Court Opinion

ID: 9898801
Source: CourtListenerOpinion
Date Created: 2023-11-15 07:10:00.645846+00
Date Added: 2024-06-11T09:17:58.114838
License: Public Domain

Affirmed in Part, Reversed and Remanded in Part, and Opinion Filed
November 7, 2023

                                              S   In The
                                  Court of Appeals
                           Fifth District of Texas at Dallas
                                        No. 05-22-00779-CV

                  HUFFMAN ASSET MANAGEMENT, LLC
                 AND PRAIRIE CAPITAL, LLC, Appellants
                                V.
              MAURICE COLTER AND NI-IDA COLTER, Appellees

                     On Appeal from the County Court at Law No. 2
                                 Dallas County, Texas
                         Trial Court Cause No. CC-21-03561-B

                            MEMORANDUM OPINION
                 Before Justices Partida-Kipness, Reichek, and Breedlove
                           Opinion by Justice Partida-Kipness
        In this lease dispute filed by appellees Maurice Colter and Ni-Ida Colter, the

trial court entered a no-answer default judgment against appellants Huffman Asset

Management, LLC (HAM)1 and Prairie Capital, LLC (Prairie Capital) and denied

their motion for new trial. HAM and Prairie Capital contend the default judgment

    1
     The Original Petition lists HAM as “Huffman Asset Management, LLC, doing business as Concrete
Jungle Properties.” This is consistent with the style of the case in the trial court. However, the text of the
judgment references HAM as “Huffman Asset Management, LLC,” and HAM’s appellate counsel identifies
appellants as “Huffman Asset Management, LLC and Prairie Capital, LLC.” For purposes of this Opinion,
we consider “Huffman Asset Management, LLC, doing business as Concrete Jungle Properties” and
“Huffman Asset Management, LLC” as the same entity and refer to both as HAM.
should be vacated and a new trial ordered because the service of process on HAM

and Prairie Capital through the Texas Secretary of State was ineffective and,

alternatively, HAM and Prairie Capital satisfied the Craddock requirements for a

new trial. See Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex.

1939). We reverse the award of mental anguish damages, remand for a new trial on

mental anguish damages and recalculation of additional damages under the

Deceptive Trade Practices Act (DTPA), and affirm the default judgment in all other

respects.

                                 BACKGROUND

      In August 2019, the Colters leased an apartment in Denton, Texas. The lease

lists Prairie Capital as the property’s “Owner.” The Colters allege HAM was the

management company for Prairie Capital. According to the Colters, before signing

the lease, a HAM representative assured them the apartment units at the complex

were not prone to insect infestations, and the landlord would “routinely” address any

issues “with immediate and regular steps to eliminate any issues.” After moving in,

however, the Colters discovered their apartment unit had “persistent and continuous

roach infestation problems.” The Colters contend HAM and Prairie Capital failed to

resolve the insect infestation issues and, as a result, the insects “proceeded to ruin”

the Colters’ belongings and caused more than $2,700 in property damage.

      In their August 27, 2021 Original Petition, the Colters asserted DTPA, fraud,

non-disclosure, and negligence claims against HAM and Prairie Capital and asserted

                                         –2–
additional claims against Prairie Capital for wrongful retention of their security

deposit and breach of the lease. The Original Petition stated HAM and Prairie Capital

could be served with citation as follows:

      HAM could be served through its registered agent for service of
      process, Douglas J. Huffman, at 3121 Overlook Circle, Highland
      Village, Texas 75077;

      Prairie Capital could be served through its registered agent for service
      of process, Doug Huffman, at 8214 Westchester Drive, Suite 850,
      Dallas, Texas 75225.

The Original Petition also stated HAM’s “principal address” was at 8214

Westchester Drive, Suite 850, Dallas, Texas 75225. The Colters attempted to serve

HAM, Prairie Capital, and Huffman at the Overlook Circle address, the Westchester

Drive address, and the address listed in the lease, 4211 San Jacinto Street, Suite 112,

Dallas, Texas 75204. Process server Robbin R. Lorenz was unable to serve HAM,

Prairie Capital, or Huffman with the Original Petition at those addresses.

      In separate Affidavits of Due Diligence, Lorenz described the dates, times,

and locations of his unsuccessful attempts to serve HAM and Prairie Capital. He

provided the following reasons why he was unable to serve HAM, Prairie Capital,

and Huffman at the addresses provided:

      8214 Westchester Drive, Suite 850, Dallas, TX 75225:

             o      Veritex Bank, not HAM, occupies the eighth floor
                    of 8214 Westchester Drive;

             o      HAM has no office at 8214 Westchester Drive;

             o      Prairie Capital has no office at 8214 Westchester
                    Drive; and
                                        –3–
                o        “[T]here is no Doug Hoffman [sic] that works
                         here.”

        3121 Overlook Circle, Highland Village, TX 75077:

                o        Huffman no longer resides at this address; and

                o        The property’s current owner told Lorenz he
                         purchased the property from the Huffmans in
                         August 2020.

        4201 San Jacinto St., # 112, Dallas, TX 75204 and
        4211 San Jacinto Street, Suite 112, Dallas, Texas 75204:

                o        The addresses are at an apartment building with
                         secured access; and

                o        Lorenz was unable to access the building because it
                         was secured.

        When their efforts at service failed, the Colters amended their petition.2 In the

first amended petition, the Colters asserted they were unable to serve HAM, Prairie

Capital, and Huffman despite using reasonable diligence to serve them through a

process server. The Colters further asserted that, under those circumstances, the

Secretary of State of the State of Texas may be served as HAM and Prairie Capital’s

agent for service. See TEX. BUS. ORGS. CODE § 5.251(1)(B) (the secretary of state is

an entity’s agent for service of process if “(A) the entity fails to appoint or does not

maintain a registered agent in this state; or (B) the registered agent of the entity

cannot with reasonable diligence be found at the registered office of the entity; . . .”).

    2
      The Colters’ first amended petition contained the same factual allegations and claims as their original
petition.
                                                    –4–
The Colters then served the Secretary of State as HAM and Prairie Capital’s agent

for service of process.

