## In the Court of Appe als Second Appell ate District of Texas at Fort Worth

___________________________ No. 02

- 21

- 00382

- CV

___________________________

On Appeal from the 67th District Court T arrant County, Texas Trial C ourt No. 067

- 323499

- 21

Be fore Sudderth, C. J.; Wa llac h and Walker, JJ. Memorandum Opinion by Justice Wallach 

### S TANWICH 

### M ORTGAGE 

### L OAN 

### T RUST 

### F AND ITS 

### T RUSTEE 

### W ILMINGTON 

### S AVINGS 

### F UND 

### S O CIETY 

### , FSB , Appellants

V



### . O AK 

### C REEK 

### O WNERS 

### A SSOCIATI ON 

### , I NC



### . , Appelle e2 MEMORANDUM OPINION
I. Introduction Appellants Stanwich Mortgage Loan Trust F and it s Trustee Wilmington
S avings Fund S ociety, FSB bring this restr icted appeal , 1 arguing in three issues t hat
la ck of proper service of process resulted in an erroneous no

- answer default judgment
for A ppell ee Oak Creek Owners Association, Inc. Because Oak Creek did not comply
with Civil Pract ice and Remedies Code Sect ion 17.028 , which “ is mandatory and provides the exclusive methods of service for financial institutions , ” U.S. Bank Nat ’ l
Ass ’ n v. Moss , 644 S.W.3d 130, 13 7 (Tex. 2022), w e reverse and remand

. II. Disc ussion
N o

- answer default jud gment s are disfavored and can not stan d w hen the
defendant was not served in strict compliance with applica ble require ments. Spanton v.
Bellah , 612 S.W.3d 314, 316 (Tex. 2020)

. “Strict compliance ” means that the court

1 As is necessary t o support our j urisdictio n over t h is restrict ed ap pea l, the re cord reflects tha t A ppellants file d the ir notice of rest ricted appeal w ithin six months of the complained

- of judgment ’s signing, that they were parties to the underlying lawsuit , and that they did not participate in t he hearing that resulted in th e complained

- of judgment a nd did not timely file any post

- judgment motions or re quests for findin gs of fact and conclusions of law

. See E x parte E.H. , 602 S.W.3d 486, 495 (Tex. 2020)

. T o prevail in the restricted appeal, A ppellants must show that error is apparent on the face of the record. See i d. at 497

. Because the face of the reco rd in a restricted appeal consists o f the papers on file with th e trial court when it rendered judgment , we may not consider in our a nalysis the documents attach ed to Appellants ’ brief th at are not part o f the appellate record

. HSBC Bank USA, Nat ’ l Ass ’ n v . Kingman Holdings LLC , No. 02

- 21

- 00087

- CV, 2022 WL 872474, at *2 & n.2 (Tex. App.

— Fort Worth Mar. 24, 2022, no pet.) (mem. op.)

.3 indulges no presumptions in favor of va lid issuance, service, or re t urn of citatio n , and

s ervice of process that does not strictly co mply is in valid and of n o effect. Id. at 316

– 17 ; see also WWLC Inv., L.P. v. Miraki , 62 4 S.W.3d 796, 799 (Tex. 202 1)

. Whether service stric tly complies with a sta tu te is a question of law tha t we review de no vo. HSBC B ank , 2022 WL 872474, at * 3

. When there is a specific statute
that s ets o ut the steps that must be taken for proper service, the inquiry is not
whether the defendant had act ual knowledge of the proceed ing against him but rather
wh ether t hat kno wledge was co nveyed to him in the required stat utory manner. Id. In
HSBC Ba nk , applying Moss , 2 we held that service was not proper when the plaintiff
failed to follow Section 17.028 ’ s m andatory and exclusive metho d of service for
financial in stitutions. 3 I d. at *4.

2 In Moss , U.S. Bank , acting a s Trustee for Residential A sset Mortgage Pr od ucts, I nc., Mortgage Ass et

- Ba cked Pass

- T hrough Certi ficate s Series 2005

- EFC2, claimed ownership of a deed of trust on Moss ’s home. 644 S.W.3d at 131 . Moss sued the bank to quiet title

. Id. The b ank was domiciled in Ohio , and Moss served th e S ecretary of S tate under the Est ates Code

. Id. at 13 1

– 32. The tr ial court granted Moss a no

- answer default judgment. Id. at 132 . T he supreme court reversed, holding that compliance with Section 17.0 28 is mandatory when the def endant is a financial inst itution. Id. at 1 34 , 137.

