are concerned with errors apparent on the face of the record. Whether the Texas Secretary of State’s address is correct or no t , the correct address is not apparent fro m t he face of the record. See Wright Bros. Energy , 67 S.W.3d at 274 (st at ing that entity’s correct address is nowhere apparent in trial court’s record)

. More importantly , the Whitney certificates are conclusive that the secretary of state received servic e o f process as agent for appellants , and appellant s do not a ssert fra ud o r mistake in the10

issuance of the Whitney C ertificates

. See Campus Inv s. , Inc. v . Cullever , 144 S.W.3d 464, 466 (Tex. 2004) (stating that certificate from s ecretary of s tate

con clu si vely establishes that process was served). Thus , we conclude that the

s ec retary’s certificate s conclusively established service of process , and the trial court had personal jurisdiction over appellants.
We overrule appellants’ first issue

. 10
DT PA
In their second issue, appellants argue that the trial court erred i n g ra nting default judgment on Kobi’s DTPA claim. Specifically, appellants argue that Kobi’s DTPA claim is legally and factually insufficient to support a default judgment. Appellan ts ar gue that Kobi allege d in its first amended petition that it
entered i n to a contract for $1,250,000 with appellants . Because the DTPA does not allow a cause of action for a su i t involving more than $500,000 , appellants argue that , on the face of Kobi’s pe ti tion, its DTPA claim is invalid. In its appellee’s brief, Kobi d oes no t re spond to appellants’ argument that the DTPA
claim is invalid. In their reply brief, appellants note that Kobi did not address the

10 Appellants assert a n umber of additional arguments as to why service of process was not effective

. B ecause we have concluded that the Whitney C ertificates a re conclusive, it is unnecessary to address appellants’ remaining c omplaints about s ervi ce of process. See T EX
. R. A PP . P. 47.1.11

in validity of its DTPA claim and that Kobi aband one d all causes of action other than the DTPA claim

. 11 A petition is inade qu at e to support a default judgment when: (1) the petition does not attempt to state a cause of action within the court ’ s jurisdiction; (2) the petition does not give the defendant fai r notice of the claim asserted; or (3) the petition affirmatively s hows th e invalidity of the claim. Paramount Pipe & Supply Co. v. Muhr , 749 S.W.2d 491, 494 (Tex. 1988).
T he DTPA contains an exemption if the cause of action aris es from a transaction o r s et of transactions relating to the same project if the total
consid erati on b y the consumer amounts to more than $500,000. T EX
. B US
. & C OM
. C ODE § 17.49(g). The purpose of this exemption is to maintain the DTPA as a viable source of relief for consumer s i n small transactions and to remove litigation between businesses ov er la rg e transactions from the scope of the DTPA. See

11 Although we agre e that Kobi did not address the in validity of its DTPA claim on appeal , appellants do not provide any authority or point to anywhere in the record showing that Kobi abandoned i ts breach of c ontr act, fraud, and breach of warranty causes of action. In a sup plement to Kobi’s motion for default judgment, Kobi stated that , after a hearing on July 13, 2017, the trial court requested that Kobi submit a revised proposed order that award ed treble dam ag es , b ut not punitive damages , and award ed attorn ey’s fees incurr ed on a contingency basis , but not on an hourly basis. Nothing in the record indicates that Kobi abandoned its other cause s of action in its first amended petition . We theref ore conclude that Kob i asserted and continued to assert all of the c auses of act ion referenced in its first amended petition.12

Citizens Nat ’ l Bank v. Allen Rae Invs., Inc ., 142 S.W.3d 459, 473

– 74 (Tex. App.

— Fort Worth 2004, no pet.).
In its first amended pet iti on , Kobi alleged that it had entered into a contract for $1,250,000 with a

pp ellants for custom plug valves. By its own pleading , Kobi was statutorily precluded from seek ing DTPA damages because Kobi’s transaction with appellants exceeded the $5 00, 00 limit imposed by the DTPA

. See T EX
. B US
. & C OM
. C ODE § 17.49(g) (imp os i n g $500,000 limit on DTPA) ; East Hill Marine, Inc. v. Rinker Boat Co. , 229 S.W.3d 813, 821 (Tex. App.

