Unreported / Non-Citable
Background
Todd May, as trustee of the Beverly Trust (formerly the Oak Lawn Investment Trust), sued Jean Michel Szabuniewicz and related entities for breach of fiduciary duty, breach of contract, conversion, fraud, and other claims arising from alleged abuse of Szabuniewicz’s position as the trust’s former trustee. The petition specified that corporate entities could be served through their registered agent, Corporate Registered Agent Services, Inc., at a Weatherford address, and that Szabuniewicz could be served individually at the same location.
When Szabuniewicz and the entities failed to answer or appear, May moved for default judgment. The trial court granted the motion in June 2025, entering judgment for $7.67 million in compensatory damages, $95,189.55 in attorneys’ fees, $2 million in exemplary damages against Szabuniewicz, and injunctive relief. Appellants filed a restricted appeal challenging the validity of service.
The Court’s Holding
The Court of Appeals reversed the default judgment and remanded, holding that service of process failed to comply strictly with Texas Rule of Civil Procedure 107. The court identified multiple fatal defects: (1) the returns of citation were never filed with the clerk and bore no file marks indicating they were on file for the required ten days before judgment; (2) service on the corporate entities was delivered to Jean Michel Szabuniewicz individually at a different address than the registered agent specified in the petition and citation, rather than to the registered agent itself; and (3) address discrepancies and spelling variations in the defendant’s name (“Szabuniewicz” versus “Sazabuniewicz”) created uncertainty about whether proper service was actually accomplished.
The court emphasized that corporations and limited partnerships cannot physically accept service and must be served through their authorized agents only. Because the record did not affirmatively show that Szabuniewicz was the registered agent or other appropriate person authorized to receive service for the entities, service was fatally defective. The court rejected any presumption in favor of valid service in the restricted-appeal context, requiring instead meticulous adherence to procedural requirements before a default judgment can stand.
Key Takeaways
- Default judgments in Texas are disfavored and cannot survive if service of process fails to strictly comply with the Texas Rules of Civil Procedure.
- Service on a business entity must be made on its registered agent, general partner (for LPs), or other statutorily authorized person; service on an unrelated individual, even at a related address, is fatally defective.
- Returns of service must be filed with the clerk and bear indications of filing; attaching returns only to a motion for default judgment is insufficient and creates presumptions against the party seeking default.
- In restricted appeals of default judgments, there are no presumptions favoring valid issuance, service, or return of citation; the party seeking the default bears the burden of proving strict compliance through the face of the record.
Why It Matters
This decision reinforces Texas’s increasingly skeptical stance toward default judgments and the strict procedural requirements that must be met to obtain them. The opinion reflects recent signals from the Texas Supreme Court that trial courts should rigorously police service-of-process compliance and that appellate courts will closely scrutinize whether proper procedures were followed. For practitioners, the case underscores the critical importance of identifying and serving the correct agent for business entities, properly filing returns of citation with the clerk, and maintaining consistency in addresses and entity names throughout the pleadings and service documents.
The holding also clarifies distinctions in service requirements for different entity types: corporate officers and LPs’ general partners are the authorized recipients, but service on an unrelated individual—regardless of connection to the entity—cannot cure defective service. Counsel seeking default judgments must ensure meticulous compliance with every procedural requirement or risk reversal on appeal.