Denying requests for admissions (RFAs) vs. failing to answer them altogether: What are the consequences?

DEEMED ADMISSIONS CAN BE USED AS EVIDENCE 

BUT NOT EXPRESS DENIALS OF REQUESTED ADMISSIONS 

In Medina v. Zuniga, the Texas Supreme Court recently reversed sanctions imposed on a defendant for having failed to admit matters addressing liability in response to spate of requests for admissions (RFAs) served at the inception of the law suit, where the defendant later stipulated to having been at fault, and only contested gross negligence at trial.* The case is a fact-intensive personal injury case arising from a vehicle-pedestrian collision and has nothing to do with debt collection.

* See TEX. CIV. PRAC. & REM. CODE § 41.001(11) (defining gross negligence as an act or omission that (1) objectively “involves an extreme degree of risk” and (2) the actor proceeds to perform “with conscious indifference” despite an “actual, subjective awareness of the risk”).

"REQUESTS FOR ADMISSIONS ARE NO METHOD FOR TRYING THE MERITS"

Medina v. Zuniga, No. 17-0498 (Tex. Apr. 26, 2019)
(sanctions for failure to admit requests for admissions reversed) 

That said, REQUESTS FOR ADMISSIONS are routinely served on defendants in consumer debt collection cases by certain debt collection attorneys for certain creditors, and they are designed to be merit-preclusive if they are not denied, meaning that the creditor can then rely on deemed admission to get a judgment.

DENY, DENY, DENY 

The received wisdom among consumer debt defense attorneys is that RFAs can be safely denied as a routine defensive litigation practice, lest they be used as substitutes for evidence supporting the debt claim.

The Texas Supreme Court's opinion in Medina v. Zuniga supports the proposition that an arguably insincere denial does not amount to sanctionable conduct because a defendant should be able to hold the plaintiff to its burden of proof, and should not be forced to either concede liability (by answering "Admitted" to RFAs that go to the merits) or face risk sanctions for answering "Denied".

Note that the Texas Supreme Court's most recent holding on the matter is also in line with rule 92 of the Texas Rules of Civil Procedure, which authorizes a blanket "general denial" rather than requiring a defendant to set forth a response denying or admitting each allegation in the plaintiff's petition one by one. (Some affirmative defenses, however, require a verified denial, and some conditions precedent, if applicable, require a specific denial, rather than merely an all-purpose general one). 

DEEMED ADMISSIONS 

The problem with ignoring requests for admissions, by contrast, is a more serious one. If RFAs are not answered, the propositions requested to be admitted are deemed true without any need for other proof. If a battery of deemed admissions covers the essential elements of the plaintiff's claims, they relieve the plaintiff of the burden to prove the claim with competent evidence on the merits. In many debt collection cases, courts have upheld summary judgments granted based entirely, or in part, on deemed admissions, even on issues such as standing to sue and amount of attorney's fees sought by the creditor's attorney.

BEWARE OF RFAs SERVED TOGETHER WITH SUIT PAPERS, OR EMBEDDED IN THE PETITION 

Some collection law firms routinely serve a REQUEST FOR ADMISSIONS together with the CITATION and the ORIGINAL PETITION, and then rely on the executed RETURN OF CITATION (or alternative proof of service, such as a sworn declaration by a private process server) to establish that the RFAs were served on the same date the citation was served, and that the requests are deemed admitted because they went unanswered within the 50 days that followed.

This practice can create a problem for defendants even in cases where the defendant promptly hires an attorney to answer the freshly-filed collection lawsuit in response to a debt-defense attorney's solicitation letter.

If the suit papers (citation, petition, and requests for admission, which are sometimes included in the petition itself rather than appearing on a separate document) are still in the hands of the process server, it is possible that the defendant may get served in person after her attorney has already filed an original answer. The defendant may end up ignoring the requests for admission, trusting the attorney to take care of everything. But the attorney will then likely fail to answer (deny) the RFAs by the due date if his office is unaware that the client has been served with requests for admissions in the interim, together with the citation. The Defendant's answer to the law suit will preclude a default judgment, but the creditor could still use deemed admissions to support a motion for summary judgment, or raise the matter of deemed admissions at trial.

All may not be lost, because the attorney can still file a MOTION TO STRIKE DEEMED ADMISSIONS (sometimes called a motion to un-deem), but there is no guarantee that the trial court will grant it. And a deemed admissions problem must, of course, be detected in time to take proper remedial action. When deemed admissions are brought up at trial, it may be too late.

More on requests for admissions and deemed admissions:
 -->  Dealing with a deemed admissions problem in a  consumer debt collection case |  Labeau v. GE Capital Retail Bank: Deemed admissions used against bank customer | Disputing the existence of deemed admissions |

Filing an Answer to the Creditor's Original Petition in a debt collection lawsuit

Appearance by filing an answer & waiver of citation

What counts as an answer in a debt collection lawsuit and why it is important  

As a matter of due process, a plaintiff must see to it that the defendant is properly served with the lawsuit papers that tell the defendant what he or she is being for, unless the defendant waives service and appears voluntarily. Without proper service (or waiver thereof) the court does not acquire personal jurisdiction over the defendant and cannot enter a valid judgment. Any judgment rendered without jurisdiction is void.

A note on lawsuit lingo: state vs. federal courts in Texas  

In Texas state courts, the plaintiff's first pleading that is used to initiate the collection case against the defendant is called ORIGINAL PETITION rather than ORIGINAL COMPLAINT, and the document that directs the process server or peace officer (constable or sheriff) to serve it on the defendant is called a CITATION rather than a SUMMONS.

In federal court the term "civil action" is standard. In state courts, terms "Cause" (as in Cause Number) "civil case" and "suit" or "lawsuit" are more commonly used. Many courts use the abbreviation C or CV to distinguish civil from criminal cases (CR). CCL stands for Civil Court at Law and CCCL for County Civil Courts at Law in Harris County (because there are many county criminal courts of law also).

