Full Opinion

In The Court of Appeals Seventh District of Texas at Amarillo No. 07-25-00375-CV MEFMET AHMETI, 190 STACY CO, 1941 PRESTON CO, AND 2600 7TH CO, APPELLANTS V. CNB GLOBAL, INC., APPELLEE On Appeal from the 342nd District Court Tarrant County, Texas 1 Trial Court No. 342-359005-24, Honorable Kimberly Fitzpatrick, Presiding November 2, 2026 MEMORANDUM OPINION Before PARKER, C.J., and DOSS and YARBROUGH, JJ. 1 Originally appealed to the Second Court of Appeals, this case was transferred to this Court by the Texas Supreme Court pursuant to its docket-equalization efforts. See TEX. GOV’T CODE § 73.001. Under Texas Rule of Civil Procedure 41.3, we follow the precedent of the transferor court in the event of a conflict between that court’s precedent and our own. TEX. R. APP. P. 41.3. Appellants, Mefmet Ahmeti, 190 Stacy CO, 1941 Preston CO, and 2600 7th CO, appeal the trial court’s entry of default judgment in favor of appellee, CNB Global, Inc. We affirm the default judgment in part and reverse and remand in part. BACKGROUND On June 10, 2024, Appellants and CNB entered into an Asset Purchase Agreement by which CNB would acquire three restaurants operating under the name “Goat & Vine Restaurant + Winery.” Soon thereafter, on October 25, CNB filed its original petition against Appellants claiming that Ahmeti, on behalf of the business entities, made several material misrepresentations upon which CNB relied in purchasing the restaurants. CNB alleged claims for breach of contract, unjust enrichment, fraudulent inducement, negligent misrepresentation, money had and received, and violations of the Texas Deceptive Trade Practices Act (DTPA). CNB attempted to serve Ahmeti, both individually and as registered agent for the business entities, at 5100 Breezewind Lane, Fort Worth, Texas, on three occasions without success. CNB moved the trial court for substituted service but the court did not rule on the motion. CNB also attempted to serve Ahmeti at 1524 Marion Street, Schaumberg, Illinois. Six unsuccessful service attempts were made at this address. On one of these attempts, a neighbor informed the process server that the family was away on spring break and the house sitter was using the daughter’s vehicle while they were away. The vehicle was registered to Kujtime Ahmeti. After CNB was unsuccessful in serving Appellants, it moved the trial court for substituted service. As for the business entities, CNB sought service through the 2 Secretary of State. The trial court approved this means of substituted service. The Secretary’s Whitney certificate, however, expressly indicates that service was forwarded to Ahmeti as the registered agent for the business entities rather than being sent to the entities’ address on file with the Secretary. As for Ahmeti, the trial court ordered service by attaching the petition and citation to the front door of Ahmeti’s residence (the Marion Street address) and emailing the petition and citation to Ahmeti’s email address: mattameti@yahoo.com. Affidavits of service were returned confirming that Ahmeti was served in accordance with the trial court’s order. When Appellants still had not filed an answer, CNB moved for default judgment against all defendants. The trial court heard evidence regarding the amount of unliquidated damages. After hearing this evidence, on July 30, 2025, the trial court entered default judgment against each defendant jointly and severally and awarded CNB actual damages of $5,859,022.56, treble damages under the DTPA of $11,718,045.12, and attorney’s fees of $26,433.10, along with pre- and post-judgment interest. On August 29, Appellants timely filed a motion for new trial in which they contend that the trial court never acquired personal jurisdiction over Appellants because service of process was defective. In the alternative, Appellants argue that they satisfied the Craddock elements. The trial court denied the motion for new trial and Appellants timely filed notice of appeal. By their appeal, Appellants present three issues. Appellants contend, in their first issue, that substituted service did not strictly comply with the applicable rules and the trial court never acquired personal jurisdiction over them. Next, Appellants contend that the 3 trial court abused its discretion in denying their motion for new trial because