        In a November 22, 2021 Whitney certificate3, the Secretary of State confirmed

(1) its office received the citation and first amended petition on October 25, 2021,

(2) its office forwarded a copy of the citation and first amended petition by certified

mail return receipt requested to HAM’s “Registered Agent Douglas J Huffman” at

3121 Overlook Circle, Highland Village, TX 75077 on November 2, 2021, and (3)

the process was returned to the Secretary of State on November 22, 2021, “Bearing

Notation, Forward Time Expired, Return to Sender.”

        In a December 2, 2021 Whitney certificate, the Secretary of State confirmed

(1) its office received the citation and first amended petition on October 25, 2021,

(2) its office forwarded a copy of the citation and first amended petition by certified

mail return receipt requested to Prairie Capital’s “Registered Agent Doug Huffman”

at 8214 Westchester Drive, Suite 850, Dallas, TX 75214 on November 2, 2021, and

(3) the process was returned to the Secretary of State’s office on December 1, 2021,

“Bearing Notation, Return to Sender, Attempted Not Known, Unable to Forward.”

    3
      In Whitney v. L & L Realty Corp., the plaintiff took a default judgment against defendants after serving
them via the Secretary of State. 500 S.W.2d 94, 95 (Tex. 1973). The Texas Supreme Court held “the record
before the trial court must contain a certificate from the Secretary showing that it forwarded a copy of the
citation to the defendant.” U.S. Bank Nat’l Ass’n as Tr. for Residential Asset Mortg. Prods., Inc., Mortg.
Asset-Backed Pass-Through Certificates Series 2005-EFC2 v. Moss, 644 S.W.3d 130, 132 (Tex. 2022)
(citing id. at 95–96). “Without that showing, the trial court did not have jurisdiction over the defendant.”
Id. Such a certificate is known as a Whitney certificate. Id.; MG Int’l Menswear, Inc. v. Robert Graham
Designs LLC, No. 05-18-00517-CV, 2019 WL 642724, at *1 (Tex. App.—Dallas Feb. 15, 2019, no pet.)
(mem. op.).
                                                    –5–
         The Colters filed a motion for entry of default judgment on February 25, 2022

(the February 25 Motion), and a first amended motion for entry of default judgment

on April 14, 2022 (the April 14 Amended Motion). The Colters filed the following

evidence in support of their requests for default judgment:

                Affidavits of Maurice Colter and of Ni-Ida Colter4;

                First Amended Affidavit5 of their counsel, Robert H. Nunnally,
                 Jr., with the following accompanying documents:

                 o       A Certificate of Fact issued by the Secretary of State
                         on January 7, 2022, certifying that (1) HAM is an
                         existing, domestic entity, and (2) the Secretary of
                         State’s records show Huffman as HAM’s
                         designated registered agent for service, and 3121
                         Overlook Circle, Highland Village, TX 75077 as
                         HAM’s designated registered office for service;

                 o       A Certificate of Fact issued by the Secretary of State
                         on January 7, 2022, certifying that (1) Prairie
                         Capital is an existing, domestic entity, and (2) the
                         Secretary of State’s records show Huffman as
                         Prairie Capital’s designated registered agent for
                         service, and 8214 Westchester Drive, Suite 850,
                         Dallas, TX 75214 as Prairie Capital’s designated
                         registered office for service;

                 o       Lorenz’s affidavits of due diligence;

                 o       The November 22, 2021, and December 2, 2021,
                         Whitney certificates;

                 o       Counsel’s billing records; and

   4
       The Colters filed their affidavits as standalone documents when they filed the February 25 Motion.
   5
     The Colters filed Nunnally’s first amended affidavit and accompanying documents as a standalone
pleading when the Colters filed the April 14 Amended Motion.
                                                   –6–
             o     Nunnally’s August 2, 2021 demand letter sent to
                   HAM and Prairie Capital.

The Colters also filed a first amended certificate of last-known mailing address

listing the last known addresses of HAM and Prairie Capital as “4201 San Jacinto,

# 112, Dallas, TX 75204.” The Colters incorporated by reference their previously-

filed affidavits and Nunnally’s affidavit in the April 14 Amended Motion.

      The trial court signed a default judgment in favor of the Colters on April 25,

2022. The default judgment awarded the Colters the following damages: (1)

economic damages of $2,712 for property damage, (2) additional damages under the

DTPA of $15,424, (3) damages and statutory penalties for wrongful retention of their

security deposit totaling $1,000, (4) attorney’s fees through the date of judgment of

$4,667.24, (5) conditional post-trial and appellate attorney’s fees; and (6)

prejudgment interest, post judgment interest, and costs. The trial court also awarded

Maurice and Ni-Ida $5,000 each for mental anguish. The trial court sent HAM and

Prairie Capital a Notice of Default Judgment to 4201 San Jacinto, # 112, Dallas, TX

75204, which was the address the Colters submitted in their first amended

certificates of last-known mailing address.

      On May 25, 2022, HAM and Prairie Capital filed a motion to transfer venue

and motion for new trial. The Colters filed a response in opposition to the post-

judgment motions. The trial court held a hearing on the motion for new trial on June

22, 2022, and signed an order denying the motion for new trial on July 7, 2022. The

trial court determined the motion to transfer venue was mooted by the order denying
                                         –7–
the motion for new trial. HAM and Prairie Capital requested findings of fact and

conclusions of law. The trial court declined to issue findings and conclusions. This

appeal followed.

                            STANDARD OF REVIEW

      We review denials of motions to set aside default judgments and motions for

new trial for an abuse of discretion. E.g., Dolgencorp of Tex., Inc. v. Lerma, 288

S.W.3d 922, 926 (Tex. 2009) (per curiam); Davis v. West, 433 S.W.3d 101, 108

(Tex. App.—Houston [1st Dist.] 2014, pet. denied). The test for abuse of discretion

is whether the trial court acted arbitrarily or without reference to guiding legal

principles. Cire v. Cummings, 134 S.W.3d 835, 839 (Tex. 2004).

      A defendant can prove its entitlement to a new trial after a no-answer default

judgment in either of two ways. MobileVision Imaging Servs., L.L.C. v. LifeCare

Hosps. of N. Tex., L.P., 260 S.W.3d 561, 564 (Tex. App.—Dallas 2008, no pet.).

The first is by showing service of process was invalid. Id. (citing Fid. & Guar. Ins.

Co. v. Drewery Constr. Co., 186 S.W.3d 571, 574 (Tex. 2006) (per curiam)).