3 Although Oak Creek complains that Moss and H S

BC Bank were not decided when it filed suit or when it sought it s default judgment , “ [ w

] hen the applicabl e l aw changes during the penden cy of the appeal, the cour t of appeals must render its decision in light of the change in the law. ” Blair v. Fletcher , 849 S.W.2d 344, 345 (Tex. 1993)

. Further, although Oak Cree k argues that Moss did not address how to accompli sh service when the financia l institution doe s not have a registered agent or a branch in Texas , even if Moss allowed for exceptions , Oak Creek ’ s p etition did not allege that there we re no branches in Texas or that it could not comply wit h Section 17.028 ’ s requireme nts.4 A. T he record As pertinent to this appeal, Oak C reek alleged in its petition 4 that Appell ants had neither an office nor a designated registered agent in Texas , and it sought

s ubstitute service via C ivil Practice and Remedies Cod e Se ction 17.0 44. 5 Oak Creek alleged th at Ap pellants ’ principal office s were “ believed to be located in the City of
Ana heim , Californi a , ” and it set out in its petition an Ana heim address for th e Secretary of State to use in effecti ng out

- of

- state service

. Oak Cre ek based its u se of
this address on “[r]ecent communications addressed to Wilmington Savings Fund [, which] prompted respon sive communications from Carrington Mortgage Services,

4 As alleged in Oak Creek ’ s petition, t he original owner of Oak Cr eek Condomin i ums U nit 2 14 had f inanced the unit ’s purchase with a m ortgage subseq uently acquired by Appellants

. In March 2016, w hen t he ori ginal owner failed to pay he r co ndominium

- associ ation assessments, Oak Creek conducted a foreclosure sale and s old Unit 214

. See generally Tex. Prop. Code A nn. § 82.1 1 3

. Just over a ye ar later, Oak Creek conducted another foreclosure sale and purchas ed Unit 214

. See id. § § 82.102( a)(9) , . 113(f)

. On F e bruary 16, 2021, Oak Creek sued Appellants to quiet title

. See id. § 82.113(b)(3)

.
5 Under Section 17.0 44 (b) , the Secreta ry of State is an agent for service of process on a “ n onresident wh o en gages in bu siness in this state , but does not maintain a regular place of business in th is sta te or a designated agent for service of process, in any proceeding t hat arises out of the business done in th is state and to which the nonre siden t is a par ty. ” Tex. Civ. Pra c. & Rem. Code Ann. § 17.044 (b). A p pellants complain that the record unequivo cally shows t hat Oak Creek failed to strictly comply with the rules for se rvice of process on a financial instituti on under Section 17.028 and that it li ke w ise failed to comply wi th Section 17.044 ’ s requ irements

. Because Section 17.028 is mandatory and ex clusive here , we do not reach Appella nts ’ Section 17.0 44 arguments. See Tex. R. App. P. 47.1.5 L LC, a De laware corporation, wi th its principal off ice located ” at the A nah e im
address. 6 Eight days aft er Oak Cre ek filed its petition, a citation was issued to each
A ppellant and served on the Secretary of State. T h e Secretary of Sta te s ent s eparate citations, via cert ifi ed ma il, to eac h A ppellant at th e Anaheim address. Accordi ng to each of the S e cretary of State ’s certifications, “The RETURN RECEIPT was received
in this office dat ed March 9, 202 1, bearing signat ure. ” The certified mail rece ipts are

not in the re cord

. 7 Cf. Asset Prot . & Sec. Serv s . , L.P. v. Armijo , 570 S.W.3d 37 7,
384 (Tex. App.

— El Paso 2019, no pet.) ( “ If the individual who signs the receipt of

6 Oak Creek attached to its petition a copy of the January 2020 tr ansfer and assignment filed in the Tarra nt County Real Pro per ty Records, which listed Appellants
as “ located at ” the Anaheim address. Oak Creek also attached a September 3 0, 2020 pre

- suit notice addressed to Appel lants at the Anaheim address as well as at a Wil mington, Delaware address , which Oak Creek did not later use to try to effect serv ice

. In the pre

- su it notic e , Oak Cre ek ’s counsel s tated , “The enclosed correspondence was receive d at the Anaheim, California a ddress on Februa ry 28, 2020, but I have not been contacted or received a response. ” The “enclosed correspondence ” i s a Febru ary 24, 2020 letter addressed o nly to Wilm ington Savings Fund Society , FSB at the Anah eim address. Oak Creek also atta ched email
co rrespondence be tween Oak Creek ’s counsel and Carrington Mortgage Services, LLC , which was located at the Anah e im address.