Note that in divorce cases, the terms Petitioner and Respondent are used instead of Plaintiff and Defendant. In dissolution-of-marriage cases, the petitioner is the spouse that files first, which may be the husband or the wife. Analogously, the same goes for disputes over child custody (SAPCR) that are not coupled with a divorce.

In debt collection litigation the Plaintiff is always the Creditor, which is why it is appropriate to use Plaintiff and Creditor interchangeably on this blog.

The only exception is when the consumer sues the creditor (or the creditor's attorney) for wrongdoing, such as violation of statutes prohibiting unfair debt collection practices (FDCPA, TDCA, DTPA). Most of those actions, however, are brought in federal court (or removed to federal court), except when such a cause of action is asserted as a counter-claim in a pending collection lawsuit. In that scenario, the defendant will also become a counter-plaintiff.

In a consumer debt collection suit the Defendant is always an individual, but on Amex cards and suits on business debt there will often be two defendants, one of them a business entity. In some of these cases, the individual is sued as a guarantor, rather than as a primary obligor.

Service of Citation by mail? 

A citation may also be served by certified mail, but may not be so served by the plaintiff's attorney directly. It will  have to be done through the clerk, the constable's office, or a private process server. Service by mail is rarely used in debt collection suits; except when it is order in combination with service by posting the lawsuit papers on the defendant's door pursuant to an order for substituted service under Texas Rule of Procedure 106 (Rule 106 Order).

The importance of the Defendant's answer 

Whether or not a lawsuit is answered in writing after the service of citation and original petition has important legal consequences: If the debtor was properly served (usually in person; or, if such service is unsuccessful, by attachment of a copy of the citation and petition pursuant to an order for substituted service at the address that the plaintiff has for the debtor), but does not file an answer, the debt collection attorney may move for a no-answer default judgment for the creditor. A motion for this type of default judgment does not require any proof of liability, and the amount of damages (and attorneys fees, if any are sought) may be established by affidavit. -- > Motion for default judgment;
-- > Affidavit in support of default judgment

But a no-answer default judgment cannot properly be entered against a defendant who has made an appearance in the lawsuit.

Filing an answer prevents default judgment (well, not literally, but at least it provides a valid ground for attacking a default judgment, if one is nevertheless entered). A defendant's ORIGINAL ANSWER may be filed in person or by mail (hard copy) if the defendant is not represented by an attorney, but a pro se defendant may also register to file and serve documents through the Texas eFile system at https://efile.txcourts.gov/ofsweb. This will require a credit or debit card to pay service fees and some court costs (if applicable). Attorney are required to efile. Pro se litigants are still allowed to file hard copies. 

Filing an answer counts as an "appearance" in the lawsuit. Making an appearance in person at a hearing or trial in the case may also be sufficient, but the safer thing to do is to file an answer with the court. Why? Because the Plaintiff is not required to let the defendant know of any hearing on a motion for default judgment; should there even be one; nor is the creditor required to send the debtor a copy of the motion for default judgment if the debtor was served, but did not file an answer. Many courts will accept motions for default judgment without the need for an in-court attorney appearance, and will sign them as a matter of course as long as the formal requirements are satisfied. Some courts have a checklist and flag deficiencies. Practices vary. Court staff may call the attorney or make a notation on the online docket sheet, or both. Some judges write denied on the motion without entering a separate order. Such a denial is not a big deal. The creditor's attorney can come back and try to do better. If the case gets dismissed because it has been pending for too long -- DWOPPED, in court jargon -- it can be reinstated upon motion. DWOP stands for dismissal for want of prosecution.

Notice to the defendant must only be given to a defendant who has answered (unless a particular court has a policy that requires it even though the Texas Rules of Civil Procedure do not). The creditor's attorney may still send a notice of hearing, but the judge may grant a default judgment regardless, provided the other requirements for a default judgment are met, which includes a non-military affidavit. -- > When can the court grant a default judgment?

What counts as an answer? 

For pro se defendants, i.e. those who do not have a lawyer to handle their defense, the criteria are quite low. A short letter to the judge may be sufficient as long as it properly identifies the case (by cause number) and includes name, address, and signature, and -- at the minimum -- the words "general denial" or something that indicates that the defendant is not rolling over and playing dead.

The Texas Supreme Court has said that a defendant who timely files a pro se answer by a signed letter that identifies the parties, the case, and the defendant's current address, has sufficiently appeared by answer and deserves notice of any subsequent proceedings in the case.

That said, a letter by a family member of the defendant will likely not be sufficient because a lay person may not represent another person in court. The same goes for appearances in person at trial. This may seem very unfair, especially when the family member has more education than the defendant, or just wants to be helpful, but neither the Supreme Court, nor the Texas Legislature, has seen fit to change the rule, at least not in county court and district courts (there is now an exception for JP court).

The rules would require the defendant's answer or letter to be sent to the attorney for the creditor also (at the address shown on the petition). If that was not done, the creditor may move for default judgment unawares that an answer is on file; but the fact that the defendant has answered should preclude default judgment even if the creditor's attorney did not know about it. It still happens, but when it happens there is good cause for the default judgment to be set aside.

The judge, trial coordinator, or the clerk of the particular court, will typically examine the file to check whether or not an answer is on file. Some counties even have a system in place that involves a default judgment check-list on which all items must be satisfied and are checked off before a motion for default judgment will go to the judge (or a judge sitting by assignment) for signing. But many courts that hear routine collection cases are very busy, and there will be oversights, slip-ups, and all sorts of errors.

Unnecessary admissions in the defendant's answer 

Some pro se defendants make the mistake of making admissions in their answer, elaborate on their dire financial circumstances, and plead for mercy. Trial court judges will generally ignore the sob stories, assuming they even read the defendant's letter. Why? Because the sob stories are not relevant, at least not at the default judgment stage. What counts at that point is whether a paper signed by the defendant is on file or not. The content is generally of marginal importance. But if the defendant makes admissions on elements on which the Plaintiff's has the burden of proof, the creditor's attorney may used the admissions later as a substitute for proof of its own. -- > Judicial admissions in pleadings.

