Court Opinion

ID: 5118891
Source: CourtListenerOpinion
Date Created: 2021-10-18 07:14:54.387004+00
Date Added: 2024-06-11T08:22:10.090383
License: Public Domain

In the
                Court of Appeals
        Second Appellate District of Texas
                 at Fort Worth
              ___________________________
                   No. 02-20-00325-CV
              ___________________________

PHARUS FUNDING LLC AS ASSIGNEE OF LHR, INC., Appellant

                            V.

                SHERI L. SUSON, Appellee

          On Appeal from County Court at Law No. 3
                   Tarrant County, Texas
               Trial Court No. 2006-043006-3

           Before Kerr, Birdwell, and Womack, JJ.
          Memorandum Opinion by Justice Womack
                           MEMORANDUM OPINION

                                  I. INTRODUCTION

      In a single issue, Appellant Pharus Funding LLC, as assignee of LHR, Inc.,

appeals the trial court’s order vacating and quashing its previously granted application

for writ of scire facias to revive a dormant default judgment against Appellee Sheri L.

Suson. We affirm.

                                  II. BACKGROUND

      We have set out below a chronology of this case’s events.

A. October 19, 2006

      LHR, Inc. sued Suson for $6,202.51 in credit card debt and prevailed in a

default judgment entered on October 19, 2006.           The trial court also assessed

prejudgment interest of 6% (December 29, 2003–October 19, 2006); postjudgment

interest of 6% thereafter until paid; and $1,500 in attorney’s fees and court costs

bearing 8.25% interest from October 19, 2006 until paid.

      The default judgment listed an Azle address for Suson. According to Suson,

she moved from the Azle address (a rental property) in 20091 and bought a house in

2013 with no knowledge of the 2006 judgment against her.2

      1
       Suson stated in her unsworn declaration that she had never owned the Azle
property, and she attached a copy of the Tarrant County Appraisal District’s owner
information supporting this assertion. She also attached a copy of LHR, Inc.’s 2006
motion for substituted service; the affidavit in which the process server stated that the
Tarrant County Appraisal District stated that she owned the Azle property; and the

                                           2
       The judgment became dormant on October 19, 2016. See Tex. Civ. Prac. &

Rem. Code Ann. § 34.001(a) (providing that if a writ of execution is not issued within

10 years after the rendition of a judgment of a court of record or justice court, the

judgment is dormant and execution may not be issued on it unless it is revived).

Accordingly, the judgment’s expiration date, if it were not revived, would be

October 19, 2018. See id. § 31.006 (stating that a dormant judgment may be revived

by scire facias or by an action on debt brought no later than the second anniversary of

the date that the judgment becomes dormant).

B. October 20, 2016–May 23, 2018

       On May 23, 2018, approximately five months before the dormant judgment’s

expiration date, Pharus filed an application for writ of scire facias to revive it, asserting

that the dormant judgment had not been satisfied. See id. Pharus sought $8,747.59—

not $6,202.51—as the “Amount of Judgment.”3               The application’s certificate of

service states that it was sent to Suson at the Azle address listed in the 2006 judgment

trial court’s August 22, 2006 order granting substituted service. Suson stated that she
was never served and did not learn about the default judgment until June 2020.

       Suson married in May 2015 and changed her last name to Winkler. To avoid
       2

confusion, we will continue to refer to Suson by her maiden name.
       3
        Pharus listed 6% as the pre- and postjudgment interest rates but no amount
for the attorney’s fees or costs awarded in the 2006 judgment. It is unclear to us how
Pharus reached the $8,747.59 amount it sought in its application for writ of scire
facias.

                                             3
by “certified U.S. mail, return receipt requested” on May 15, 2018. The record does

not contain the receipt showing service or the certified mail tracking number.

      Pharus attached to the application a copy of LHR, Inc.’s 2006 default judgment

against Suson, but this copy, which was stamped “conform and return,” although it

otherwise matched the October 19, 2006 judgment contained elsewhere in the record,

showed different handwriting for the written-in portions (amount of attorney’s fees

and date) and the judge’s signature appears to be a stamp.4

      On the same day that it filed its application, Pharus also filed a notice of

assignment of judgment. The notice stated that LHR, Inc. had assigned its interests in

the judgment to Millenium Financial Group, L.L.C., which had then assigned its

interests in the judgment to Pharus.