— Fort Worth 2007, pet. denied ) (holding that trial court did not err in grant ing s ummary judgment when transaction exceeded $500,000 limit of DTPA). We t h e refore conclude that Kobi could not assert a valid DTPA cause of action and such error is apparent on the face of the record

. 12 We sustain appellants ’ second issue

. 13

12 Appellants raise additional arguments as to why Kobi’s DTPA claim fails. Be cause we have concluded that Kobi is precluded from b ringing a DTPA cla im, i t is unnecessary for us to address appellants ’ additio nal arguments. See T EX
. R. A PP . P. 47.1.

13 Although we have held that Kobi’s DTPA claim is invalid and thus cannot suppor t the trial court’s granting of a default judgment, K obi also asserted b re ac h of contract, fraud, and breach of warranty causes of action that are unchallenged on appeal. Because these additional causes of action are unchallenged on appeal, the default ju dgment on liability is proper. See Walling v. Metcal fe , 863 S.W.2d 56, 58 ( Tex. 1993) (“We have held repeatedly that the courts o f appeals may not reverse the judgment of a trial court for a reason not raised in a point of error.”) ; Britton v. Tex. Dep ’ t of Criminal Justice , 95 S.W.3d 676, 681 (Tex. App.

— Ho uston [1st Dist.] 2 00 2, no pet.) (stating that if independent ground fully13 Unl iq uidated Damages
In their third issue, appellants argue that the unliquid at ed damage s were not supported by legally and factually sufficient evidence. 14 Appellants also argue that Kobi sought unliquidated damages pursuant to its prayer in its first amended
pe tition , but the “ prayer does not seek purported delay penal ties nor CM GC 15

-
t hreate ned charges or off sets , ” “ [t ]he alleged delay penalties CMG [C] threatened charges or off sets are neither pleaded n or may they be recovered, ” and “ Kobi is not entitled to relief or damages beyond its pleadings. ” A. Standard of Review and Applicable Law
In co nducting a legal

- sufficiency review, we credit favorable evi dence if a reasonable factfinder could and disregard contrary evidence unless a reasonable factfinder could not. Ci ty of Keller v. Wilson , 168 S.W.3d 802, 827 (Tex. 2005). We will susta i n a legal sufficiency challenge if the record shows (1) a complete ab sence of a vital fact; (2) rules of law or evidence bar the court from giving

su pports judgment, but appellant assigns no error to that independent ground, then court of appeals must accept validity of unch allenged independent ground)

.
14 Also within its t hird issue , a ppellants argue that Kobi did not present legally or fa ctually s ufficient evidence that a misrepresentation caused the problems with the plug valves

. Specifically , appellants argue that Kobi had to show that a DTPA violation con stituted a producin g cause of its alleged economic damages. Because we have alrea dy conclu ded that Kobi ’s DTPA cause of action is invalid , it is unnecessary for us to address appellants’ argument. See T EX
. R. A PP . P. 47.1.

15 C GMC is the abbreviated name for GyM

- Conciviles, the consor tium that ran the Peruvian p roject.14

weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more t han a scintilla; or (4) the evidence conclusively
establi she s the opposite of a vital fact. Id . at 810. We consider the evidence in the light most favorable to the finding an d indulge every reasonable inference that would support it. Id . at 82 2

. In rev iewing a factual

- sufficiency challenge, we
examine all th e e vidence. Castanon v. Monsevais , 703 S.W.2d 295, 297 (Tex. App.