The content of the debtor's responsive pleading -- the DEFENDANT'S ORIGINAL ANSWER -- will also acquire importance if the defendant hires an attorney, or wants to counter the plaintiff's claim with an affirmative defense, such as time-bar under the four-year statute of limitations for debt claims (6 years for some promissory notes). If they defendant has already filed a narrative answer, the attorney coming into the case will file something, most likely an AMENDED ORIGINAL ANSWER that replaces the first one (not literally, but in terms of what counts as "the live pleading"). Some consumer debt defense attorneys merely file a general denial answer with one or two affirmative defenses briefly stated (such as the "applicable statute of limitations"); other include a whole litany of them, and some set forth more specific arguments why the creditor should not prevail, supported with citations to case law.

If a defendant wises up in time and realizes he has helped the creditor with admission in a filing with the court, he can also amend the ORIGINAL ANSWER as long as the amendment deadline has not yet passed either under the rules or under a case-specific docket control order. The general deadline is seven days before trial, but that also applies to motions for summary judgment regardless of whether or  not a trial date is set for a later time. Once the deadline has passed, leave of court must be obtained to amend pleadings, and if a judgment has already been granted, it is too late to amend. In that Johnny-come-late scenario, the Defendant would have to file a post-judgment motion, such as a motion for new trial.

Creditor's burden to prove case and Defendant's affirmative defenses 

Plaintiffs, including Creditors, must prove their case. The burden is on them, but to defend the case based on other reasons or circumstances, such as the contention that the debt is stale and no longer actionable under that statute of limitations (generally four years, in Texas) must be properly raised by the Defendant. If not, they are waived.

Affirmative defenses must be pleaded. As with a the "general denial," a short reference to the name of the affirmative defense will generally be sufficient; e.g. Plaintiff's claim is time-barred; or Defendant pleads the following affirmative defenses: statute of limitations; lack of capacity to sue, mandatory arbitration clause, etc....

Some defenses, however, require a sworn denial. The circumstance in which the need for a verified denial arises are rare (at least in credit card debt suits) and are not discussed here. -- > Verified denials; matter that require a sworn denial. --> Sworn account suit under rule 185.

Effect of filing an answer 

Under Rule 121, an answer constitutes an appearance of the defendant so as to dispense with the necessity for the issuance or service of citation upon him.” Tex. R. Civ. P. 121. Thus, if the defendant files an answer after finding a note from a process server on the door knob or somewhere in the vicinity but the citation is never actually served in person, such service is no longer required to bring the defendant before the court. The process server still has a duty to try to serve it because that is her job, but it will not matter whether she is successful or not. The defendant will have no valid complaint about not actually having been served with the citation because that would no longer be necessary. This problem sometimes comes up when the defendant hires an attorney and then relies on the attorney to handle the lawsuit. The attorney may file an answer before the defendant is served in person, and may not be aware that the defendant is served with lawsuit papers that include requests for admissions, which then may go unanswered. --> Requests for admissions and the deemed admissions problem.

Even if a general denial can be filed without having seen the pleading, the defendant will still want to know what is alleged in the petition and how much money is being sought from them. Luckily, many courts provide online access to court records in addition to docket information. Some require registration for a free account (e.g., Harris County); others do not (e.g. Galveston County, Fort Bend County, Dallas County. In some court systems it is also possible to purchase certified or uncertified copies online; others require that a request be submitted to the clerk for processing.

Efiling involves a different system and serves a different purpose. The eFiling system provides on-line access to courts (through the clerks) for submitting documents and receiving them, rather than for looking up documents passively.

How specific does the answer have to be? 

In Texas state courts, unlike federal district courts, the defendant does not have to respond to the allegations in the plaintiff's pleading point by point (and many collection lawyers don't provide many details to begin with, although there are exceptions). A GENERAL DENIAL will put all of the Plaintiff's allegations in issue, and only certain matters need to be raised expressly, a topic that goes beyond a general introduction to collection lawsuits.  -- > affirmative defenses must be pleaded; -- > conditions precedent and specific denials.

Effect of a General Denial 

A general denial is just that: a general denial of what the plaintiff has alleged in its petition. It constitutes a summary denial of each factual allegation and theory of recovery asserted by the plaintiff, accomplished with no more than two "magic" words. The effect of asserting a "general denial" is to require the plaintiff to prove its claim.

Pleadings are generally not evidence. Therefore, the creditor cannot be granted a judgment on the pleadings alone.

There are two exceptions to the rule that pleadings are just pleadings, however: (1) No-answer default judgment after proper service on the defendant; and (2) a properly pleaded Sworn Account Suit under Rule 185 that has not been neutralized with a verified denial. Verified in this context means sworn to.

Judgment on the Pleadings only? 

As for the first exception, the Creditor's unanswered and therefore uncontested pleadings only provide a basis for the court to find the defendant liable as alleged. That is not enough for a money judgment in a specific lump-sum amount. Even when the defendant has not answered at all, the Creditor must still prove the amount of damages with some evidence, typically in the form of an affidavit with attachments. The fact that a specific dollar figure (or two figures, one for principal and one for accrued interest) was stated in the ORIGINAL PETITION is not enough. That said, may Creditors attach an affidavit and other documents to their original petition to meet the requirement to prove the amount of the alleged damages (which would otherwise be considered unliquidated) at the point of inception.
 
As for the second exception, it no longer comes up much in collection suits on bank debt. Generally, a sworn account suit can only be brought by a "creditor" who sold goods or provided services. The  latter category includes attorneys that sue their clients for unpaid legal fees. It does not include a financial institution that made a loan or extended credit otherwise. The use of the loan proceeds or of the credit card for purchases does not entitle the financial institution to sue on sworn account because the goods or services were provided by a third party (merchant), rather than directly by the bank or credit union.