C. May 24, 2018–July 7, 2020

      On June 9, 2020, Pharus filed a notice of change in ownership and designation

of new lead counsel, informing the trial court that the 2006 judgment had been

assigned to it and that it was now represented by a different law firm from that which

had originally filed the application. Pharus included as exhibits to the notice: (1) a

copy of the assignment agreement between LHR, Inc. and Millenium Financial

Group, L.L.C., which was made effective on November 26, 2012, but signed

      4
       No explanation has been provided for the discrepancy, but the credit card
account number, amount of damages, and attorney’s fees are the same in each
version.

                                           4
January 4, 2013; and (2) a copy of the transfer and assignment agreement between

Millenium Financial Group, L.L.C. and Pharus, which was made effective on June 1,

2017, but signed June 8, 2017. The notice’s certificate of service states that Suson was

served with the notice by first class mail on June 8, 2020, at the same Azle address

listed in the scire-facias application’s certificate of service.

       On July 7, 2020, Pharus filed its notice of hearing on its application to revive

judgment. According to the certificate of service included in the notice, Suson was

served with the notice on June 30, 2020, via certified mail, return receipt requested,

sent to a Richland Hills address. The certificate of service includes a certified mail

tracking number.

D. July 8, 2020–September 18, 2020

       On July 16, 2020, over two years after Pharus filed its application, the trial

court held a hearing on the application. Suson represented herself pro se at the

hearing.

       Pharus’s counsel began by explaining that “the prior law firm filed an

application for writ of scire facias on May 23rd of 2018,” and that upon reviewing the

file after entering an appearance, “it was apparent that the application was never

presented to the Court to get an order to get the writ of scire facias delivered and

served on the defendant[].” He then argued that because the application had been

timely filed, “the writ of scire facias . . . should be issued and served on the

defendant[] so judgment can be formally revived.”

                                               5
       Suson replied that until June 2020, she had been unaware of the 2006 judgment

or the scire-facias proceedings.5 She asked for a continuance so that she could hire

counsel. The trial court granted Pharus’s application but urged Suson to hire counsel.

The writ issued on July 28, 2020, and was executed two days later.

       Suson filed a motion for reconsideration in which she argued that Pharus had

failed to timely serve her with the application and that the trial court had not granted

the application “until almost another twenty months after [the] two-year deadline had

passed.” Suson complained that the trial court should not have granted Pharus’s

application because the writ was not issued before the second anniversary of the date

that the judgment became dormant and because Pharus had failed to diligently

prosecute its application for over two years after it was filed. To her motion, Suson

attached her unsworn declaration in which she stated that she did not receive Pharus’s

application for writ of scire facias until June 2020. Pharus did not file a response or

otherwise show that it had actually served Suson with the application prior to

June 2020. See generally Tex. R. Civ. P. 21a(e) (stating that a certificate of service “shall

be prima facie evidence of the fact of service” but that nothing precludes a party from

offering proof that the document was not received); In re E.A., 287 S.W.3d 1, 5 (Tex.

2009) (“The presumption of service under Rule 21a ‘is not “evidence” and it vanishes

       5
        Suson stated, “I just became aware of the original judgment from 2006 when I
received the letter dated June 26th of this year.” The record does not contain a copy
of the June 26, 2020 letter.

                                             6
when opposing evidence is introduced that [a document] was not received.’” (quoting

Cliff v. Huggins, 724 S.W.2d 778, 780 (Tex. 1987)).

      At the hearing on Suson’s motion, Suson’s counsel argued that while Pharus

had filed the application within the two-year period, no further activity in the case had

occurred until “20 months after the expiration” of the two-year period, demonstrating

that Pharus had not diligently prosecuted the case. The trial court also referenced the

exercise of diligence and stated, “It’s not simply that you get to file the writ and then

wait forever to do something on it.”6 The trial court granted Suson’s motion, vacated

its earlier order “in the interest of justice and fairness,” quashed the issuance of the

earlier writ, denied Pharus’s application, and dismissed Pharus’s application with

prejudice. Pharus then appealed.

                                   III. DISCUSSION

      In its single issue, Pharus argues that it met the statutory requirements to obtain

a writ of scire facias and complains that Section 31.006 contains no procedural guide

to litigants “to ascertain the parameters by which” scire facias may be obtained.