Alternatively, a default judgment should be set aside and a new trial granted when

the defaulting party establishes the three Craddock elements: (1) the failure to appear

was not intentional or the result of conscious indifference, but was the result of an

accident or mistake, (2) the motion for new trial sets up a meritorious defense, and

(3) granting the motion will occasion no delay or otherwise injure the plaintiff. Id.

(citing Craddock, 133 S.W.2d at 126). When a defaulting party moving for new trial

                                         –8–
meets all three elements of the Craddock test, a trial court abuses its discretion if it

fails to grant a new trial. Dolgencorp, 288 S.W.3d at 926; see also Holt Atherton

Indus., Inc. v. Heine, 835 S.W.2d 80, 86 (Tex. 1992) (“[A]n adjudication on the

merits is preferred in Texas.”).

                                     ANALYSIS

      HAM and Prairie Capital bring multiple issues on appeal. In their first, second,

fourth, and fifth issues they challenge the default judgment. In their third issue, they

challenge the trial court’s denial of their motion for new trial. In their sixth issue,

they assert the underlying proceeding is subject to mandatory venue in Denton

County. In their final issue, HAM and Prairie Capital ask this Court to award them

appellate costs as prevailing parties.

I.    The Default Judgment

      HAM and Prairie Capital argue the default judgment should be reversed

because the Colters did not strictly comply with the requirements for service of

process, the default judgment references a superseded motion for default judgment,

the trial court was required to hold a hearing on unliquidated damages, and the

damages awarded to the Colters were not supported by sufficient evidence. We will

address each in turn.

      A.     Service on the Secretary of State as HAM and Prairie
             Capital’s agent for service of process

      In their first issue, HAM and Prairie Capital argue the default judgment should

be reversed because service on the Secretary of State was invalid. Both maintain
                                          –9–
they did not receive the notice from the Secretary of State because the Colters gave

the Secretary of State a “bad” address known by the Colters to be an incorrect

address. Rather than giving the Secretary of State the address of HAM’s registered

agent (the Overlook Circle address) and Prairie Capital’s registered agent (the

Westchester Drive address), HAM and Prairie Capital argue the Colters should have

provided the Secretary of State with the address of HAM and Prairie Capital’s

principal place of business, which they contend is 4211 San Jacinto Street, #112,

Dallas, TX 75214 (the San Jacinto address). They argue the San Jacinto address was

the only proper address for service because it is “the most recent” address for both

entities on file with the Secretary of State. See TEX. BUS. ORGS. CODE § 5.253(b)

(after service in compliance with Section 5.252, the Secretary of State shall send

notice “to the most recent address of the entity on file with the secretary of

state; . . .”). To make this argument, HAM and Prairie Capital rely on public

information reports filed with the Secretary of State listing the San Jacinto address

as the address of each entity’s principal place of business. Neither the Colters nor

the Secretary of State were required to discover or attempt service at the San Jacinto

address.

             1.    Designation and maintenance of registered agent and
                   registered office

      Chapter 5 of the business organizations code requires each filing entity to

“designate and continuously maintain” a registered agent and a registered office in

Texas. TEX. BUS. ORGS. CODE § 5.201. A party is required to serve the entity’s
                                  –10–
registered agent with process at the entity’s registered office. Id. at §§ 5.201(b)(1),

(b)(3), (c), (d); § 5.206. The Certificates of Fact provided by the Secretary of State

show at the time the Colters attempted to serve Huffman, HAM, and Prairie Capital,

Huffman was the designated registered agent for HAM and Prairie Capital, the

Overlook Circle address was the address of HAM’s designated registered office, and

the Westchester Drive address was the address of Prairie Capital’s designated

registered office. The Colters’ pleadings and the process server’s affidavits establish

service was attempted at the addresses Huffman, HAM, and Prairie Capital provided

to the Secretary of State as their registered agent’s address and registered office

addresses.

             2.     Reasonable diligence to serve entity at registered office

      If the registered agent cannot with reasonable diligence be found “at the

registered office,” the Secretary of State is deemed an agent for service of process

on the corporation. TEX. BUS. ORGS. CODE § 5.251(1)(B). “[A] diligent party may

rely on the registered address a [limited liability company] has placed on file with

the Secretary of State.” Autodynamics Inc. v. Vervoort, No. 14-10-00021-CV, 2011

WL 1260077, at *6 (Tex. App.—Houston [14th Dist.] Apr. 5, 2011, no pet.) (mem.

op.). Indeed “it is well-settled that a plaintiff is only required to attempt service at

the address given to the [SOS], and need not make any attempt to serve the defendant

elsewhere.” Dansk Express, LLC v. IPFS Corp., No. 01-22-00621-CV, 2023 WL

4937497, at *6–7 (Tex. App.—Houston [1st Dist.] Aug. 3, 2023, no pet.) (quoting

                                         –11–
Acadian Props. Austin, LLC v. KJMonte Invs., LLC, 650 S.W.3d 98, 109 (Tex.

App.—El Paso 2021, no pet.) (holding plaintiff’s awareness of possible alternative

location where defendant could be found was irrelevant to whether plaintiff used

reasonable diligence in attempting to serve defendant at his registered address)).

Further, reasonable diligence may be shown by evidence that service of process was

attempted but was unsuccessful because the address of the registered office no longer

belonged to the registered agent at that time. Ingram Indus., Inc. v. U.S. Bolt Mfg.,

Inc., 121 S.W.3d 31, 34 (Tex. App.—Houston [1st Dist.] 2003, no pet.) (reasonable

diligence was shown because constable’s return of service was “clear that the

address on the citation was not the actual address of Ingram Industries, but that this

location had been occupied by some other person or entity for the past 10 years”);

Vervoort, 2011 WL 1260077, at *4 (reasonable diligence shown by record evidence

establishing service of process attempted by failed because party no longer lived at

the registered office address); see also Catlin Specialty Ins. Co. v. Montelongo Inc.,

No. SA-12-CV-711-XR, 2012 WL 5183585, at *2 (W.D. Tex. Oct. 18, 2012)

(“Because the registered address is occupied by an entirely different business, it is

clear that any further service attempts at the address would be futile. Thus, the Court

finds that Plaintiff has exercised reasonable diligence in attempting to find the

registered agent of Montelongo Inc. and that Plaintiff's efforts have been

unsuccessful.”).