7 As one of our si ster courts has n oted, “ [w]e cannot affirm a default judgment unless it is clear from the face of the record upon who m the attempted service of process was made, where, when , ho w, and in what capacity. ” Paramount Cre dit, Inc. v. Montgomery , 420 S.W.3d 226, 231 (Tex. App.

— H ouston [1st Dist.] 2013, no pet.) ; see HWAT, Inc. v. Agnew , No. 02

- 20

- 00301

- C V, 2021 WL 1229960, at *1 (T ex. App.

— Fort Worth Apr. 1, 2021, no pet.) (mem. op.) (reversing default judgment when certifi ed

- mail recei pt showing service of citat ion on HWAT ’ s cor porate regi stered agent did not show that the individual who signed the recei pt ha d a connection to the
c o rporate registered agent ).6 delivery is not the addressee or an agent otherw ise c apable of receiving service, service of process is inv alid. ” )

. Oak Cree k sought and received a no

- answer default judg ment
. 8 B. Analysis
Oak Creek does not dispute that Appellants meet the definition of “financial
institution ” under Texas Fin ance Code Section 201.101. 9 See Tex. Fin. Code Ann

. § 201.101

. Civil Pr actice and Remedies Cod e Sectio n 17.028 sets out the specific procedure for serving a “ financial institutio n ” defined by Finance Code Section
201.101

. Tex. Civ. P rac. & Rem. Code Ann. § 17.028. Under Section 17.02 8, citation may be ser ved by ( 1) serving th e financial instit ution ’s registered agent ; or (2) if the
fin ancial institution does not have a registered agent, serving the president or a branch manager at any office located in this state. Id. § 17.028(b) . If citation is not proper ly

s erved as provided by Section 17.028, then the financial institution “may maint ain an action to set aside the default judgment

. ” Id. § 17.028 (d). As one of our sister court s has note d, “[w]hen a p rocedur e for giving notice and obta ining jurisdiction is

8 The default judgment states that Appellants were “duly and legall y cited to ap pear and answer herei n , ” th at “[c]itation wa s served according to law , ” and that the court had “determined that it has ju risdiction over . . . t he pa r ties to th is proceeding. ” However, “[ w

] hile ordinarily presumptions are made in suppor t of a judgme nt (including presumptions of due service of citation when the judgment so recites) , no such presumption s are made in a d irect attack upon a [no

- answ er ] default judgment. ” HSBC Bank , 2022 WL 872474, at *2

.
9 To the contrary, i n its appella te bri ef, Oak Creek states, “ W SF is an o ut

- of

state finan cial institution acting as the trustee for S tanwich. ”7 stat utorily establish ed, that method is generally exc lusive and the form prescribe d
must be followed with reasonable strictness. ” Deutsche Bank Nat ’ l Tr. Co. v. Shepard , No. 12

- 20

- 00178

- CV, 2021 WL 1567928, at *2 (Tex. Ap p.

— Tyler Apr. 21, 2021, no pet.) (m em. op.)

. A party sui ng a financial inst itution in Texas must serve process in

acc ordance with Section 17.028; otherwise, service is ineffective. Id. at *3 ; see a lso Moss , 644 S.W.3d at 137 ( “ Because [S]ect ion 17 .028 is mandatory and provides the exclusive

met hods of service f or financial institutions, the Bank was not properly served, and
the default judgment rendered aga inst it must be set aside. ” ). Error is apparent on the face of the record b ecause Oak Creek d id not serve Appellan t s pursua nt to S ection 17.028 ( or e ven refere nce tha t section in its petition)

. 10 Accordingly, the trial c ourt erred by granting the default judgment , and we sustain this part of Appel lants ’ first issue , as well as its second and third is sues as to lack of personal jurisdiction and entry of the default judgm ent.
III. Conclusion
W e reverse the trial court ’ s ju dgment and remand the case for further proceeding s .

10 Oak Cree k argues that Carrington Mor tgage Se r vices, LLC “ acted as the age nt for WSF a nd S tanwich, ” but nothin g in the record reflects that the mortga ge servicer acted as Appellants ’ “registered a gent ” under S ection 17.028

.8 /s/ Mike Wallach Mike Wallach Justice
Delivered: August 25, 2022