Suson responds that the trial court did not abuse its discretion by denying Pharus’s

application when the record is “devoid of the kind of diligence that would ordinarily

merit the tolling of the limitations period” and Pharus “failed to prosecute the

      6
        During the hearing, the trial court mentioned a CLE article by Michael J. Scott.
Pharus included a copy of that article in the appendix of its appellate brief. See
Michael J. Scott, Renewal and Revival of Judgments, State Bar of Tex. Prof. Dev. Program,
Collections and Creditors’ Rights Course 13 (2006).

                                            7
application for more than twenty months after the applicable limitations period had

expired.”

       As explained in detail below, we agree with Suson. Pharus was required to

exercise diligence in pursuing its remedies with respect to the dormant judgment.

Because the record instead shows a decided lack of diligence, the trial court was

within its rights to vacate the writ.

A. Scire-Facias Procedure to Revive Dormant Judgments

       Civil Practice and Remedies Code Section 34.001(a) provides that if a writ of

execution is not issued within 10 years after the rendition of a judgment, the judgment

becomes dormant, and execution may not be issued on it unless the judgment is

revived. Tex. Civ. Prac. & Rem. Code Ann. § 34.001(a); Keith M. Jensen, P.C. v. Briggs,

No. 02-14-00096-CV, 2015 WL 1407357, at *2 (Tex. App.—Fort Worth Mar. 26,

2015, no pet.) (mem. op.). A dormant judgment “is one which has not been satisfied

or extinguished by lapse of time, but which has remained so long unexecuted that

execution cannot now be issued upon it without first reviving the judgment.”

Raymond K. Oukrop, DDS, P.C. v. Tatsch, No. 03-12-00721-CV, 2014 WL 3734192, at

*3 (Tex. App.—Austin July 23, 2014, no pet.) (mem. op.).

       A dormant judgment “may be revived by scire facias or by an action on debt

brought no later than the second anniversary of the date that the judgment becomes

dormant.” Tex. Civ. Prac. & Rem. Code Ann. § 31.006; Tatsch, 2014 WL 3734192, at

*3. “Scire facias” refers both to a judicial writ based on some matter of record—such

                                          8
as a judgment—and to a proceeding in which the person against whom it is brought

must “show cause why the party bringing it should not have advantage of such

record.” Pharus Funding, LLC v. Garcia, No. 01-20-00411-CV, 2021 WL 3556679, at

*1 n.4 (Tex. App.—Houston [1st Dist.] Aug. 12, 2021, no pet. h.) (mem. op.); see Tex.

R. Civ. P. 151–152, 154 (identifying circumstances under which scire facias may issue

and its requisites); see also Tex. Code Crim. Proc. Ann. art. 22.05 (addressing scire

facias as to bail bond sureties and requiring “[c]itation as in [c]ivil [a]ctions”); 66 Tex.

Jur. 3d Scire Facias § 1 (“The purpose of the writ is to give notice to the defendant of

an application for an award or execution.”).

       “The scire facias and returns thereon, provided for in this section, shall conform

to the requisites of citations and returns thereon, under the provisions of these rules.” Tex. R. Civ.

P. 154 (emphasis added); Garcia, 2021 WL 3556679, at *2 (listing Tex. R. Civ. P. 15–

17 as procedures applicable to all writs and process); see also Ross v. Am. Radiator &

Standard Sanitary Corp., 507 S.W.2d 806, 809 (Tex. App.—Dallas 1974, writ ref’d n.r.e.)

(“The mere presentation of a petition to the clerk for filing is not sufficient to

interrupt or toll the statute of limitations; there must follow a diligent effort to secure

issuance [a]nd service of citation.” (citing Rigo Mfg. Co. v. Thomas, 458 S.W.2d 180, 182

(Tex. 1970)). As stated in the CLE article included in Pharus’s appellate appendix,

“Plaintiff must serve the defendant with citation and a copy of the motion to revive

judgment by scire facias, and demonstrate such service through a return of service

filed with the court.” Scott, supra n.6 at 10 (referencing Rule of Civil Procedure 154).

                                                  9
We review de novo the trial court’s decision on an application for a writ of scire

facias. Garcia, 2021 WL 3556679, at *2.

B. Relevant Case Law

       A review of very recent case law shows us that, colloquially speaking, this is not

Pharus’s first scire-facias rodeo. See id. at *1; see also Pharus Funding LLC as Assignee of

LHR, Inc. v. Baker, No. 14-21-00338-CV, 2021 WL 3628981, at *1 (Tex. App.—

Houston [14th Dist.] Aug. 17, 2021, no pet. h.) (mem. op.) (dismissing for want of

jurisdiction based on untimely notice of appeal); Pharus Funding, LLC v. Solley, No. 06-

20-00090-CV, 2021 WL 1680206, at *1 (Tex. App.—Texarkana Apr. 29, 2021, no

pet.) (mem. op.).