service was defective and they satisfied the Craddock elements. Finally, Appellants contend that the trial court’s award of unliquidated damages in its default judgment was not supported by legally or factually sufficient evidence. PERSONAL JURISDICTION By their first issue, Appellants challenge the trial court’s personal jurisdiction to enter default judgment against them because CNB failed to show strict compliance with the rules of service. Standard of Review A trial court must have personal jurisdiction over the defendants at the time a default judgment is entered or the default judgment was not properly rendered. See TEX. R. CIV. P. 124; Garcia v. Ennis, 554 S.W.3d 209, 214 (Tex. App.—Fort Worth 2018, no pet.). Personal jurisdiction in the trial court depends on proper service of process. Garcia, 554 S.W.3d at 214; see Livanos v. Livanos, 333 S.W.3d 868, 874 (Tex. App.—Houston [1st Dist.] 2010, no pet.) (“A claim of a defect in service of process challenges the trial court’s personal jurisdiction over the defendant.”). Whether a trial court has personal jurisdiction over a defendant is a legal question that we review de novo. Richardson v. Builder Servs. Grp., Inc., No. 02-24-00349-CV, 2025 Tex. App. LEXIS 3198, at *6 (Tex. App.—Fort Worth May 8, 2025, no pet.) (mem. op.). We indulge in no presumption in favor of proper issuance, service, or return of citation. Spanton v. Bellah, 612 S.W.3d 314, 316 (Tex. 2020) (per curiam). If the record does not “affirmatively show strict compliance with the Rules of Civil Procedure,” we will 4 conclude that the attempted service of process was “invalid and of no effect.” Wilson v. Dunn, 800 S.W.2d 833, 836 (Tex. 1990). “[A] no-answer default judgment cannot stand when the defendant ‘was not served in strict compliance with applicable requirements.’” Spanton, 612 S.W.3d at 316 (quoting Wilson, 800 S.W.2d at 836). Any doubts about a default judgment must be resolved against the party who secured the default judgment. In re Lakeside Resort JV, LLC, 689 S.W.3d 916, 922 (Tex. 2024) (orig. proceeding) (per curiam). We must bear in mind that default judgments are greatly disfavored under Texas law as we have a strong policy preference for adjudicating cases on the merits. Tabakman v. Tabakman, 728 S.W.3d 703, 707 (Tex. 2025) (per curiam). Substituted Service “Texas law prefers personal service over substitute service.” Vespa v. Nat’l Health Ins. Co., 98 S.W.3d 749, 751 (Tex. App.—Fort Worth 2003, no pet.). Substituted service is only allowed after efforts at personal service fail. State Farm Fire & Cas. Co. v. Costley, 868 S.W.2d 298, 298–99 (Tex. 1993) (per curiam). When substituted service occurs, it must strictly comply with the order authorizing it because the order “is the sole basis of authority authorizing substituted service . . . .” Vespa, 98 S.W.3d at 752. The trial court may authorize substituted service after a motion is filed that is supported by a sworn statement listing any location where the defendant can probably be found and stating specific facts showing that service has been attempted in accordance with the rules at a named location but has not been successful. TEX. R. CIV. P. 106(b). When substituted service is authorized by the trial court, proof of service must be made in the manner ordered by the court. TEX. R. CIV. P. 107(f). Whether service strictly complied with the 5 rules is a question of law that we review de novo. Furst v. Smith, 176 S.W.3d 864, 869 (Tex. App.—Houston [1st Dist.] 2005, no pet.). Service on Business Entities Appellants contend that service on the business entities through the Secretary of State is defective because the Secretary of State forwarded the service to the wrong address. Section 5.251 of the Texas Business Organizations Code provides that the “[S]ecretary of [S]tate is an agent of an entity for purposes of service of process, notice, or demand on the entity if . . . the registered agent of the entity cannot with reasonable diligence be found at the registered office of the entity . . . .” TEX. BUS. ORGS. CODE § 5.251(1)(B). After service is made on the Secretary of State, the Secretary is obligated to immediately send notice “addressed to the most recent address of the entity on file with the [S]ecretary of [S]tate . . . .” TEX. BUS. ORGS. CODE § 5.253. A certificate from the Secretary