Payless Cashways Inc. v. Hill

The court cannot ignore the bankruptcy court's broad language granting relief from the stay and concludes the trial court's order granting the default judgment does not violate the automatic stay.

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Click here for the full text of this decision FACTS:In this restricted appeal, the appellant, Payless Cashways Inc., appeals a no-answer default judgment rendered in favor of Terry Hill. Hill sued Payless Cashways for personal injuries he sustained as a result of a slip-and-fall on Payless Cashways’s premises. At the time he filed the suit, Payless Cashways had filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. Thus, Payless Cashways was entitled to the protection of the chapter 11, section 362 automatic stay. The court granted relief from the stay to Hill for the purpose of resolving his claim against Payless Cashways Inc. HOLDING:Affirmed. The bankruptcy court broadly and unambiguously granted Hill relief from the automatic stay “for the purpose of resolving his claim against Payless Cashways Cashways, Inc.” The order on its face would allow litigation to resolve these claims. Although the bankruptcy court’s order contains provisions that would apply in the event of “any” settlement, those provisions in no way limit or purport to limit the broad language granting relief from stay. Nor was the language concerning settlement included in the operative language granting relief from stay. The court concludes the trial court’s order granting the default judgment does not violate the automatic stay. Payless Cashways contends the trial court erred in granting the default judgment because Hill failed to show strict compliance with the rules concerning service of process. A default judgment will be set aside if the record does not affirmatively show strict compliance with the rules governing service of citation. Primate Constr. Inc. v. Silver, 884 S.W.2d 151 (Tex. 1994) (per curiam). There are no presumptions in favor of proper issuance, service and return of citation. The appellant nevertheless asserts the default judgment must be reversed because the return of citation and return receipt show service upon a Loreen Flores, and fails to show she was the registered agent for Payless Cashways. Specifically, the officer’s return noted service upon the Defendant was “evidenced” by the return receipt that was signed by Loreen J. Flores. The court agrees that Flores is not Payless’s registered agent. However, contrary to appellant’s assertion, the record in this case does not show service on Flores, but rather service upon Payless Cashways through Corporation Service Co. The rules specifically allow a corporation to appoint another entity as its registered agent. Corporation Service Co. was Payless’s registered agent. Flores merely signed for Corporation Service Co. Appellant has not argued or provided any authority for the proposition that Flores could not sign for the registered agent. The court concludes the officer’s return establishes that Payless’ registered agent for service of process was served with citation. OPINION:Michael J. O’Neill, J.; Wright, O’Neill and Francis, JJ.

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