Sworn Account suit not viable for credit card and other bank debt 
 
A credit card debt suit should not be brought as a sworn account suit under Rule 185 because sworn account is not a proper legal theory for collecting that type of debt through the court system. While such debt collection suits are rarely filed as a sworn accounts any more, it does not mean it will never happen. When it does happen, and when the defendant does not complaint about it, the court may conclude that the error has been waived, assuming the judge even becomes aware of it, which cannot be taken for granted, esp. in courts that are very busy. The same conclusion could possibly be reached on appeal, although it may be worth arguing otherwise if the appeal is from a default judgment, where the pleadings that form the basis for the entry of judgment are scrutinized more thoroughly.
--> Pleading sufficiency and Special Exceptions.

If a default judgment is granted and it is based on a sworn account only, there may are good grounds to attack it based on a defect in the pleadings.

Even a default judgment on an otherwise valid legal theory under Texas law (breach of contract, account stated) may be attacked in a timely regular appeal or in a restricted appeal if the creditor's pleadings was defective, or arguably insufficient to meet the fair notice standard. --> Appeals from Default Judgments, Post-judgment on Default Judgment vs. Restricted Appeal, Bill of Review.

RELATED TOPICS AND BLOG POSTS

• Service of lawsuit papers: Service in person by process server and substituted service
• What is a citation? 
• Sufficiency of the creditor's pleadings to support default judgment 
• No-answer default judgment vs. post-answer default judgment 
• Different ways of attacking a default judgment on a debt in Texas 
• Bill of review petition to challenge a default judgment that is no longer appealable

Last revised 12/8/2018 

Anh H. Regent - Review and critique of standard pleadings filed by this Houston-based debt collection attorney [who is now a debtor in bankruptcy[

Anh Huynh Regent – Profile of debt collection attorney

Anh Regent (not Ann; this is a guy) has his own lawfirm, REGENT & ASSOCIATES, based in Houston, which specializes in debt collection, and has numerous corporate clients, including major credit card banks.

2015 UPDATE: Anh Regent filed for bankruptcy in March 2015 in the Southern District of Texas. He owes his process servers several hundred thousand dollars and one of his (former) debt buyer clients says he absconded with money advanced for payment of filing fees in cases he never filed. He also owes $200,000 to Chase, and smaller amounts to numerous other creditors. Anh Regent is a defendant (or represented the defendant) in numerous actions in which debtors allege that he or his firm violated the Fair Debt Collection Practices Act (FDCPA).    
   

NATURE OF PLEADINGS FILED BY ANH REGENT 

  

Regent files initial pleadings that are longer than those prepared by other debt collection attorneys because they include discovery requests as numbered sections, of which there are seven to nine, counting all. Some also includes attachments (or claim to include them, though they are actually omitted). 

  

Regent's original petition template is unique in pleading a hybrid causes of action titled "SUIT ON OPEN & STATED ACCOUNT/DEBT/BREACH OF CONTRACT" in a single paragraph. Although this is confusing, Regent has been presenting different banks' and debt buyer's cause of action or causes of action against the defendant in such fashion for years. Presumably it is meant to invoke the common-law cause of action of "suit on open account" (which is not applicable to credit card debt claims under long-standing precedents because the creditor does not sell goods or service); account stated (which has been approved for credit card debt collection by several courts of appeals in Texas, but not by all), and breach of contract, which is the correct and obvious legal theory for a debt claim based on a credit card agreement. As for "debt" generally, it is not a cause of action, and it is not clear what legal theory Regent intends to invoke by including it. 

  

DISCOVERY REQUESTS WITHIN THE BODY OF THE PLEADING 
[not proper under the TRCP]

  

The inclusion of discovery request within a pleading is a practice of dubious validity under the rules of civil procedure. One court of appeals has already taken Regent to task for embedding discovery requests within his petition, thus confounding the distinct purposes of pleadings and discovery, in violation of the TRCP, and creating confusion regarding the applicable due date for the answer to the lawsuit and the due date for discovery responses (which is longer). 

Be that as it may, it rarely becomes an issue. Pro se defendants generally do not know that the rules state that discovery is not to be filed, and consumer attorneys probably do not consider it worthwhile objecting, since the plaintiff can simply re-serve the discovery requests by fax or certified mail later. The improper form of service may, however, provide a defense for deemed admissions, or additional grounds for a motion to strike them. It may also provide a basis for an attack on a default judgment. 

           

Regent's typical petition encompasses two types of requests: Requests for Admissions, and Requests for Disclosures. Other debt suit attorneys also serve interrogatories with the citation and petition, but as separate document that also includes other discovery requests.

The purpose of requests for admissions is to use deemed admissions in lieu of evidence for summary judgment, or for default judgment purposes. Deemed admissions result automatically when the Defendant fails to respond to requests for admissions by the deadline. In the case of such default, all propositions which the cardholder is asked to admit, are considered admitted. (--> Deemed admissions in debt suit litigation). 
  
Requests for admissions are not supposed to be embedded in pleadings, but Anh Regent deliberately flouts that rule, and rarely gets taken to account when he uses the deemed admissions so obtained for default judgment purposes. See excerpt from motion for default judgment below:  

Regent uses the tactic because he can then use the return of citation, i.e. the proof that the petition was served, to also prove that the requests for admissions were served.

REGENT PLEADINGS IN COMPARATIVE VIEW

Regent's typical original petition also differs from pleadings filed by other debt collections attorneys in that it alleges (in the fact section) that the revolving balance was accelerated by the original creditor. The pleading typically does not identify the original creditor, however, unless the plaintiff expressly sues as assignee of such-and-such bank, and the original creditor thus appears in the case style.  