of State is generally conclusive evidence that the Secretary “received service of process . . . and forwarded the service as required by the statute.” Capitol Brick, Inc. v. Fleming Mfg. Co., 722 S.W.2d 399, 401 (Tex. 1986) (op. on reh’g). However, the fact that service was forwarded by the Secretary does not establish that it was forwarded to the proper address. See Wachovia Bank of Del. v. Gilliam, 215 S.W.3d 848, 850 (Tex. 2007) (per curiam) (Capitol Brick addressed whether service forwarded, not where service was forwarded). Unless the Secretary’s certificate expressly certifies that the forwarding address is the one required by statute, we cannot presume that it was. Id. 6 In the present case, the certificate of the Secretary of State indicates that service for each of the business entities was forwarded to “Reg Agt-Mefmet Ahmeti, 5100 Breezewind Ln, Fort Worth, TX 76123.” The Secretary of State’s website identifies the address of 190 Stacy CO as “1006 S Locust Ave, Freeport, IL 61032-5408.”2 The Secretary’s website identifies the same Freeport address for 2600 7th CO, while identifying “2001 W Saint James Rd, Orangeville, IL 61060-9445” as the address for 1941 Preston CO. 3 The statute explicitly requires the Secretary of State to forward service to the “address of the entity” and not the address of its registered agent. TEX. BUS. ORGS. CODE § 5.253(b). 4 Consequently, the face of the record shows that substituted service was not in strict compliance with the applicable statute rendering it “invalid and of no effect.” Wilson, 800 S.W.2d at 836; see Wachovia, 215 S.W.3d at 851 (“As nothing in the record shows that the Secretary of State forwarded process to Wachovia’s home office or principal office as required by the statutes on which the plaintiffs rely, error is apparent on the face of the record.”). 2 A printout of the Secretary of State’s website was attached to CNB’s motion for substituted service. 3While these website printouts were not presented to the trial court, they were included by Appellants in the appendix to their brief. When adjudicative facts are matters of public record and are provided to the Court, we have discretion to take judicial notice of such facts on our own motion and for the first time on appeal. Rockstar Remodeling & Diamond Decks, LLC v. Taddia, No. 03-19-00657-CV, 2020 Tex. App. LEXIS 2672, at *4 n.2 (Tex. App.—Austin Apr. 1, 2020, no pet.) (mem. op.) (citing In re Estate of Hemsley, 460 S.W.3d 629, 638 (Tex. App.—El Paso 2014, pet. denied)); see also Huffman Asset Mgmt., LLC v. Colter, 740 S.W.3d 476, 484 (Tex. 2026). Further, both parties to the present appeal request this Court take judicial notice of these printouts from the Secretary of State’s website. 4 That the statute requires the Secretary to forward service to the address of the entity rather than to the registered agent is the only logical construction since substitute service on the Secretary of State is only authorized after the entity’s registered agent cannot with reasonable diligence be found. See TEX. BUS. ORGS. CODE § 5.251(1)(B). 7 CNB argues that “[s]ubstitute service through the Secretary of State is achieved by delivering a copy of the citation and petition to the registered agent’s address on file.” However, CNB fails to identify any authority for this contention. CNB does not address the language of Texas Business Organizations Code section 5.253 that provides that the Secretary of State must forward service to the “address of the entity . . . .” TEX. BUS. ORGS. CODE § 5.253(b). When we construe a statute, we are to determine the legislature’s intent as expressed through the actual language it used. City of Rockwall v. Hughes, 246 S.W.3d 621, 625 (Tex. 2008). To construe section 5.253 to allow service to be forwarded to the same party that could not be served with reasonable diligence at the same address would be an absurd result. Id. at 625–26. Because the record does not show that service was forwarded to the appropriate address of the business entities and thus not in strict compliance with section 5.253, we reverse the default judgment against the business entities and remand those claims to the trial court. Wilson, 800 S.W.2d at 836. Further, because we conclude that service was ineffective on the business entities, consideration of their further issues