The Texarkana Court of Appeals has reversed a default judgment entered against a defendant whom the plaintiff failed to serve with an amended petition that added a more “onerous” cause of action. It further reversed damages, attorney’s fees, and sanctions awards for lack of sufficient evidence.
M.K. Jackson Investments, Inc., Donna Neal Jackson and Jeramy Heath Jackson v. Richard Roland (No. 06-25-00080-CV; March 24, 2026) stemmed from a landowner’s burn pit that got out of control and burned up a neighboring landowner’s motor home, camper, windmill generator, box truck, pickup truck, and Crown Victoria sedan, causing $243,200 in damages. Plaintiff sued Defendants for trespass, negligence, and negligence per se for failing to supervise the burn pit. Plaintiff alleged in his petition that M.K. could be served through its registered agent at an address in Greenville, Texas. The Hunt County district clerk issued a citation for personal citation at that address, and a sworn return of service shows that the agent was personally served with the citation and petition by hand delivery from a private process server but at a different address. Plaintiff later added M.K.’s directors as defendants and requested that citation be issued to them. He also added a TUFTA claim against the directors.
Plaintiff alleged that after M.K. was served through its agent, M.K. filed a warranty deed gifting its property to another party in an effort to fraudulently convey the property. Citation for the amended petition was issued and personally served on the directors. A few weeks later, Plaintiff moved for default judgment because Defendants hadn’t filed an answer. He attached the returns of service for each defendant to his motion. At the hearing, Plaintiff’s counsel testified that a fair market value for attorney’s fees was $9,002.86. The trial court granted the motion, declared M.K.’s transfer of property as void, and entered judgment for Plaintiff against Defendants jointly and severally for $243,200, post-judgment interest, and attorney’s fees under TUFTA. Defendants filed a motion for new trial to set aside the default judgment. In short, they alleged that somebody else owned the property, so they didn’t think it necessary to answer the lawsuit. Plaintiff objected and moved for sanctions. The trial court denied the motion for new trial, determined that Defendant Jeramy Jackson had lied to the court, and imposed sanctions of $4,694 for Plaintiff’s cost of defending false affidavits. Defendants appealed.
In an opinion by Justice Van Cleef, the court of appeals reversed and remanded for new trial. Defendants argued first that defects in service of process deprived the trial court of personal jurisdiction to render a default judgment. Plaintiff, who relied on the return of service to support the judgment, bore the burden of showing “that service is properly reflected in the record” (citation omitted). TRCP 107(b) prescribes the requirements for return of service, but the rule doesn’t require the “listing a different address on the return and citation will not render service invalid” (citations omitted). In this case, the record showed that the process server properly delivered the citation and the original petition, and that the affidavit for service included the information required by the rule. The court thus ruled that Plaintiff properly served the original petition on M.K., establishing the trial court’s jurisdiction over the entity. The same went for service on the other defendants.
But Plaintiff made a mistake. Defendants argued that Plaintiff was required to serve M.K. with the amended petition. As the court observed, “a defendant’s failure to answer admits liability only when the live pleadings have been properly served” (citations omitted). Given the fact that “[n]o-answer default judgments are disfavored” under Texas law, a “non-answering party must be served a more onerous amended petiton under Rule 21a” (citations omitted). Plaintiff’s amended petition, which added a “more onerous” TUFTA claim, subjecting M.K. to liability for attorney’s fees, was not served. Plaintiff thus failed to comply with Rule 21a prior to the entry of default judgment on his amended petition. Consequently, the trial court erred by entering a judgment against M.K., “which included joint and several liability for the TUFTA cause of action and attorney fees.”
The parties agreed that the court of appeals had to reverse the amount awarded in the default judgment for damages and attorney’s fees because “a defaulting defendant admits all facts properly pled in the plaintiff’s petition except for the amount of unliquidated damages” (citations omitted). Here Plaintiff’s petition included a list of items of personal property allegedly destroyed by the fire, to which he assigned dollar amounts. As the court observed, “[plaintiff] did not state in his petition what the dollar amounts represented, whether purchase price, fair market value, cost of repair, or otherwise. He does not establish how the amounts were calculated or by whom. As a result, the damages amount listed in the petition was conclusory, and the trial court was required to hear evidence on damages before awarding them.” That didn’t happen, so the court reversed the unliquidated damages award. As to attorney’s fees, Plaintiff’s counsel failed to prove them up under Rohrmoos test. Instead, counsel merely stated what the fees were and made a conclusory comment that “he had ‘considered the fair market value for attorney’s fees in this area, including the Arthur Andersen factors, as well as the Rohrmoos Factors, in determining [the attorney fees] as reasonable and necessary.’” Finally, the parties agreed that although the sanctions were warranted, the award should be remanded to the trial court for the same reason as the reversal of the attorney’s fee award.
When all was said and done, the court affirmed the default judgment as to the Jackson’s liability but reversed the damages and attorney’s fees award in the judgment. It also reversed the default judgment against M.K. in its entirety, as well as the amount of sanctions.