ATTORNEY FEES. Regent pleads for attorneys fees in a separate paragraph. He does not plead for a specific amount, but one of the items in the enumerated list of requests for admission asks the defendant to admit that a specific dollar figure is reasonable. That  dollar amount is 25% of the amount that the petition alleges is owed by the defendant.

SUIT-ON-ACCOUNT THEORIES. Regent pleads "open account" as a theory of recovery, and moves for summary judgment on it, as an alternative to breach of contract and account stated (discussed elsewhere). Suit on account, however, presupposes a sales transaction from the creditor to the debtor, and that does not apply in credit card debt cases. Under long-standing appellate decisions, the open account theory fails for the same reason the sworn account theory fails. Sworn account is, after all, not a theory of recovery, it is merely an expedited procedure for bringing a common-law open account suit by attaching verification and documentation to the original petition. If the procedural requisites of Rule 185 are not satisfied, the Plaintiff must prove its common-law account claim under the normal evidentiary standard. But the standard of proof does not affect the substantive requirement that the claim be based on sale of goods or services by the claimant to the defendant.

ORIGINAL CREDITOR SUITS VS LAWSUIT BY DEBT BUYERS. Regent apparently uses the same petition template for original creditors suits and collection suits by debt buyers. Some references in the standard pleading are in the disjunctive ("either/or") form so as to cover alternative scenarios, e.g. reference to "the terms of the agreement with Plaintiff/Plaintiff's predecessor in interest."  Discovery requests similarly refer to "Plaintiff or Plaintiff's predecessor in interest."

VENUE PARAGRAPH. Regent asserts alternative basis why venue would be appropriate in the county in which suit is filed: (1) because this is where the contract was signed; (2) where the Defendant resides, or (3) where the events giving rise to Plaintiff's claim occurred. What is noteworthy here is the inclusion of the first. Credit card accounts typically do not involve signed contracts, and even signed applications are rarely produced as summary judgment or trial exhibits.

APPELLATE REVIEW OF REGENT PLEADINGS 

One court of appeals  has had occasion to examine the quality and sufficiency of Regent's pleading in an appeal from a default judgment. Applying a more exacting standard because a default judgment was involved, it found fault with it for multiple reasons, and reversed the default judgment because none of the theories of recovery that Regent urged on appeal was supported by proper allegations in the petition. Hankston v. Equable Ascent Financial, 382 S.W.3d 631 (Tex.App.- Beaumont - 2012, no petition to Texas Supreme Court).

Here is an excerpt from what the appellate panel had to say about Regent's pleading:

In this case appellee, claiming to be the current owner of an indebtedness, sued two defendants. The pleading references supporting "attached documentation[,]" but neither the underlying contract nor an assignment is attached to the petition. 

Neither the petition nor any attached document names the original lender. The petition includes only an account number, but does not name the defendant who opened the account or signed the contract. See Lambert v. Dealers Elec. Supply, Inc., 629 S.W.2d 61, 63 (Tex.App.-Dallas 1981, writ ref'd n.r.e.) (op. on reh'g) ("[O]nly those matters alleged in the body of the petition are matters upon which defendant is placed upon notice that plaintiff intends to prove upon trial."). 

Appellant's name is misspelled in the preamble, the only place in the petition other than the style where he is named, and the petition (filed in Orange County) does not provide the appellant's residence (in Harris County), although that was known. See Tex.R. Civ. P. 79. The body of the pleading refers to only one defendant, though not by name, an allegation consistent with appellant's argument that he did not sign the contract or open the account. See Lambert, 629 S.W.2d at 63. But appellee seeks to hold both defendants liable for the alleged amount.

In the petition, appellee also states: "However, this amount may not include any payments or credits occurring after the date of this petition or the date of the affidavit of [p]laintiff's representative." The attached "affidavit" appears to be dated eleven months before the default judgment is signed, and refers to a single unnamed "defendant." The affidavit is an apparent attempt to support a suit on account under Rule 185, but the affidavit does not state the "claim is, within the knowledge of affiant, just and true...." See Tex.R. Civ. P. 185; see also Griswold, 249 S.W.2d at 61(reversing default judgment because affidavit did not meet the requirements of Rule 185). Although the affidavit uses the singular "defendant," it does not state which defendant allegedly owes the debt. 

The petition contains no assertion that the account was "for goods, wares and merchandise," for material furnished, for personal services rendered, or for labor done or furnished. See Tex.R. Civ. P. 185; see also Hollingsworth v. Nw. Nat'l Ins. Co., 522 S.W.2d 242, 245 (Tex. Civ.App.-Texarkana 1975, no writ). Furthermore, appellee was not a party to the original transaction. SeeVolvo Petroleum, Inc. v. Getty Oil Co., 717 S.W.2d 134, 138 (Tex.App.-Houston [14th Dist.] 1986, no writ) ("Such accounts, though verified, are hearsay as to such parties[.]"), overruled on other grounds by Sosa v. Cent. Power & Light, 909 S.W.2d 893, 895 (Tex.1995).

Appellee argues that the pleading nevertheless is sufficient as a suit on an open account and on an account stated. But the petition does not include an allegation that the appellant agreed that the balance alleged to be due is correct. See E. Dev. & Inv. Corp. v. City of San Antonio, 557 S.W.2d 823, 824-26 (Tex.Civ.App.-San Antonio 1977, writ ref'd n.r.e.); Unit, Inc. v. Ten Eyck-Shaw, Inc., 524 S.W.2d 330, 334 (Tex.Civ.App.-Dallas 1975, writ ref'd n.r.e.). Rather, the petition itself includes an assertion that the amount may not reflect all payments made. And while the appellee also attempts to assert an action for quantum meruit, the pleading contains no assertion that appellee provided valuable services or materials to appellant. See Vortt Exploration Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990). Also, the discovery requests in the petition reference an express contract. See id. ("Generally, a party may recover under quantum meruit only when there is no express contract[.]").