is pretermitted. TEX. R. APP. P. 47.1. Service on Ahmeti Appellants also contend that the substituted service on Ahmeti is defective because the affidavit in support of the motion for substituted service was insufficient to comply with Texas Rule of Civil Procedure 106(b). Substituted service may be authorized by the trial court after a motion is filed that is supported by a sworn statement listing any location where the defendant can probably 8 be found and stating specific facts showing that service has been attempted in accordance with the rules at a named location but has not been successful. TEX. R. CIV. P. 106(b). “The affidavit must list the ‘location where the defendant can probably be found’ and must state specifically the facts showing that the traditional methods of service have been attempted unsuccessfully at that location.” Richardson, 2025 Tex. App. LEXIS 3198, at *7. Before a judge may order substituted service under Rule 106, “there must be evidence of probative value that the location stated in the affidavit is the defendant’s usual place of business or usual place of abode or other place where the defendant can probably be found.” Garrels v. Wales Transp., Inc., 706 S.W.2d 757, 759 (Tex. App.— Dallas 1986, no writ). “A diligent search must include inquiries that someone who really wants to find the defendant would make, and diligence is measured not by the quantity of the search but by its quality.” In re E.R., 385 S.W.3d 552, 564 (Tex. 2012) (footnote omitted). Substitute service may not properly issue if the affidavit supporting the motion is conclusory or otherwise insufficient. Wilson, 800 S.W.2d at 836; Richardson, 2025 Tex. App. LEXIS 3198, at *7. Appellants argue that the affidavit used to support CNB’s “motion for substitute service did not state that the address where service was attempted was defendant’s usual place of business or usual place of abode or other place where the defendant can probably be found.” (internal quotations omitted). CNB argues that Garrels stands for the proposition that the affidavit must supply evidence that the address at which service was attempted is Ahmeti’s usual abode or a place where he can probably be found but does not require the affidavit to use talismanic language. We agree with CNB’s construction of Garrels. See Garrels, 706 S.W.2d at 759 (holding that evidence of probative value 9 must show that location stated in affidavit is defendant’s usual place of business, abode, or place where he can probably be found). In the present case, we conclude that there is evidence of probative value that the location that CNB attempted to serve was Ahmeti’s usual place of abode that justified the trial court’s authorization of substituted service under Rule 106. The affidavit regarding attempted service at 1524 Marion Street in Schaumberg, Illinois, states that, after four unsuccessful attempts at service at the address, a neighbor informed the process server that the family was away for spring break and that the daughter’s Jeep was being used by a house sitter. The affidavit indicates that the Jeep in the driveway was registered to “KUJTIME AHMETI.” We conclude that the neighbor’s specific identification of the Jeep as belonging to the family’s daughter and the affidavit further providing that the Jeep is registered to a Kujtime Ahmeti is probative evidence that the address is a location where Ahmeti can probably be found. Further, while not cited in the affidavit, the record reflects that Ahmeti acknowledges that the Marion Street address is his residence in an affidavit. Likewise, the lease agreement for each business entity identifies Ahmeti as guarantor and identifies the Marion Street address as his residence. Substituted service may be made by other means, including by email, that “the [affidavit] or other evidence shows will be reasonably effective to give the defendant notice of the suit.” TEX. R. CIV. P. 106(b)(2). While the affidavit makes no mention of Ahmeti’s email address, there is probative evidence in the record that “mattameti@yahoo.com” is Ahmeti’s email address, including the asset purchase agreement Ahmeti signed identifying this email as a contact for the seller, an assignment of the lease signed by Ahmeti identifying this email as his contact, and audit reports 10 related to the transaction showing