BILL ANALYSIS



C.S.H.B. 2788
By: Oliveira
May 4, 1995
Committee Report (Substituted)


BACKGROUND

A default judgment may be reversed against an out of state
defendant if the defendant has not received notice of the
proceeding.  That defendant may also have a default judgment
reversed even if there is an error in the way the case is pled or
if they refuse to claim their certified mail, and even when the
defendant did in fact have actual notice of the pending proceeding
at an address previously agreed to in a written agreement.  The out
of state defendant must only file a "writ of error" stating that
the Texas resident did not follow the procedure for pleading or
service of process to the letter, possibly by leaving out specific
wording in the petition to the secretary of state, such as "home or
home office" when referring to the residence of the out of state
defendant.

PURPOSE

The bill would prevent an out of state defendant from evading
service.  Specifically, if an out of state defendant does business
in Texas and fails to designate a registered agent, and then enters
into a written agreement designating a specific address for
service, that defendant should be precluded from reversing a
default judgment by claiming lack of service of process when notice
is sent to the address specified by the defendant in the written
agreement.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.

SECTION BY SECTION ANALYSIS

     SECTION 1.     Amends Section 17.045 (a) and (d), Civil
Practice and Remedies Code, by adding language pertaining to
party's requests for services and requirements that notices be sent
registered mail. 

     SECTION 2.     Emergency clause - effective immediately.

COMPARISON OF ORIGINAL TO SUBSTITUTE

In Section 17.045 (a) language is added to require the party
requesting service to provide a statement with the address where it
is reasonably believed that the nonresident can be served with
process, to the Secretary of State.

Includes in Section 17.045 (d) a requirement that all process or
notice referenced in this section be sent registered or certified
mail, return receipt requested.  Whether the nonresident takes
possession of the notice, process is effective upon receipt of
proof that the resident has actual or constructive notice of the
lawsuit thirty days prior to the entering of a default judgment.

Deletes the language in the original bill in Section 17.045 (f). 
The deleted language provided that no default judgment would be
invalidated if it shall be proved that the person against whom the
judgment was taken had received actual or constructive notice at
least twenty days prior to the entry of the default judgment. 

Allows thirty days instead of twenty days for notice prior to the
entering of the default judgment.  Deletes the requirement that the
designated address in the written contract be the place for service
of process.  The new language allows the party requesting service
on the nonresident from the secretary to designate the address
where the requestor reasonably believes the nonresident may be
served with process.  The new language does not mention the 180 day
evidentiary hearing as mentioned in the original bill.

SUMMARY OF COMMITTEE ACTION

H.B. 2788 was considered in a public hearing on April 19, 1995 by
the Committee on Civil Practices. The following individuals
testified in support of the bill: Aaron L. Jackson, attorney,
representing himself and Bob Walker; Robert Walker, representing
himself; and Mike Slack, attorney, representing himself and the
Texas Trial Lawyers Association. No one testified in opposition to
or neutrally on the bill. The committee considered a complete
substitute, which was adopted without objection. The bill was left
pending. H.B. 2788 was considered during a formal meeting on May 2,
1995. H.B. 2788 was reported favorably, as substituted, with the
recommendation that it do pass and be printed, by a record vote of
five ayes, zero nays, one pnv and three absent.