                                        –12–
      Here, the Colters’ process server attempted to serve HAM, Prairie Capital,

and Huffman at the registered office addresses on file with the Secretary of State and

at the registered agent’s address on file with that office. The process server’s

affidavits establish service of process was attempted at those addresses but failed

because Huffman no longer lived at the Overlook Circle address, a bank occupied

the Westchester Drive address, and neither HAM, Prairie Capital, nor Huffman

maintained offices at or could be found at the Westchester Drive address. Although

the Colters had no obligation to attempt service at the San Jacinto address, the record

also confirms the process server tried to serve the parties at the San Jacinto address

but could not access the apartment building located there. Under this record, we

conclude the Colters exercised reasonable diligence to serve HAM, Prairie Capital,

and Huffman. The Colters were, therefore, entitled to use substituted service on the

secretary of state to serve HAM and Prairie Capital as their agent for service of

process. See TEX. BUS. ORGS. CODE § 5.251(1)(B).

             3.     Service of process on the Secretary of State as HAM
                    and Prairie Capital’s agent for service

      Service of process on the Secretary of State is accomplished by delivering

duplicate copies of the process and any required fee to the Secretary of State. TEX.

BUS. ORGS. CODE § 5.252. When substituted service on the Secretary of State is

allowed, the secretary “is not an agent for serving but for receiving process on the

defendant's behalf.” El Paisano Nw. Highway, Inc. v. Arzate, No. 05-12-01457-CV,

2014 WL 1477701, at *2–3 (Tex. App.—Dallas Apr. 14, 2014, no pet.) (emphasis
                                  –13–
in original) (quoting Campus Invs., Inc. v. Cullever, 144 S.W.3d 464, 466 (Tex.

2004); and citing Big D Transmission & Auto Serv., Inc. v. Rollins, No. 05–11–

01019–CV, 2013 WL 3009718, at *2 (Tex. App.—Dallas June 3, 2013, no pet.)

(mem.op.)). As an agent for receiving process on an entity’s behalf, the Secretary of

State’s receipt of the process gives the entity constructive notice of the lawsuit and

constitutes proper service. El Paisano Nw. Highway, Inc., 2014 WL 1477701, at *2–

3; Amor Real Estate Inv., Inc. v. AWC, Inc., No. 05-15-00887-CV, 2016 WL

2753572, at *1–2 (Tex. App.—Dallas May 10, 2016, no pet.) (mem. op.) (“As an

agent for receiving process on Amor's behalf, the secretary of state's receipt of the

process gave Amor constructive notice of the lawsuit; thus, Amor was properly

served.”).

      Here, the Whitney certificates confirm the Secretary of State received the

service of process for HAM and Prairie Capital as each entity’s agent for service. As

an agent for receiving process on HAM and Prairie Capital’s behalf, the Secretary

of State’s receipt of the process gave HAM and Prairie Capital constructive notice

of the lawsuit. See El Paisano Nw. Highway, Inc., 2014 WL 1477701, at *2–3. They

were, therefore, properly served. See id.; see also Amor Real Estate, 2016 WL

2753572, at *1–2.

             4.     Process forwarded by the Secretary of State to HAM
                    and Prairie Capital

      After service on the Secretary of State, the secretary forwards the process to

the corporation by certified mail, return receipt requested and “addressed to the most
                                         –14–
recent address of the entity on file with the secretary of state.” TEX. BUS. ORGS. CODE

§ 5.253. A certificate by the Secretary of State as to service conclusively establishes

that process was served. See El Paisano Nw. Highway, 2014 WL 1477701, at *2–3

(citing Campus Invs., 144 S.W.3d at 466 (default judgment affirmed following

substituted service on secretary of state where corporation failed to update addresses

for its registered agent and office and did not receive certified mail from secretary

of state)). “Absent fraud or mistake, the [SOS’s] certificate is conclusive evidence

that the [SOS], as agent of [the defendant], received service of process for [the

defendant] and forwarded the service as required by the statute.” Dansk Express,

LLC, 2023 WL 4937497, at *4 (quoting Capitol Brick, Inc. v. Fleming Mfg. Co.,

Inc., 722 S.W.2d 399, 401 (Tex. 1986)).

      The Whitney certificates confirm that, after receiving the service of process

for HAM and Prairie Capital as each entity’s agent for service, the Secretary of State

forwarded the notice of process to HAM and Prairie Capital at the addresses of their

registered agents and registered offices then on file with the Secretary of State. HAM

and Prairie Capital, however, argue the Secretary of State should not have sent the

process to the address of their registered agent or registered offices because those

addresses were “bad” or “dead” addresses. They contend the language in section

5.253 requiring the Secretary of State’s notice of process be “addressed to the most

recent address of the entity on file with the secretary of state” means notice must be

sent to the last filed address of the entity, regardless of whether that address is where

                                         –15–
the registered agent may be served. We find this interpretation flawed and decline to

apply it here.

      HAM and Prairie Capital cite the predecessor statute to section 5.253 to

support their interpretation of the statute. See TEX. BUS. CORP. ACT art. 2.11(B)

(Service of Process on Corporation). Article 2.11(B) provided:

      B. Whenever a corporation shall fail to appoint or maintain a registered
      agent in this State, or whenever its registered agent cannot with
      reasonable diligence be found at the registered office, then the Secretary
      of State shall be an agent of such corporation upon whom any such
      process, notice, or demand may be served. Service on the Secretary of
      State of any process, notice, or demand shall be made by delivering to
      and leaving with him, or with the Deputy Secretary of State, or with
      any clerk having charge of the corporation department of his office,
      duplicate copies of such process, notice, or demand. In the event any
      such process, notice, or demand is served on the Secretary of State,
      he shall immediately cause one of the copies thereof to be forwarded
      by registered mail, addressed to the corporation at its registered office.
      Any service so had on the Secretary of State shall be returnable in not
      less than thirty (30) days.

See TEX. BUS. CORP. ACT, art. 2.11(B) (emphasis added). HAM and Prairie Capital

argue section 5.253 removed the requirement that the Secretary of State serve an

entity at its registered office with the requirement that the entity be served at “the

most recent address of the entity on file with the secretary of state.” We disagree.