that Ahmeti accessed documents sent to that email and responded from same. The trial court ordered Ahmeti served at the mattameti@yahoo.com address and the affidavit of service attests that service was made on this email address. Because both the affidavit and record show that 1524 Marion Street, Schaumberg, Illinois, is a location where Ahmeti can probably be found and the record includes other evidence that “mattameti@yahoo.com” is an email address that will be reasonably effective to give Ahmeti notice of the suit, we conclude that service was proper on Ahmeti, individually, and the trial court had jurisdiction to enter default judgment against him in that capacity. See TEX. R. CIV. P. 106; Garrels, 706 S.W.2d at 759. DENIAL OF MOTION FOR NEW TRIAL By their second issue, Appellants contend that the trial court abused its discretion by denying their motion for new trial. They contend that the trial court was obligated to grant their motion because service did not strictly comply with the rules of service 5 and because they met the elements of Craddock. An appellate court reviews a trial court’s denial of a motion to set aside a default judgment and grant a new trial for abuse of discretion. Cliff v. Huggins, 724 S.W.2d 778, 778 (Tex. 1987). In assessing whether the trial court abused its discretion, we must 5 We have addressed this issue regarding strict compliance with the rules of service above and concluded that service on the business entities was invalid and of no effect and, therefore, the trial court did not have jurisdiction to enter default judgment against them. However, we also determined that service on Ahmeti, individually, was valid. We do not again address that issue here. TEX. R. APP. P. .47.1. 11 decide whether it acted without reference to any guiding rules or principles or whether its act was arbitrary or unreasonable. Cire v. Cummings, 134 S.W.3d 835, 838–39 (Tex. 2004). When no findings of fact and conclusions of law are filed, the denial of a motion to set aside the default judgment and for new trial must be upheld on any legal theory supported by the evidence. Kinara v. Ongera, No. 02-22-00068-CV, 2022 Tex. App. LEXIS 8440, at *9 (Tex. App.—Fort Worth Nov. 17, 2022, no pet.) (mem. op.). A trial court must grant a new trial when the defaulting party establishes that: (1) his failure to appear was not intentional or the result of conscious indifference but was the result of accident or mistake, (2) the motion sets up a meritorious defense, and (3) granting the motion will not cause delay or work other injury to the prevailing party. Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922, 925 (Tex. 2009) (per curiam). This is known as the Craddock test. See Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex. 1939). To prevail on a motion for new trial, the defaulting party must (1) allege facts and attach affidavits to a verified motion to set aside the default judgment or motion for new trial that would meet the Craddock elements or (2) present evidence at the hearing on its motion that meets those requirements. Pickell v. Guar. Nat’l Life Ins. Co., 917 S.W.2d 439, 443 (Tex. App.—Houston [14th Dist.] 1996, no writ); see TEX. R. CIV. P. 324(b)(1) (motion to set aside default judgment is complaint on which “evidence must be heard”). A new trial must be granted when a party satisfies all three elements of the Craddock test. Tabakman, 728 S.W.3d at 708. After the trial court issued its default judgment in favor of CNB, Appellants filed a motion for new trial. In their motion, Appellants contend that their failure to answer was not intentional because Ahmeti was traveling when service was attached to the front door 12 of his residence and that his “justifiable reliance on counsel prohibited the filing of a timely answer . . . .” Attached to their motion was Ahmeti’s declaration. Ahmeti acknowledges that substituted service was authorized on April 22, 2025, and was executed on April 30 (residence) and May 1 (email). He claims that he never received the email service and that, because he was in Rome from April 20 to May 4, his in-laws discovered the notice posted at his residence but “held on to the documents before informing [him] of their existence.” Ahmeti does not identify the date he learned of the lawsuit. He claims that upon learning of the