ALL THREE THEORIES PLEADED BY REGENT FAILED IN TULLY VS. CITIBANK 

In Tully v Citibank, the Texarkana Court of Appeals held that the cardholder’s affidavit filed to counter Citibank’s motion for summary judgment was conclusory and therefore was ineffective, but that it did not matter because Citibank had not met its burden of proof on its only potentially viable theory of recovery: breach of contract. With respect to the other two theories on which Regent had moved for summary judgment, the court held that they were not viable as a matter of law.

The court rejected the proposition that the credit card suit can be brought as a sworn account suit, which a number of other courts of appeals have confirmed also; and held that Citibank could not recover in quantum meruit because it had proven the existence of a contract. The rule has long been that equitable remedies are not available when a plaintiff has a legal remedy for breach of contract. -- > Expresss contract defense to non-contract theories of recovery 

The opinion does not specifically address the implications of a credit card bank withholding the contract (so that it is not before the court), and moving for summary judgment only on the quantum meruit theory. That litigation tactic should fail because a written contract was required under federal law, and the plaintiff’s decision to withhold it does not alter the fact that the relationship between the parties was necessarily a contractual one. --> In re Tran, 351 B.R. 440, 445 (Bankr. S.D. Tex. 2006), aff'd, 369 B.R. 312 (S.D. Tex. 2007)(contract required by TILA).    

Pro Se Defendants often court Defeat and Default Judgment, if not Disaster, by doing nothing or making things worse

COMMON ERRORS BY UNREPRESENTED LITIGANTS

Stasis & Default:  Not doing things that need to be done.

Debt suit defendants typically know little or nothing about the rules of procedure and thus suffer the adverse consequences for not hiring a lawyer (or not being able to afford one) to explain matter to them, or do what needs to be done on their behalf. As a result, debt collection attorney’s “win” a lot of cases simply because the case is not contested at all, or because the defendant makes a serious error that relieves the plaintiff from proving its case.   

Failure to file an answer

It does not take much to prevent a default judgment. All that is required is the filing of an answer, and the courts are very lenient when it comes to judging whether a piece of paper qualifies as an answer. Even a letter to the judge may do, although the rules that require a copy be sent to the opposing party’s attorney would still apply (and would likely be ignored).

Many defendants, however, do not only fail to hire a lawyer, but fail to take any action at all, thus inviting what in most cases is highly predictable, a default judgment. --> Default Judgment Signed, Now what? --> The challenges of appealing a judgment in collection suit without a lawyer. 

Failure to answer REQUESTS FOR ADMISSIONS

Same for requests for admissions. Doing nothing has grave consequences. Not answering them will result in deemed admissions by default. A defendant may not want to believe that they are due within 30 or 50 days as stated on the paperwork. That's understandable. After all, it's the attorney that’s suing them that says so; -- the same attorney that also may have stated that “all information obtained will be used for debt collection purposes” or something to that effect.  But the defendant’s distrust or wariness about providing information does not suspend the operation of the deemed admissions rule. It does not matter that the defendant took the FDCPA (mini-miranda) warning seriously and refused to provide the information that was requested. It's a trap for the unwary, and collection attorney deliberately set it because the want the defendants to fall into it.   

  

Unnecessary judicial admissions thanks to well-meant SOB-STORY NARRATIVES in pleadings 

Some unrepresented litigants may feel a need or urge to respond, and do so in writing. Some use it as an occasion to wail and vent. Bemoan their dire conditions and protest that they would have been paying if only they had the money. And that's understandable, but often meets with no sympathy. 

The harsh reality is that collection attorneys don't care. They have heard it all, and if it bothered them inflicting yet more misery on people already down on their luck, they wouldn't be doing it. Or not for long. Many judges don't care either. Debtors are just names and numbers. And dollar figures on judgments. To be processed. The more efficiently, the better. It will make the statistics look good. Attorneys have the upper hand because they are in court on a regular basis and interact with the staff. Not only are they lawyers, they know the ropes. How things are handled in a particular court.

Most defendants don’t know that under the Texas pleading rules they can answer with a general denial and then wait and see if the creditor files a motion for summary judgment or takes some other action. Instead they volunteer information that is superfluous under the pleading rules, and may amount to judicial admissions that can be used against them later. 

Luckily, the Texas Rules of Procedure are very liberal with respect to amendments. If a pro se litigant were to have filed an inappropriate answer but retains a lawyer before a dispositive motion is filed and heard, or the case goes to trial, the error can be fixed by filing an amended answer. Even if the deadline for amendment set by the seven-day rule or a docket control order has passed, a newly-retained attorney can file a motion for leave to amend the pleadings, which the court will probably grant. 

Substituted Service as alternative to personal service of process

If service of process in the regular manner, i.e. in person by a process server or a peace officer such as a deputy constable, is unsuccessful, the debt collection attorney or private process server may file a motion with the court requesting that a different method of service be authorized by court order.

ALTERNATIVES TO SERVICE OF DEFENDANT PERSONALLY BY A CIVIL PROCESS SERVER OR A PEACH OFFICER 

Texas Rule of Civil Procedure 106 authorizes a court to order a substitute method of service. When citation is executed by an alternative method under Rule 106, proof of service must be made in the manner ordered by the court." Tex. R. Civ. P. 107.

Methods of Service of Lawsuits in Texas (rules)

Generally, to support a default judgment, service of process must be performed in strict compliance with appropriate statutory provisions. Such compliance is particularly important when substituted service under Texas Rule of Civil Procedure 106 is involved. When a trial court judge orders substituted service under rule 106 on the motion of the plaintiff who was unsuccessful in serving the defendant in the ordinary manner, the only authority for the substituted service is the order itself. It follows that the requirements set forth in the order must be strictly followed to assure validity of service. If that's not done, there is a good chance that a default judgment can be successfully attacked later.

Orders for alternative service of citation often specify two methods of service, both of which must be complied with. Some judges issue orders for two alternative methods (either one or the other must be used), but additionally require that copies also be sent to the defendant at the same address by regular mail and by certified mail.