— San Antonio 1985, no writ). We will reverse only if the finding is against the great weight and preponderance of the evid e nce . Id

. When a no

- answer default judgment is rendered, the defe nda nt ’ s liability for all causes of action pled is conclusively established and all allegations of fact in the petition , except the amount of unliquidated damages, are deemed admitted. Morg a n v . Comp ugraphic Corp ., 675 S.W.2d 729, 731 (Tex. 1984). The pla int iff must prove by competent evidence the amount of his unliquidated damages and must prove that the injury for which damages are sought was proximately caused by the event for which liab i lit y has been established. Id . at 732. “The damages
must be asce rta inable in some manner other than by mere speculation or conjecture, and by reference to some fairly definite standar d, established experience, or direct inference from known facts.” A.B

. F. Freigh t Sys., Inc. v. Austrian Imp. Serv., Inc ., 798 S.W.2d 606 , 6 15 (Tex. App.

— Dallas 1990, writ denied). During a default

- judgment proceeding, affidavit testimony will support15

the award of unliquidated damages if the affidavit avers personal knowled g e o f the facts, describes the circumstances that resulted in the l oss , and identifies the total amount owed as a result. See Tex. Commerce Bank, Nat ’ l Ass ’ n v. New , 3 S.W.3d 515, 517 ( Tex. 1999) (per curiam). Special damages must be pled

. T EX
. R. C IV . P

. 56

. Whe ther particular damages must be specifically ple d dep ends on whether they constitute general damages (also known as “direct damages”) or special damages (also known as “cons equential damages”). See id

. (“When items of special d a mag e are claimed, they shal l be specifically stated.”); Arthur An dersen & Co. v. Perry Equip. Corp ., 945 S.W.2d 812, 816 (Tex. 1997) (sub. op.) (using the terms “direct damages” and “co nsequential damages”); Anderson Dev. Corp. v. Coastal States Crude
Gat h eri ng Co ., 543 S.W.2d 402, 405 (Tex. App.

— Houston [14th D ist .] 1976, writ
ref ’ d n.r.e.) (using terms “general damages” and “special damages”). The distinction turns on whether the damages “usually” or “necessarily” flow from the wrongful act. S ee A rt

hur Andersen & Co ., 945 S.W.2d at 816 (explaining that “[ d]i rect damages are the necessary and usual result of the defendant ’ s wrongful act,” whereas consequential damages “result naturally, but not necessarily, from the defendant ’ s wrongful acts”); Ande rs on Dev. Corp ., 543 S.W.2d at 40 5 (stating that “[g]eneral da mages are those which naturally and necessarily flow from a wrongful act,” whereas “[s]pecial damages arise naturally bu t not necessarily from16

the wrongful act”). General damages need not b e pl ea ded because they “are so
usual an accompaniment of the ki nd of breach alleged that the mere allegation of the breach gives sufficient notice” that such damages were sustained. Hes s Die Mold, Inc. v. Am. Plasti

– Plate Corp ., 653 S.W.2d 927, 929 (Tex. App.

— T yler 1983, no writ). Special d amages, on the other hand, “a re so unusual as to normally vary with the circumstances of each individual case, and must be shown to have been contemp lated or foreseen by the parties.” Id

. A default judgment, like all judg me nts, must conform to the pleadi ngs. T EX
. R. C IV
. P. 301; Mu llen v. Roberts , 423 S.W.2d 576, 578 (Tex. 1968)

. B. Analysis
In its motion for default judgment on damages, Kobi a sked t o be awarded unliquidated damages as previously requested in its praye r of i ts first amended petition. Kob i’s prayer of its first amended petition asked that it be awarded judgment against defendants, jointly and severally, for the foll owing: (a) The $1.25 million that Kobi paid under the purchase order; (b) Damages and loss cause d by t he Defendants ’ contra ctual and tortious breaches, including costs incurred by KOBI to purchase replacement plug valves for the pipeline in Peru, to air freight t he plu g valves to Peru because they were delivered late to KOBI by AES, on plane tickets and ho tel rooms for AES rep air people to travel to Peru to attempt to fix the defects in the field, to warehouse the defective plug valves in Peru, and to otherwise in vestig ate the cause and potential solutions to the defective plug valves;