lawsuit, he “immediately” contacted Richard Miller, his “Illinois attorney,” so that Miller could locate Texas counsel. His statement indicates that Ahmeti took no further action regarding the lawsuit after contacting Miller. In an affidavit attached to Appellants’ motion, Miller stated that upon learning of the lawsuit, he “diligently looked for local counsel.” Miller does not identify when Ahmeti contacted him. He indicates that he contacted the trial court and was informed that the suit was set to be dismissed for want of prosecution on July 25. Miller contacted the trial court on July 30 and was informed that a prove-up hearing was on the docket for that afternoon. Miller indicates that he attempted to call into the hearing via Zoom but was unsuccessful. He does not identify any additional steps he took regarding the trial court’s likely entry of default judgment against Appellants. The record reflects that the next action taken by Appellants was the filing of their motion for new trial on August 29. Ahmeti’s declaration indicates that, after substituted service was made on him, he contacted his Illinois attorney but took no action to follow up and ensure that a default judgment was not taken against him. His declaration fails to identify any date upon which he received notice and against which his actions can be considered in determining 13 whether he acted consciously indifferent. Rather, he concludes that it was reasonable for him to believe that the matter had been handled by his Illinois counsel, and that it was justifiable to rely on counsel to ensure that the correct steps were taken to answer and appear in this matter. It is significant that Ahmeti’s declaration states that he contacted Miller to locate Texas counsel and not to ensure that an answer was filed. The statements made by Ahmeti in his declaration are insufficient to show that his failure to answer was the result of an accident or mistake rather than being intentional or consciously indifferent. See 1 Solar Sol., LLC v. S&A Wholesale Inc., No. 02-25-00220-CV, 2025 Tex. App. LEXIS 8204, at *9–10 (Tex. App.—Fort Worth Oct. 23, 2025, no pet.) (mem. op.) (factually insufficient and conclusory declaration does not show accident or mistake rather than conscious indifference); Motiograph, Inc. v. Matthews, 555 S.W.2d 196, 197 (Tex. Civ. App.—Dallas 1977, writ ref’d n.r.e.) (“[T]hese statements are merely conclusory and do not set forth sufficiently specific facts from which the trial court or this court can determine whether the conscious indifference standard has been met.”). Ahmeti contends that it was reasonable of him to rely on his Illinois counsel to take steps to answer the lawsuit. When a defendant relies on his agent to file an answer, he must demonstrate that neither he nor his agent acted with conscious indifference. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992). Here, when informed that the case had been placed on the dismissal docket, Miller simply assumed that the case would be dismissed. 6 Such a mistaken belief that the case had been dismissed simply 6 Miller’s assumption is manifested by the evolution of his statements relating to the status of this case. Miller starts by referring to the case being “set to be dismissed,” then stating that the matter “was being dismissed,” and finally stating that “the case was dismissed.” 14 because it was on the dismissal docket does not negate that the failure to file an answer was intentional or due to conscious indifference. See Walker v. Gutierrez, 111 S.W.3d 56, 63 (Tex. 2003) (citing Butler v. Dal Tex Mach. & Tool Co., 627 S.W.2d 258, 260 (Tex. App.—Fort Worth 1982, no writ), for proposition that attorney who failed to answer because he did not understand citation not a mistake of law negating conscious indifference). However, even after he was notified that the case was scheduled for a prove-up hearing, the only action Miller took was to attempt to call in to the hearing via Zoom. So, after being aware that the case had not been dismissed and was proceeding to a likely default judgment, Miller does not identify any additional actions he took to make an appearance or file an answer on behalf of Appellants. We conclude that such inaction constitutes conscious indifference. Appellants cite Rozanc v. Nance, No. 02-23-00018-CV, 2023 Tex. App. LEXIS 7101, at *13 (Tex. App.