      As a preliminary matter, section 5.253 did not replace article 2.11(B). Rather,

article 2.11(B) was codified into sections 5.251, 5.252, and 5.253 of the Texas

Business Organizations Code. TEX. BUS. ORGS. CODE § Disp. Table 1, Editor’s

Notes. Those sections must, therefore, be read together when comparing article

2.11(B) and read in the context of Chapter 5 as a whole. TEX. BUS. ORGS. CODE §§
                                      –16–
5.251, 5.252, 5.253. Under Subchapter E of Chapter 5 of the business organizations

code, each filing entity is required to (1) designate and continuously maintain a

registered agent and registered office for service of process, (2) provide the Secretary

of State with the addresses of the registered agent and registered office, (3) file a

statement of change if the entity changes its registered office, registered agent, or

both, and (4) include in the statement of change any changes to the registered agent’s

name, the entity’s registered office, or the addresses of the registered agent or

registered office. Id. §§ 5.200–.206. Subchapter F’s provisions, in turn, ensure

service of process on an entity that fails to appoint a registered agent, does not

maintain a registered agent, or whose registered agent cannot be found with

reasonable diligence at the registered office of the entity. See id. §§ 5.251–.253. The

purpose of both Subchapters E and F, however, is to effect service on the designated

registered agent of a filing entity at the registered office of that agent and entity. See

generally id. §§ 5.200–.257.

      Under HAM and Prairie Capital’s interpretation of section 5.253, the

Secretary of State would be required to ignore an entity’s filings concerning its

registered agent and registered office in favor of information contained in a more

recent filing that is unrelated to service of process and does not designate or change

a registered agent, registered office, or their accompanying addresses. Such an

interpretation ignores the overarching requirement that corporations maintain a

registered agent and registered office for service of process and keep the addresses

                                          –17–
of both updated with the Secretary of State. See TEX. BUS. ORGS. CODE §§ 5.201–

.202, 5.206(a). These requirements enable “aggrieved citizens to serve the

corporation with a lawsuit.” See Vervoort, 2011 WL 1260077, at *3 (citing

Houston’s Wild W., Inc. v. Salinas, 690 S.W.2d 30, 32 (Tex. App.—Houston [14th

Dist.] 1985, writ refused n.r.e.)). An entity’s principal place of business is not

equivalent to the entity’s address for service of process. See El Paisano Nw.

Highway, 2014 WL 1477701, at *2–3; see also Tex. Underground Utils., Inc. v. Sw.

Bell Tel. Co., No. 01-19-00814-CV, 2021 WL 3356847, at *4 (Tex. App.—Houston

[1st Dist.] Aug. 3, 2021, pet. denied); Catalyst Partners, Inc. v. BASF Corp., No. 02-

10-00377-CV, 2011 WL 2306836, at *1 n.2 (Tex. App.—Fort Worth June 9, 2011,

no pet.) (mem. op.). The statute provides no basis for requiring the Secretary of State

to forward notice to anyone other than an entity’s registered agent at entity’s

registered office. As such, section 5.253’s reference to “the most recent address of

the entity on file with the secretary of state” necessarily means the most recent

address of the entity’s registered agent and registered office for service of process.

See, e.g., El Paisano Nw. Highway, 2014 WL 1477701, at *2 (rejecting entity’s

argument that Secretary of State should have forwarded process to address of entity’s

principal place of business instead of registered agent’s address).

      Service of process on the Secretary of State is accomplished by delivering

duplicate copies of the process and any required fee to the Secretary of State. TEX.

BUS. ORGS. CODE § 5.252. After service on the Secretary of State, the secretary

                                        –18–
forwards the process by certified mail, return-receipt requested to the corporation’s

registered agent at the registered office address. TEX. BUS. ORGS. CODE § 5.253; see

Amor Real Estate, 2016 WL 2753572, at *1–2 (service conclusively established

where Secretary of State forwarded section 2.252 process to entity’s registered agent

at the registered office address); see also El Paisano Nw. Highway, 2014 WL

1477701, at *2 (same); G.F.S. Ventures, Inc. v. Harris, 934 S.W.2d 813, 818 (Tex.

App.—Houston [1st Dist.] 1996, no writ) (upholding default judgment where record

demonstrated service via the Secretary of State on company’s registered agent, and

company failed to notify Secretary of State of registered agent's change of address).

A certificate of service from the Secretary of State conclusively establishes that

process was served. Campus Invs., 144 S.W.3d at 466.

      In this case, we conclude the Whitney certificates constitute conclusive proof

that the Secretary of State, as agent of HAM and Prairie Capital, received service of

process for HAM and Prairie Capital and forwarded the service of process as

required by the statute. We overrule HAM and Prairie Capital’s first issue.

      B.     Amended motion for default judgment

      In their second issue, HAM and Prairie Capital argue the default judgment is

invalid because it references only the Colter’s “Motion for Entry of Default

Judgment,” which was superseded by the April 14 Amended Motion. According to

HAM and Prairie Capital, the default judgment must be vacated because the trial

court granted a superseded or “dead” motion. We disagree.

                                       –19–
      When the Colters filed the April 14 Amended Motion, that became the

controlling motion before the trial court for ruling. See TEX. R. CIV. P. 65; Retzlaff

v. Tex. Dep’t of Crim. Just., 135 S.W.3d 731, 737 (Tex. App.—Houston [1st Dist.]

2003, no pet.) (op. on reh’g). Indeed, once a motion is amended, the prior motion

becomes “a nullity.” Retzlaff, 135 S.W.3d at 737. Accordingly, the April 14

Amended Motion was the only live motion at the time the trial court rendered default

judgment in favor of the Colters.

      We may presume a trial court considered all relevant motions properly before

it if the order either is silent as to what the trial court considered or recites that the

trial court reviewed the pleadings and evidence before it. King v. Regions Bank, No.