       In Solley, before dismissing Pharus’s appeal for want of jurisdiction because the

record showed no final appealable judgment, our sister court set out the scire-facias

procedural steps as follows:

       First, the judgment creditor files an application to revive the dormant
       judgment, obtaining the issuance of a writ of scire facias requiring the
       judgment debtors to appear and show cause why the judgment should
       not be revived, and obtaining service of the writ on the judgment
       debtors as required for all writs and process. After the judgment debtor
       has answered, or after the time for filing an answer has expired, the
       creditor may set a hearing on its application to revive the dormant
       judgment and obtain an order reviving the judgment.

2021 WL 1680206, at *1, *3 (citations omitted). The court explained that the scire-

facias proceeding ensures that the judgment debtor has proper notice of the judgment

creditor’s application to revive the dormant judgment. Id. at *1 n.3. Through the

                                            10
requirement that the writ of scire facias be served in accordance with the Texas Rules

of Civil Procedure governing the service of writs, the judgment debtor is ensured of

receiving actual notice of the application as well as afforded the opportunity to assert

any defenses it may have to the judgment’s revival, such as payment. Id. But cf. Scott,

supra n.6, at 10 (noting contrary authority in Schluter v. Sell, 194 S.W.2d 125, 130 (Tex.

App.—Austin 1946, no writ)).7

      In Garcia, the trial court denied Pharus’s application for writ of scire facias

based on Pharus’s failure to follow the appropriate procedure. 2021 WL 3556679, at

*2–3. Pharus had included a certificate of service in its application in which it stated

that it had served Garcia “by certified U.S. mail, return receipt requested,” on May 17,

2018, and—as in the instant case—it had attached a copy of a dormant judgment

awarded to LHR, Inc., a notice of change in ownership, and assignment agreements.

Id. at *1. After the trial court denied the application, Pharus argued on appeal that

service of its application only had to comply with a method under Rule of Civil

Procedure 21a. Id. at *2.

      7
       In Schluter, the Austin court stated that a proceeding to obtain execution of a
dormant judgment is not a new suit but “merely a proceeding or subsequent step to
enforce a judgment wherein the defendant has already been cited and appeared, and
reasonable notice is all that is required to support the judgment of revival or to
enforce execution of the judgment.” 194 S.W.2d at 130. We note that Schluter’s
“reasonable notice” standard may have been implicitly overruled by the Austin court
in Cornejo v. Int’l Bank of Commerce, No. 03-21-00019-CV, 2021 WL 4296416, at *1, *4
(Tex. App.—Austin Sept. 22, 2021, no pet. h.) (mem. op.), discussed below, in which
the court addressed service of process in the scire-facias context.

                                           11
       Our sister court disagreed, observing that while Section 31.006 does not set out

a procedure for obtaining the revival of a dormant judgment by scire facias, Rule of

Civil Procedure 154 expressly requires conformance with the requisites of citations

and returns in an application for writ of scire facias. Id. (“Pharus may not ignore its

duty to comply with Texas Rule of Civil Procedure 154 simply because the procedure

outlined in that rule is not reiterated in the statute.”). The court held, “Because [R]ule

154 unambiguously applies to civil proceedings for writs of scire facias without

limitation, we conclude that service of an application for a writ of scire facias for

revival of a dormant judgment must comply with that rule.” Id. at *3. On filing an

application for a writ of scire facias, the applicant must ask the court clerk for issuance

of citation, and the applicant is responsible for obtaining service of the citation. Id.

(citing Tex. R. Civ. P. 99). Because Pharus had failed to do so, the court held that the

trial court did not err by denying its application. Id.

       The Austin court has likewise acknowledged conformity with the Rules of Civil

Procedure regarding service of process in a scire-facias case. See Cornejo, 2021 WL

4296416, at *1.     In Cornejo, the defendant admitted that the bank’s scire-facias

application was timely filed on April 3, 2020. Id. at *1, *5. The county clerk issued

citation twenty-four days later, and in July 2020, the bank sought substituted service

of process after its process server was unsuccessful in serving the defendant on

May 23, May 28, June 2, and June 9. Id. at *2. The bank successfully served the

defendant on August 20, at which point the defendant filed an answer claiming that

                                            12
limitations had expired under Section 31.006 and complaining that the bank had failed

to exercise diligence in attempting to serve him. Id.