—Fort Worth Sept. 7, 2023, no pet.) (mem. op.), in support of their contention that a client satisfies the first prong of Craddock when an attorney misleads the client and the client is free of responsibility and knowledge. We find the situation in Rozanc to be distinguishable from the case at bar. In Rozanc, the defendant retained counsel to answer the lawsuit. Id. at *14. The defendant frequently contacted counsel’s office seeking status updates and was assured that the case was being handled. Id. The attorney twice attempted to file an answer but the filing was rebuffed by the district clerk. Id. The attorney made no further efforts to file an answer and failed to communicate that an answer had not and would not be filed to the defendant. Id. By contrast, here, Ahmeti hired Miller to locate Texas counsel rather than to file an answer. After taking this action, Ahmeti made no effort to follow up until he received the trial court’s default judgment. 15 Miller, after being informed that the case was scheduled for a prove-up hearing, attempted to join the Zoom hearing but, when this proved unsuccessful, made no further effort to resolve the matter. As endorsed by the Rozanc court, “[i]t is reasonable to assume that when a prudent person is served with a petition concerning a lawsuit and is relying on his agent to represent his interest, he is going to make sure that his agent is using due diligence in handling the lawsuit.” Id. at *14–15 (quoting Mem’l Hosp. Sys. v. Fisher Ins. Agency, Inc., 835 S.W.2d 645, 652 (Tex. App.—Houston [14th Dist.] 1992, no writ) (op. on reh’g)). We conclude that the actions of both Ahmeti and Miller show a conscious indifference to whether an answer was timely filed. See Estate of Pollack v. McMurrey, 858 S.W.2d 388, 391 (Tex. 1993) (op. on reh’g) (when defendant relies on agent to file answer, defendant must establish that failure to file answer was not the result of his or the agent’s conscious indifference). Having concluded that Ahmeti failed to meet his burden of proof on the first Craddock factor, we need not address the other two factors. Dixie House Café, Inc. v. Eckman, No. 02-24-00280-CV, 2025 Tex. App. LEXIS 308, at *5 n.1 (Tex. App.—Fort Worth Jan. 23, 2025, no pet.) (mem. op.). SUFFICIENCY OF EVIDENCE ON DAMAGES By their third issue, Appellants contend that the evidence of unliquidated damages is insufficient to support the actual damages awarded by the trial court. Specifically, they challenge two awards that were requested and received: $1,262,780 in overpayment 16 damages and $4,041,176 in lease-liability damages. 7 They contend that the evidence supporting these amounts is speculative and conclusory. When a default judgment is taken on an unliquidated damages claim, the defendant’s failure to answer admits the petition’s factual allegations except for the amount of damages. Argyle Mech., Inc. v. Unigus Steel, Inc., 156 S.W.3d 685, 687 (Tex. App.—Dallas 2005, no pet.) (citing Holt Atherton, 835 S.W.2d at 83). Because unliquidated damages are not admitted, the trial court must hear evidence establishing the amount of damages before rendering judgment. TEX. R. CIV. P. 243; Argyle Mech., 156 S.W.3d at 687. When a default judgment does not itemize damages, it is generally impossible to determine what portion of damages were ascribed to each ground of recovery claimed by the plaintiff. Dawson v. Briggs, 107 S.W.3d 739, 749 (Tex. App.— Fort Worth 2003, no pet.). A defendant may challenge the legal and factual sufficiency of the evidence supporting unliquidated damages on appeal from a no-answer default judgment. Id. at 748. In conducting a legal sufficiency review, we consider only the evidence and reasonable inferences that support the finding, viewed in the light most favorable to the judgment and disregarding contrary evidence. Id. In a factual sufficiency review, we consider all the evidence and determine whether the evidence supporting the finding is 7 Appellants argue that the default judgment is based on an itemized list of damages that CNB identified in its motion for default judgment. While the default judgment’s award of actual damages generally comports with the total of all itemized awards identified in the motion for default judgment, the default judgment does not itemize its award of actual damages and, instead, awards a lump sum of $5,859,022.56 in actual damages. 