02-15-00201-CV, 2016 WL 2586663, at *2 (Tex. App.—Fort Worth May 5, 2016,

no pet.) (mem. op.) (first citing Retzlaff, 135 S.W.3d at 737–38; and then citing

Milam v. Nat’l Ins. Crime Bureau, 989 S.W.2d 126, 129 (Tex. App.—San Antonio

1999, no pet.)). Here, the default judgment states the trial court “considered the

pleadings, evidence and filings in this matter.” The live motion was filed April 14,

2022. The trial court signed and rendered the default judgment on April 25, 2022.

Regardless of what pleading the trial court referred to in the default judgment, it is

clear from this record the April 14 Amended Motion was the one upon which default

judgment was granted. See Retzlaff, 135 S.W.3d at 738; see also Reg’l Specialty

Clinic, P.A. v. S.A. Randle & Assocs., P.C., 625 S.W.3d 895, 900, n.1 (Tex. App.—

Houston [14th Dist.] 2021, no pet.) (amended hybrid motion was the live motion

                                          –20–
granted by the trial court even though the judgment referred to the pleading as the

“Motion for Summary Judgment.”); Williams v. Mutia, No. 01-19-00340-CV, 2021

WL 3729312, at *3 (Tex. App.—Houston [1st Dist.] Aug. 24, 2021, no pet.)

(proximity in time between filing second no-evidence motion for summary judgment

and the trial court’s ruling supports conclusion the trial court granted the second no-

evidence motion despite referring to the motion in the judgment as “Defendant's

Motion for Summary Judgment”).

      C.     Award of unliquidated damages

      In their fourth issue, HAM and Prairie Capital argue the default judgment

must be reversed because the trial court improperly awarded unliquidated damages

to the Colters based only on affidavit testimony and without holding a hearing and

receiving evidence on damages. We disagree.

      A no-answer default judgment operates as an admission of the material facts

alleged in the plaintiff’s petition, except for unliquidated damages. Holt Atherton

Indus., 835 S.W.2d at 83; Morgan v. Compugraphic Corp., 675 S.W.2d 729, 731

(Tex. 1984). Under rules of procedure 241 and 243, proof is required only with

respect to damages which are either unliquidated or not proven by a written

instrument. TEX. R. CIV. P. 241, 243.

      If a claim is unliquidated or not proved by an instrument in writing, the court

must hear evidence as to damages. TEX. R. CIV. P. 243. The requirement that the

court “hear evidence” may be satisfied by affidavits submitted in support of a motion

                                        –21–
for default judgment. Chloe’s Concepts, LLC v. Clear Rainbow, Inc., No. 05-20-

00484-CV, 2021 WL 5998006, at *4 (Tex. App.—Dallas Dec. 20, 2021, no pet.)

(mem. op.) (first citing Tex. Com. Bank v. New, 3 S.W.3d 515, 516–17 (Tex. 1999)

(per curiam) (in no-answer default judgment, affidavits, as unobjected-to hearsay,

constitute probative evidence and satisfy Rule 243’s requirement for evidence of

unliquidated damages); then citing Ingram Indus., 121 S.W.3d at 36 (holding

affidavit in support of motion for default judgment satisfied Rule 243’s hearing

requirement without need of holding evidentiary hearing); and then citing Barganier

v. Saddlebrook Apartments, 104 S.W.3d 171, 173 (Tex. App.—Waco 2003, no pet.)

(holding evidence of unliquidated damages may be supplied by affidavits filed in

support of motion for default judgment).

      In their pleadings, the Colters sought economic damages for loss of furniture

due to the infestation, mental anguish damages, and statutory damages and penalties

for bad faith retention of their security deposit. The Colters submitted affidavits and

documents as evidence of their damages. The trial court did not conduct a formal in

court hearing on the motion for default judgment. Instead, the trial court entered

judgment after considering “the pleadings, evidence and filings in this matter.” The

trial court “deemed admitted” the allegations in the first amended petition and

“admitted into evidence and considered the affidavits filed in support of the motion.”

Citing Rule 243, HAM and Prairie Capital argue the trial court was required to hold

a hearing and receive evidence on damages before rendering default judgment

                                        –22–
because the damages sought by the Colters were unliquidated. See TEX. R. CIV. P.

243. This is incorrect. The trial court admitted the affidavits into evidence and

considered the affidavits when granting the motion for default judgment. Thus, even

if the damages are unliquidated, the trial court heard evidence as to the amount of

damages. See Chloe’s Concepts, LLC, 2021 WL 5998006, at *4 (requirement a court

“hear evidence” is satisfied by affidavits submitted in support of default judgment

motion); see also New, 3 S.W.3d at 517 (approving use of affidavits to establish

unliquidated damages under Rule 243). No formal hearing was required, and the

damages evidence submitted with the default judgment motion, including the

affidavits of the Colters and their counsel, was sufficient to support an award of

damages. Krawiec v. Holt, No. 05-17-00307-CV, 2018 WL 2126858, at *2 (Tex.

App.—Dallas May 7, 2018, no pet.) (mem. op.) (“When damages are unliquidated,

the trial court must hear evidence as to damages, TEX. R. CIV. P. 243; however, such

damages need not be presented with testimony. . . . Affidavits will satisfy the

evidence requirement of Rule 243.”) (internal citation omitted). The trial court did

not err by failing to hold a separate hearing on damages. We overrule HAM and

Prairie Capital’s fourth issue.

      D.     Sufficiency of the evidence to support mental anguish
             damages.

      In their fifth issue, HAM and Prairie Capital argue the award of mental

anguish damages should be vacated because the Colters presented “[n]o competent

                                       –23–
evidence of mental anguish.” We agree the Colters’ evidence was legally insufficient

to support the judgment’s award of mental anguish damages.

      The legal and factual sufficiency of the evidence to support an award of

unliquidated damages may be challenged on appeal from a no-answer default

judgment. Argyle Mech., Inc. v. Unigus Steel, Inc., 156 S.W.3d 685, 687 (Tex.

App.—Dallas 2005, no pet.). Where a specific attack is made upon the sufficiency

of the evidence to support the trial court’s determination of damages in a default

judgment, the appellate court must review the evidence produced. Dawson v. Briggs,

107 S.W.3d 739, 751 (Tex. App.—Fort Worth 2003, no pet.).

      HAM and Prairie Capital challenge the legal sufficiency of the evidence to

support the award of mental anguish damages. We will sustain a legal sufficiency or

“no evidence” challenge if the record shows one of the following: (1) a complete

absence of a vital fact; (2) rules of law or evidence bar the court from giving weight

to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a

vital fact is no more than a scintilla; or (4) the evidence establishes conclusively the

opposite of the vital fact. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005).

We consider the evidence in the light most favorable to the judgment and indulge

every reasonable inference that supports it. See id. at 821–22.