. . .17

(e) Exem

plar y damages

. Kobi ’s motion for de fault judgment on damages also requested additional
economic damages , consisting of $1,106,048 in lost income , “when CMGC
ref used t o pay Kobi Group this amount for the plug valves,” and $3,450,247.81 for “Contugas’s 16 inten t ‘t o purchase and install at its own expense the valves and deduct that expense . . . from the outstanding balance due to CGMC,’ which expense CGMC will pass o n to K obi Group.”
In it s first amended petition , the live pleading, Kobi did not request damag es f or ( 1 ) Kobi’s lost income of $ 1,106,048.00 and ( 2 ) “Contugas’s intent ‘to purchase and install at its own expense the valves and deduct that expens e. . . from the outstanding balance due to CGMC,’ which expense CGMC will pass o n to Kobi Group ” of $3,4 50,2 47.81. The se damages were cons equential damages because they result naturally, but not necessarily, from the acts complained of. See Arthur Anders en & Co. , 945 S.W.2d at 816 ; Mood v. Kronos Prod s . , Inc. , 245 S.W.3d 8, 12 (Tex. App.

— Dallas 2007, pet. denied ) (stating th at profits lost on other contracts or relationships resulting from breach are consequential damages) ; Boat Superstore , Inc. v. Haner , 877 S.W .2d 376, (Tex. App.

— Houston [1st Dist.] 1994, no pet.) ; Harp er v . Wellbeing Genomics Pty. Ltd ., No. 03

- 17

- 00035

- CV,

16 Cont ugas is a comp any that distributes and markets natural gas in the Ica region of P eru , a nd C GMC ’ s clien t on the pipeline project.18

2018 WL 6318876 , at * 11 (Tex. App.

— Austin Dec. 4, 2018, pet. filed ) (stating that profits lost on other contracts or rel ationships resulting from breach are indirect or consequential damages)

. As the se a re consequential or special damages, they must be specifically ple d

. T EX
. R. C IV . P. 56 (special damages shall be specifically stated) , 301 (j udgment must conform to pleadings ) ; Henry S. Miller Co. v. Bynum , 836 S.W.2d 160, 164 (Tex. 1992) (Phillip s, J ., concurring) (stating that “conseq uential damages must be specifical ly pled”)

. By failing to specifically plead for these consequential damages , the trial court committed error by awarding at least som e damages that did not co nform to the pleadings. Th erefore , the evidence was le gally in sufficient to support $4,556,295.8 1 out of the $25,041,047.34 in unliquidated damages awarded by the trial cou rt , and error is apparent on the face of the record. We sustain appellants’ third issue

. Because of o ur conclusion in appellants’ third issue, t his court must reverse

a ll of the da mage s award ed and remand the claims for a new trial on unliquidated
d amages. See Holt Atherton Indus

. , Inc. v. Heine , 835 S.W.2d 80, 86 (Tex. 1992) (holding that when ap pell ate court sustains no evidence point aft er an uncontested hearing o n unliquidated damages following no

- answer default judgment, appropriate dispos ition is to remand for trial on issue of unliquidated damages) ; see also Argyle Mech., Inc. v. Unigus Stee l, I nc ., 156 S.W.3d 685, 688 (Tex. App.

—19

Dall as 2005, no pet.) (if no

- ev idence point su stained as to unliquidated damages resulting from no

- answer defa ult judgment, appropriate disposition is remand for new trial on issue of unliquidated damages). We there fore reverse the trial court’s
award of dama ges, prejudgment interest, and attorney’s fees. See Holt Atherton Indus

. , 835 S.W.2d at 86; s ee , e.g . , Barker v. Eckman , 213 S.W

. 3d 306, 315 (Tex. 2006) (remanding for new trial on attorney ’ s fees when dama ges were reduced significantly). Conclusion We af firm the trial court’s default judgment as to liability. We reverse the remainder of the portion of the default judgment awarding unliquidated damages
and remand for a new trial on the issue of unliquidated dam ages only

.

Sherry Radack Chief Justice

Panel consists of Chief Ju stice Radack and Justices Goodman and Countiss.