17 so weak, or the contrary evidence so overwhelming, that the judgment should be set aside and a new trial ordered. Id. Expert opinion testimony on an ultimate issue is admissible and an expert may testify in terms of opinion or inference and give the reasons therefor without prior disclosure of the underlying facts or data. Paradigm Oil, Inc. v. Retamco Operating, Inc., 242 S.W.3d 67, 74 (Tex. App.—San Antonio 2007, pet. denied) (citing TEX. R. EVID. 704, 705). However, “[o]pinion testimony that is conclusory or speculative . . . is ‘incompetent evidence,’ and . . . cannot support a judgment.” Coastal Transp. Co. v. Crown Cent. Petro. Corp., 136 S.W.3d 227, 232 (Tex. 2004). An expert’s opinion is speculative or conclusory when there is no factual substantiation of the opinion contained in the record. Paradigm Oil, 242 S.W.3d at 74. “In other words, the expert must explain how he reached his conclusion.” United Servs. Auto. Ass’n v. Croft, 175 S.W.3d 457, 464 (Tex. App.— Dallas 2005, no pet.). “Opinion testimony on damages must be supported by objective facts, figures[,] or data from which the amount may be ascertained with reasonable certainty; if it is not, it is speculative and conclusory and will not support a judgment.” Paradigm Oil, 242 S.W.3d at 74 (citing Szczepanik v. First S. Trust Co., 883 S.W.2d 648, 649 (Tex. 1994) (per curiam)). As for the overpayment award, CNB offered the declaration of Bernard Cho, its corporate representative, and a forensic analysis prepared by Sung Lee, a retained accountant. Cho’s declaration essentially agrees with Lee’s opinion regarding the overpayment amount. Lee’s report identifies the methodology he used in reaching his opinion, but the record is incomplete to provide factual substantiation for his opinion. Lee indicates that he identified “suspicious sales transactions” and “operating expenses [that] 18 were not recorded or understated.” Yet, nothing in his report attempts to identify inflated sales or diminished losses. Attached to Cho’s declaration are sales accountability reports for each of the restaurants that arguably allow us to determine the alleged inflation of sales. However, there is no record evidence reflecting any diminishment of expenses. 8 Consequently, Lee’s valuation is speculative and conclusory. CNB did not present sufficient information to allow the trial court to confirm the expert’s conclusion regarding the amount CNB overpaid. Id. Because the evidence is insufficient to support this award of damages, we reverse that portion of the judgment awarding CNB $5,859,022.56 in actual damages. Because the trial court also awarded treble damages for CNB’s claims under the DTPA, and those damages are directly based on the judgment’s award of actual damages, see Household Fin. Corp. III v. DTND Sierra Invs., LLC, No. 04-13-00033-CV, 2013 Tex. App. LEXIS 13649, at *33–34 (Tex. App.—San Antonio Nov. 6, 2013, no pet.) (mem. op.), we also necessarily reverse the award of $11,718,045.12 in treble damages. While Appellants do not challenge the trial court’s $26,433.10 award of attorney’s fees, we must reverse this portion of the damages award also because for a prevailing party to be entitled to attorney’s fees, it must be entitled to recover actual damages. Id. at *35. We reverse the default judgment’s award of damages against Ahmeti and remand for a new trial to determine the appropriate amount of damages to be assessed against Ahmeti individually. 8 An “Analysis” attached to Lee’s report indicates that there was an “unrecorded utility expense” of $70,776 relating to the Fort Worth location. However, nothing in the record identifies the basis for this unrecorded expense. 19 CONCLUSION Having determined that the default judgment against 190 Stacy CO, 1941 Preston CO, and 2600 7th CO was improper, we reverse the default judgment as it relates to those defendants and remand to the trial court for further proceedings. See Wilson, 800 S.W.2d at 838. We affirm the portion of the default judgment relating to Ahmeti’s liability, and reverse and remand the portion of the judgment relating to damages assessed against him. See Southland Mower Co. v. Jordan, 587 S.W.2d 215, 217 (Tex. Civ. App.— Fort Worth 1979, writ ref’d n.r.e.). Judy C. Parker Chief Justice 20