      “The process of awarding damages for amorphous, discretionary injuries such

as pain and suffering, physical impairment, and mental anguish is inherently difficult

because the alleged injury is a subjective, unliquidated, nonpecuniary loss.” Cate v.

                                         –24–
Posey, No. 05-17-01216-CV, 2018 WL 6322170, at *4 (Tex. App.—Dallas Dec. 4,

2018, no pet.) (mem. op.) (citing Ten Hagen Excavating, Inc. v. Castro-Lopez, 503

S.W.3d 463, 486 (Tex. App.—Dallas 2016, pet. denied)). The presence or absence

of pain, either physical or mental, is an inherently subjective question because the

process is not readily susceptible to objective analysis. Dawson, 107 S.W.3d at 751.

Accordingly, the trier of fact is given discretion when determining such damages.

Sw. Tex. Coors, Inc. v. Morales, 948 S.W.2d 948, 951–52 (Tex. App.—San Antonio

1997, no writ). However, an award for mental anguish damages must be supported

either by direct evidence of the nature, duration, and severity of the plaintiff’s mental

anguish, thereby establishing a substantial interruption in the plaintiff's daily routine,

or by circumstantial evidence of a high degree of mental pain and distress that is

greater than mere worry, anxiety, vexation, embarrassment, or anger. Parkway Co.

v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995). In addition to evidence of the

existence of compensable mental anguish, there must also be some evidence to

justify the amount awarded. Saenz v. Fid. & Guar. Ins., 925 S.W.2d 607, 614 (Tex.

1996).

      Here, the Colters rely on their affidavit testimony to support the award of

mental anguish damages. Maurice and Ni-Ida’s affidavits each include one

paragraph explaining the mental anguish they suffered because of the cockroach

infestation and the landlord’s failure to remedy the infestation. Maurice stated:

                                          –25–
      I have been caused mental anguish as a result of the wrongs by the
      Defendants as described in this affidavit. Our family’s possessions have
      been ruined due to the insects that the landlord failed to address. Living
      among insects who ruined our belongings had been a deeply upsetting
      event for me and my family. We had to endure this because the landlord
      did not tell us the truth about the unit and did not remedy the issue
      despite written requests.

Similarly, Ni-Ida stated:

      My husband and I each experienced mental anguish as a result of
      having to live among insects which the landlord could not remedy. The
      insects ruined our belongings. They reduced the value of our apartment
      to us. We each experienced severe anguish as a result of having to live
      among insects in this matter. We request an award of $ 5,000 each for
      our mental anguish.

      While those statements provide some evidence of the Colters’ belief they

suffered mental anguish, the testimony does not show the nature, duration, and

severity of the mental anguish, a substantial interruption in the Colters’ daily routine,

or a high degree of mental pain and distress that is greater than mere worry, anxiety,

vexation, embarrassment, or anger. The affidavits also include no evidence to justify

the amount awarded. We, therefore, conclude the Colters’ affidavit testimony was

legally insufficient to support the award of mental anguish damages and sustain

HAM and Prairie Capital’s fifth issue in part by reversing the mental anguish

damages awarded to the Colters.

      We do not, however, render a take nothing judgment against the Colters as to

the mental anguish damages. “[W]hen an appellate court sustains a no evidence point

after an uncontested hearing on unliquidated damages following a no-answer default

judgment, the appropriate disposition is a remand for a new trial on the issue of
                                         –26–
unliquidated damages.” Holt Atherton Indus., 835 S.W.2d at 86; Armstrong v.

Benavides, 180 S.W.3d 359, 364 (Tex. App.—Dallas 2005, no pet.) (explaining that,

although appellate courts generally reverse and render when sustaining a legal

sufficiency challenge, “an exception is made in cases involving default judgments

because the facts have not been fully developed”). When, as in this case, an appellate

court reverses some but not all the categories of damages awarded by the trial court

in a no-answer default judgment, remand is necessary only as to the categories of

damages for which the evidence presented was insufficient. Cate, 2018 WL

6322170, at *4 (finding evidence insufficient to support amount of past and future

medical expenses awarded and remanding for new trial solely on those damages);

Dawson, 107 S.W.3d at 755 (applying Holt Atherton Industries and remanding for

new trial on only those damage issues for which the court concluded were supported

by insufficient evidence). Here, remand is necessary for a new trial on mental

anguish damages because the evidence of those damages presented below was

insufficient to support the award.

      We must also remand for a recalculation of additional damages awarded under

the DTPA because the trial court’s calculation of additional damages was based in

part on its award of mental anguish damages. See TEX. BUS. & COM. CODE §

17.50(b)(1) (permitting award of additional damages up to three times the amount

of actual damages, including mental anguish damages); see also Houston Livestock

Show & Rodeo, Inc. v. Hamrick, 125 S.W.3d 555, 584 (Tex. App.—Austin 2003, no

                                        –27–
pet.) (DTPA additional damages included award for past mental anguish); In re

Columbia Med. Ctr. of Las Colinas, 306 S.W.3d 246, 248 (Tex. 2010) (orig.

proceeding) (“[D]amages awards that are statutorily capped are required to be

recalculated when the actual damages against which they are measured are reduced

on appeal.”). Accordingly, we reverse and remand for a new trial on the issue of

mental anguish damages and a recalculation of additional damages under the DTPA.

See Cate, 2018 WL 6322170, at *4; see also Dawson, 107 S.W.3d at 755.

II.   Denial of Motion for New Trial

      HAM and Prairie Capital also challenge the trial court’s denial of their motion

for new trial. They contend the trial court abused its discretion because they satisfied

the Craddock elements. See Craddock, 133 S.W.2d at 126. Under Craddock, a new

trial is warranted when (1) the failure to appear was not intentional or the result of

conscious indifference, but was the result of an accident or mistake, (2) the motion

for new trial sets up a meritorious defense, and (3) granting the motion will occasion

no delay or otherwise injure the plaintiff. B. Gregg Price, P.C. v. Series 1 - Virage

Master LP, 661 S.W.3d 419, 424 (Tex. 2023) (citing Craddock, 133 S.W.2d at 126).

The Colters maintain the trial court properly denied the motion for new trial because

HAM and Prairie Capital failed to satisfy all three Craddock elements. We agree

with the Colters.