Typically, orders for substituted service require delivery to a person over the age of 18 if encountered at the address or by affixing the suit papers to the door or gate if one is present AND mailing of copy of the petition and citation by certified and by ordinary first-class mail. But not all such orders are alike. Nor will judges necessarily grant a motion for alternative service, which must be accompanied by an affidavit stating what service attempts were undertaken and how they were unsuccessful. The facts recited may or not be found satisfactory by a particular court. Some judges set higher requirements than other, such as number of service attempts and evidence that the person to be served actually lives there.

Order granting substituted service (partial snip) 

Assuming the court grants the motion for alternative method(s) of service, any deviation from the trial court's order authorizing substituted service provides a basis for a reversal of the default judgment on appeal based on defective service. Such an appeal is viable even if the defendant was aware of the lawsuit.

Typically, defendants in debt collection suits will have heard from the attorney handling the case prior to the filing of the lawsuit, and will be aware take a lawsuit is coming their way. Some plaintiffs’ attorneys even mail “courtesy” copies to the defendant, advising them that the lawsuit has been filed, accompanied with a disclaimer to the effect that the copy that is being mailed directly to the defendant is not a substitute for formal service.

WHAT IF THE DEFENDANT KNEW OF THE LAWSUIT? 

Courts have held that a default judgment is improper against a defendant who has not been served in strict compliance with the law, even if he has actual knowledge of the lawsuit.
 
Appeals from default judgments are different. In a direct attack on a default judgment, there are no presumptions in favor of a valid issuance, service, and return of the citation. That said, the return of service is considered prima facie evidence of the facts asserted therein (even if they turn out to be false). The recitations in the return of service carry so much weight that they cannot be rebutted by the uncorroborated proof of the moving party. The weight given to the return is no less when the recitations impeach the judgment than when they support it. If error is not apparent on the face of the record, an appeal may not be a viable remedy.

Additionally, appeals are only available within a certain time frames.

BILL OF REVIEW PROCEEDING AS AN ALTERNATIVE TO APPEALING A DEFAULT JUDGMENT

In a case in which an appeal is not a viable option to challenge a default judgment, a defendant may want to consider filing a bill of review in the trial court. This will allow for the presentation of evidence outside the record of the case that ended in a default judgment that would support a reopening of that case. A bill of review differs from an appeal of a default judgment in numerous respects, and has a number of specific requirements. If successful, it will reopen the case that ended in a default judgment, rather than setting aside the default judgment and terminating the claim for good. Although a bill of review relates to a previous lawsuit in the same court, it resembles an original lawsuit and it is likely to be docketed under a new cause number.

SAMPLE DOCUMENTS / ORDERS PERTAINING TO SUBSTITUTE SERVICE 

Service did not comply with order: Default Judgment Denied 

Debt Collection Suit: Filing and Service of Citation

Debt Collection by Litigation: Initiation of Suit and Service of Citation  

INITIATION OF LAWSUIT 

A lawsuit or civil action is initiated by the act of filing, which can be accomplished in person by attorney, through the mail, or – in many jurisdictions – now electronically over the internet. 

Under both federal and Texas law, a credit card debt suit must be filed in the county in which the defendant resides. A suit in another county can be challenged by motion to transfer venue, and may make for a viable unfair debt collection claim against the filing attorney, and possibly against the Plaintiff also. 

At the time of filing, a civil case information sheet must also be completed, but it is used for statistical purposes, and is not a document that has legal significance in the lawsuit itself. An error on the form, such as the erroneous classification of lawsuit (type of claim) has no effect on the substance of the petition and the causes of action pleaded therein. It will only affect the accuracy of the aggregate statistical information. The filing attorney must be identified on the civil filing form. Sometimes the name and bar number do not match the attorney whose signature appears on the pleading. The latter determines which attorney is considered attorney-in-charge under Rule 8. The attorney in charge for the plaintiff is the one to whom all responses and other papers are to be served by the Defendant or the Defendant's attorney.  

In any event, the petition can subsequently be amended, and even additional parties may be added, possibly on different legal theories altogether.

CITATION AND PETITION

The defendant has no obligation to answer unless and until he or she (or it) is properly served with process. This is true even if the Defendant has been sent an advance copy of the lawsuit papers by the attorney representing the creditor, or becomes aware of the lawsuit in some other way. The mailing of a "complimentary" copy of the petition is not proper service under the Rules of Civil Procedure. 

These days, it is easy to check if a lawsuit is pending, at least in major counties, if not in all courts. Documents in JP court are typically less accessible.

County courts and district courts in Harris, Fort Bend, Dallas, and many other counties, by contrast, make docket information available online. Some even permit online access to images of documents, although this may require user registration. Even if it is not possible to view petitions online, the consumer or defendant’s attorney can check whether a lawsuit has been filed by doing a name search on the Defendant on the court’s electronic docket system. A search can also be done by Plaintiff’s name, but this may yield a large number of search results because debt collection attorneys typically file dozens, if not hundreds of cases each year, at least in the more populous counties.

The official notice of the lawsuit for service purposes is the citation (called summons in federal court and in other states). It is a document that is separate from the plaintiff’s first pleading, which is generally titled Plaintiff’s Original Petition. The petition may include attachments and discovery requests, and if that is the case, the title of the Petition will typically to refer to such discovery requests. 

Some debt collection attorneys even integrate discovery requests into the petition itself as separate numbered paragraphs. This is not proper practice because the civil rules state that discovery, with certain exceptions, should not be filed with the court. Some debt collection attorneys routinely ignore this rule. 