      The Austin court noted that the issue of diligence is determined by looking at

whether a party’s actions manifested a bona fide intention to have process served,

whether a party has acted as an ordinarily prudent person would have acted under the

same or similar circumstances, and whether a party has acted diligently up until the

time the defendant was served. Id. at *4. It then concluded that the 42-day period

between the process server’s last failed attempt to serve the defendant with the scire-

facias application and the bank’s filing of the motion for substituted service and the

28-day period between the trial court’s order authorizing substituted service and

execution were not unreasonable delays because “[t]he mere fact that some time

elapsed between service efforts” did not conclusively demonstrate that the bank was

not exercising diligence in its efforts to locate and serve the defendant. Id.; see also

F.D.I.C. v. Davis, No. CV H-92-3759, 2006 WL 8445383, at *2 (S.D. Tex. July 28,

2006) (requiring FDIC to show that it served defendant pursuant to Texas Rule of

Civil Procedure 154 to revive judgment); F.D.I.C. v. Bauman, No. CIV. 3:90-CV-0614-

H, 2004 WL 1732933, at *2 (N.D. Tex. July 30, 2004) (concluding that the court could

not rule on the merits of the scire-facias motion because the plaintiff had failed to

show that it had served the defendant pursuant to Texas Rule of Civil Procedure 154);

Bevers v. Brodbeck, No. 07-04-0475-CV, 2006 WL 2795347, at *2 (Tex. App.—Amarillo

Sept. 29, 2006, pet. denied) (mem. op.) (observing, in scire-facias suit involving

                                           13
procedure on party’s death, that “[n]otice of a suit is a fundamental component of due

process to which all litigants are entitled” and that “[l]ike a citation, a scire facias

brings a person before the court by giving her notice of the suit”).

      Pharus refers us to Cadle Co. v. Rollins, No. 01-09-00165-CV, 2010 WL 670561,

at *1 (Tex. App.—Houston [1st Dist.] Feb. 25, 2010, no pet.) (mem. op.), to support

its argument that the trial court erred by granting Suson’s motion for reconsideration.

In Cadle, the appellant challenged the trial court’s order denying its motion for scire

facias to revive a dormant judgment assigned to it by American Express. Id. The

Houston court agreed with the appellant, reversed the trial court’s order, and rendered

judgment granting the scire-facias motion, thus reviving the dormant judgment. Id.

The appellant in Cadle had previously attempted to collect on the 1985 judgment

through five writs of execution issued and served in the case. Id. It attached the

judgment and the writs to its 2008 motion and amended motion. Id. The appellee

agreed that the underlying judgment had been preserved by the execution of writs,

and the record reflected that the appellant had filed its motion and amended motion

to revive the dormant judgment “well before the second anniversary of the date that

the judgment became dormant.” Id. at *1–2. The court rejected the appellee’s

attempts to construe Section 31.006 to allow the trial court to deny a motion based on

equity, specifically the appellee’s age and financial inability to pay the judgment. Id. at

*2. The question of whether the appellant had diligently complied with Rule of Civil

Procedure 154 was not addressed. See id. *1–3.

                                            14
C. Analysis

       Pharus states, “To hold that there is a due diligence requirement is wholly

outside the text of the statute and imposes an additional arbitrary requirement that is

not supported by the precedent.” In light of the plain language of Rule of Civil

Procedure 154, as construed above by some of our sister courts and two federal

district courts, we disagree.

       Pharus did not follow Rule 154’s requirements. Instead, the record reflects that

Pharus attempted to serve Suson under Rule 21a (and that it failed in that attempt).

Pharus then took no other action between May 15, 2018, and June 30, 2020, when

Suson was served with notice of the hearing on Pharus’s application. Accordingly, the

trial court correctly denied Pharus’s application based on Pharus’s clear lack of

diligence (notwithstanding its additional utter failure to follow the procedures required

by Rule of Civil Procedure 154). Cf. id. at *1.

                                   IV. CONCLUSION

       Having overruled Pharus’s sole issue, we affirm the trial court’s judgment.

                                                      /s/ Dana Womack

                                                      Dana Womack
                                                      Justice

Delivered: October 14, 2021

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