      HAM and Prairie Capital provided no evidence showing their failure to

answer was not intentional or the result of conscious indifference but was due to a

                                         –28–
mistake or accident. Rather, in the trial court and in this Court they argue only that

they failed to answer because the Colters had the Secretary of State serve them at a

“bogus” address. HAM and Prairie Capital, thus, rely solely on their incorrect

argument that the Colters should have served them with process at the address of

their principal office.6 As we concluded above, however, neither the Colters nor the

Secretary of State was under the obligation to attempt service on HAM and Prairie

Capital at the address of their principal offices. On the contrary, once the Secretary

of State received the process, HAM and Prairie Capital had constructive notice of

the lawsuit and were properly served. See El Paisano Nw. Highway, Inc., 2014 WL

1477701, at *2–3; see also Amor Real Estate Inv., 2016 WL 2753572, at *1–2.

Moreover, the Secretary of State properly attempted service on HAM and Prairie

Capital at the addresses of their registered offices and registered agents, which were

on file with the Secretary of State.

        The Texas Business Corporation Act requires that all corporations shall

“designate and continuously maintain” a registered office and a registered agent.

TEX. BUS. ORGS. CODE § 5.201. A corporation “may change its registered office, its

registered agent, or both by filing a statement of the change. . . .” Id. § 5.202. These

provisions impose an affirmative duty on the corporation to ensure the Secretary of

State has current and accurate information on the whereabouts of the corporation’s

    6
     HAM and Prairie Capital assert the address of their respective principal offices is 4201 San Jacinto,
#112, Dallas, TX 75204.
                                                 –29–
registered office and the identity of its registered agent. Tex. Underground Utils.,

2021 WL 3356847, at *4; Catalyst Partners, Inc., 2011 WL 2306836, at *1 n.2

(explaining, although defendant complained plaintiff asked Secretary of State to

serve defendant at address of defendant’s registered agent when plaintiff knew

registered agent’s address “was not good,” defendant had “statutory duty to update

its address for its registered agent”).

       In their motion for new trial, HAM and Prairie Capital failed to articulate any

excuse for failing to timely inform the Secretary of State of a change of address for

its registered office for service. Indeed, they do not even argue any such change

occurred. We reject HAM and Prairie Capital’s argument that they were not served

and were denied due process of law. The Colters complied with the method of

service authorized by statute. HAM and Prairie Capital were the victims of their own

negligence in not notifying the Secretary of State of any change to their registered

agent or registered office. See, e.g., Glob. Services Inc. v. G & W Leasing Co., No.

01-94-01234-CV, 1996 WL 608904, at *7 (Tex. App.—Houston [1st Dist.] Oct. 24,

1996, writ denied) (mem. op.) (“Global was the victim of its own negligence in not

notifying the Secretary of State of any change to its registered agent or registered

office.”).

       Under this record, we conclude the Colters established as a matter of law that

HAM and Prairie Capital’s own negligence in not complying with the duties

imposed upon them by statute prevented them from responding to the lawsuit. See

                                          –30–
Tankard-Smith, Inc. Gen. Contractors v. Thursby, 663 S.W.2d 473, 476 (Tex.

App.—Houston [14th Dist.] 1983, writ ref’d n.r.e.) (“the failure of the method of

service was the result of the corporation’s own failure to comply with the statutory

requirements which are designed to assure it of notice of pending suits.”). As such,

they did not meet the first Craddock factor. The trial court did not abuse its discretion

by denying the motion for new trial. We overrule HAM and Prairie Capital’s third

issue.

III.     Remaining issues

         In their final issues, HAM and Prairie Capital assert the underlying proceeding

is subject to mandatory venue in Denton County, and they should be awarded costs.

The trial court did not consider the merits of HAM and Prairie Capital’s motion to

transfer venue. Rather, the court denied the motion as moot when it denied the

motion for new trial. The merits of the venue motion are, therefore, not before us on

appeal. We overrule the sixth issue.

         As for the award of appellate costs, HAM and Prairie Capital ask this Court

to award them appellate costs. We generally award appellate costs to the prevailing

party. TEX. R. APP. P. 43.4. Here, we have affirmed the default judgment as to

liability and most of the damages awarded. The Colters have, therefore, prevailed

and will be awarded their appellate costs. We overrule HAM and Prairie Capital’s

seventh issue.

                                          –31–
                                  CONCLUSION

      Under this record, we conclude HAM and Prairie Capital were properly served

and, as a result, the default judgment was proper. We also conclude HAM and Prairie

Capital are not entitled to a new trial as to liability, the $2,712 award of economic

damages, the $1,000 award of statutory damages, their liability for additional

damages under section 17.50 of the DTPA, or the awards of attorney’s fees, costs,

and interest. However, the Colters’ evidence of mental anguish damages was

insufficient to support the amounts awarded in the judgment. We, therefore, reverse

the award of mental anguish damages, reverse the calculation of additional damages

under the DTPA, remand for a new trial on mental anguish damages and to

recalculate additional damages, and affirm the default judgment in all other respects.

                                           /Robbie Partida-Kipness/
                                           ROBBIE PARTIDA-KIPNESS
220779F.P05                                JUSTICE

                                        –32–
                                    S
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                  JUDGMENT

HUFFMAN ASSET                                  On Appeal from the County Court at
MANAGEMENT, LLC AND                            Law No. 2, Dallas County, Texas
PRAIRIE CAPITAL, LLC,                          Trial Court Cause No. CC-21-03561-
Appellants                                     B.
                                               Opinion delivered by Justice Partida-
No. 05-22-00779-CV           V.                Kipness. Justices Reichek and
                                               Breedlove participating.
MAURICE COLTER AND NI-IDA
COLTER, Appellees

       In accordance with this Court’s opinion of this date, the judgment of the trial
court is AFFIRMED in part and REVERSED in part. We REVERSE that portion
of the trial court’s judgment awarding appellees mental anguish damages,
REVERSE the calculation of additional damages under the DTPA, and
REMAND this cause to the trial court for a new trial on mental anguish damages
and to recalculate additional damages. In all other respects, the trial court’s
judgment is AFFIRMED.

    It is ORDERED that appellees MAURICE COLTER AND NI-IDA
COLTER recover their costs of this appeal from appellants HUFFMAN ASSET
MANAGEMENT, LLC AND PRAIRIE CAPITAL, LLC.

Judgment entered this 7th day of November 2023.

                                        –33–