Plaintiff’s attorneys more mindful of the Texas Rules of Civil Procedure serve discovery requests at the same time the lawsuit is served, but do so by serving the discovery requests as separate documents along with the citation and the petition. In that case, the citation should refer to the additional documents being served, otherwise there is no proof that the discovery documents were also served; nor is their proof of the date on which they were served. If the plaintiff’s attorney later wants to base a motion for summary judgment, or for default judgment, on deemed admissions, the record will not contain sufficient evidence that deemed admissions exist because the requests for admissions will not have a certificate of service on them stating that they were served on the defendant on such and such date, and will not contain any alternative proof of service, such as a certified return receipt (green card). Nor would there be a certificate of service relating to the discovery request.

The date of service controls the deadline for answering the lawsuit itself and the deadline for responding to discovery requests (if any are served together with the petition). 

Discovery requests must be answered within 50 days from the date of service if served together with the citation, rather than 30 days when served later in the course of the lawsuit, after the Defendant has answered, or the appearance date has passed.

The time to answer the lawsuit itself varies. There is less time to answer the lawsuit than to answer requests for admission (even if served at the same time with the petition). There are different rules for justice courts and county and district courts. Small claims courts have been abolished (effective August 2013) and could not be used by debt collector even before the legislative amendment.  
   
Additionally, the amount of time from the date of service to appearance day is affected by the day of the week the lawsuit was served, because the appearance day is always a Monday.

METHODS OF SERVICE

Service of lawsuit papers is governed by the civil rules of procedure and may be accomplished by delivery of citation and petition by a civil process server or law enforcement officer, by certified mail, and – in rare cases, and subject to special requirements – by publication in a newspaper and/or newspaper website. 

Debt collection attorneys mostly use civil process servers, and – less commonly – constable or sheriff’s deputies.  
  
If the defendant cannot be found, or does not pick up certified mail, a separate rule provides for alternative methods of service called “substituted” service. This typically involves the attachment of citation and petition on the entrance door or gate at a specified address, assuming no one answers a ring or knock on the door. Substituted service must be specifically authorized by the court in a written order that often also requires that a copy of citation and petition be mailed by certified mail, or by both certified and regular mail.

In order to use alternative service, the plaintiff must file a motion requesting an order for alternative service, and the motion must have an affidavit attached that details the efforts undertaken by the process server to serve the citation. The court may deny the motion if the court finds the information inadequate, or if it appears that the service attempts were at the wrong address.
   
When service is in person, the defendant need not sign anything. Some consumers may think they have not been served because the papers were merely handed to them, but that would be a misconception.

DEFECT IN SERVICE 

Service of citation may have been ineffective if there is a question as to the identity of the person served, or the truthfulness of the process server (so-called "sewer service"). Process servers have to sign the “return” of citation under penalty of perjury and provide date (and time) of service.

If service is by certified/registered mail, the defendant must personally sign the green card, even if it is otherwise common practice for an agent to do so.

Even if there are indications that service was not in conformity with the rules that govern it, or good reason to believe that it was not legally effective, it normally makes little sense to fight over it as long as  no default judgment has yet been rendered.

The vehicle to challenge a defect in service would be a motion to quash service, which would merely delay the deadline for answering. The filing of such a motion would constitute an appearance, and thereby actually accomplish the purpose of service at least in part, i.e. bring the person being sued before the court and preclude a no-answer default judgment. Though rarely an issue, a motion to quash service of citation based on some defect will also have the effect of waiving any complaint about the court’s lack of personal jurisdiction over the defendant. If personal jurisdiction is an issue, it may be necessary to file a special appearance to avoid waiving the issue. 

Does delay in service affect the running of limitations? 

Even if a debt claim is (or appears to be) close to becoming time-barred, this determination is based on the filing date of the lawsuit, not on the date of service or the appearance date, although the plaintiff must show diligence in attempting to procure service if the statute of limitations expires before the defendant is actually served. If the plaintiff fails to demonstrate diligence in getting the lawsuit served, the statute of limitations may provide an effective defense even if the applicable limitations period had not yet expired when the lawsuit was filed.

EFFECT OF FAILURE TO SERVE CITATION

The normal practice is for a debt plaintiff to file suit and request issuance of citation at the same time. But a lawsuit may also be filed without requesting issuance of citation, with the result that the lawsuit will merely sit on the docket. Although rare in debt case, sometimes there is a tactical advantage doing this for timing reasons. If a lawsuit is anticipated by the other side, filing first may confer certain advantages.

If the other party remains unaware of the filing, and files its own lawsuit against the plaintiff in the first suit, the two lawsuits will likely be consolidated (if both were filed in the same court system or even in the same court), or the second suit will be put on hold (abated) under the dominant jurisdiction doctrine even if there would not be any reason for the second court to lack jurisdiction otherwise.

The information on and in a filed lawsuit will be available as a public record, and may even get published in a local newspaper, on a community website or blog, or on a legal-oriented web site. A law suit in which no service was requested may linger on the docket for years, but may terminate earlier for a number of reasons. Among the possible scenarios: The defendant may become aware of the lawsuit and decide to file an answer. Even a handwritten letter by the defendant addressed to the judge may be enough to be deemed an answer, and thus constitute an appearance.

If nothing further happens, the lawsuit may be dismissed by the judge for want of prosecution, but that will depend on whether the court (or clerk serving multiple courts) has a system that tracks the aging of active lawsuits, and a policy to send notice of intent to dismiss for want of prosecution that sets a deadline for certain actions to be taken, and a warning of the court’s intent to dismiss the case if of the specified events occur. (-->DWOP)(-->Samples of DWOP notices; samples of DWOP orders). The court must first give notice to the plaintiff of its intent to dismiss a case for want of prosecution. Some court and/or counties do not have a system in place that monitors cases in which only a petition is on file and triggers a process of having them dismissed after giving the plaintiff a written notice and opportunity to take specified actions to prevent dismissal.

CONSEQUENCES OF FAILURE TO FILE AN ANSWER

If the Defendant has been served, but does not answer, the plaintiff may move for default judgment. In order to be entitled to default judgment, the plaintiff must satisfy certain requirements that go beyond proof that the defendant was served.