Full Opinion

In The Court of Appeals Seventh District of Texas at Amarillo No. 07-26-00205-CV PLV WAUGH LLC D/B/A PIZZA BIRRA VINO AND ALBERT ORTIZ, APPELLANTS V. TITAN ASSET PURCHASING, LLC, APPELLEE On Appeal from the County Court at Law Number 1 Tarrant County, Texas 1 Trial Court No. 2024-005385-1, Honorable Don Pierson, Presiding November 3, 2026 MEMORANDUM OPINION Before PARKER, C.J., and DOSS and YARBROUGH, JJ. PLV Waugh LLC d/b/a Pizza Birra Vino and Albert Ortiz, appellants, bring this appeal from a no-answer default judgment. PLV and Ortiz contend that the trial court erred by (1) entering the default judgment against them in favor of appellee Titan Asset Purchasing, LLC, and (2) denying their motion for new trial. We affirm. 1 Originally appealed to the Second Court of Appeals, this appeal was transferred to this Court by the Texas Supreme Court pursuant to its docket-equalization efforts. See TEX. GOV’T CODE § 73.001. In the event of any conflict, we apply the transferor court’s case law. TEX. R. APP. P. 41.3. BACKGROUND In 2024, Titan filed suit against PLV for breach of contract and against Ortiz, PLV’s sole owner, for breach of guaranty. Titan received citations to serve Ortiz individually and PLV via its registered agent, Anchor Restaurants, LLC, at 6300 Dixie Drive in Houston. Titan identified Ortiz as the registered agent of Anchor Restaurants. A private process server attempted service at that address four times between March 4, 2025, and May 5, 2025. Neither defendant had been served when Ortiz filed a petition for bankruptcy relief in the Southern District of Texas on April 1, 2025. The process server signed a return of due diligence on May 5, 2025, stating he was unable to serve the defendants. Ortiz’s bankruptcy case was dismissed on July 30, 2025. Titan then filed its first amended petition on August 22, 2025. In its pleading, Titan asserted that PLV’s registered agent could not, with reasonable diligence, be found at the registered agent’s address. Titan also filed the process server’s return of due diligence. Titan requested service on PLV by and through the Texas Secretary of State pursuant to section 5.251 of the Texas Business Organizations Code. The Secretary of State’s return of service recites that the Secretary received a copy of the citation and Titan’s first amended petition on September 2, 2025. It further recites that on September 23, 2025, the Secretary of State forwarded a copy of the citation and pleading by certified mail, return receipt requested, to “PLV Waugh LLC D/B/A Pizza Birra Vino, Registered Agent, Albert Ortiz” at 6300 Dixie Drive in Houston and that the return receipt was received on September 29. Ortiz was personally served September 12, 2025, at 6300 Dixie Drive in Houston. 2 Neither PLV nor Ortiz filed an answer to the suit. Titan filed a motion for default judgment, which the trial court granted. It signed a final judgment on November 30, 2025. PLV and Ortiz filed a motion for new trial, which was overruled by operation of law. ANALYSIS Standard of Review Default judgments are disfavored under Texas law and cannot be sustained without meticulous adherence to service requirements. Huffman Asset Mgmt., LLC v. Colter, 740 S.W.3d 476, 480–81 (Tex. 2026) (citing Shamrock Enters., LLC v. Top Notch Movers, LLC, 728 S.W.3d 693, 699 (Tex. 2026)). Review of a default judgment focuses on why a defendant did not appear. Fid. & Guar. Ins. Co. v. Drewery Constr. Co., 186 S.W.3d 571, 574 (Tex. 2006). If an absent party could have appeared but chose not to, entry of a default judgment is tolerable. In re Lakeside Resort JV, 689 S.W.3d 916, 921 (Tex. 2024) (orig. proceeding) (per curiam). We review a default judgment de novo to determine whether it was rendered in compliance with governing statutes and rules. Furst v. Smith, 176 S.W.3d 864, 869 (Tex. App.—Houston [1st Dist.] 2005, no pet.). Default Judgment In their first issue, PLV and Ortiz assert that the trial court erred by signing a default judgment against them because PLV was not properly served with process. They contend that Titan served PLV through the Secretary of State without demonstrating that, prior to doing so, it used reasonable diligence in seeking service on PLV’s registered agent. 3 Under section 5.251 of the Business Organizations Code, the Secretary of State is an agent for the purpose of service of process on an entity only if the entity is a filing entity and “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). Whether service on PLV was proper depends upon whether Titan used reasonable diligence in attempting to find PLV’s registered agent, Anchor Restaurants, at its registered office before resorting to substituted service on the Secretary of State. The Return of Due Diligence Affidavit executed by the private process server on May 5, 2025, describes the attempts made to serve PLV by serving Anchor Restaurants at 6300 Dixie Drive in Houston: 4 PLV and Ortiz raise several arguments challenging the premise that Titan demonstrated reasonable diligence in attempting to serve PLV, claiming (1) the process server’s statements are conclusory, (2) there is no evidence the process server told anyone he was looking for PLV’s registered agent to serve a lawsuit against PLV, (3) the return does not indicate the process server tried to call Ortiz during his final attempt at service, (4) the process server’s efforts to serve PLV were actually efforts to serve Ortiz, (5) the attempts at service were ineffective to show reasonable diligence because two of the four attempts were made during the automatic stay effected by Ortiz’s bankruptcy case, and (6) there is no evidence that 6300 Dixie Drive is the registered office of PLV. We find these arguments unavailing. First, the return of service is prima facie evidence of the facts recited therein. G.F.S. Ventures, Inc. v. Harris, 934 S.W.2d 813, 816 (Tex. App.—Houston [1st Dist.] 1996, no writ). The process server affirmed that he attempted service at the registered agent’s address on four separate dates, at different times of day. His statements are not conclusory because they are supported by facts within his personal knowledge and expertise. See, e.g., Saronikos, Inc. v. City of Dallas, 285 S.W.3d 512, 517 (Tex. App.—Dallas 2009, no pet.). Second and third, even if the process server did not communicate that he was attempting to serve PLV via its agent, Anchor Restaurants, as well as Ortiz individually, and even if he did not attempt to reach Ortiz via telephone a second time, PLV has not cited any legal authority imposing such a requirement. Fourth, the top of the return clearly provides, and PLV and Ortiz have admitted, that the process server was attempting to serve PLV through its registered agent, Anchor Restaurants, at the Dixie Drive address. Fifth, PLV has not established that it is entitled to the protections afforded by the bankruptcy stay. The automatic 5 bankruptcy stay generally does not extend to non-debtors. Reliant Energy Servs., Inc. v. Enron Canada Corp., 349 F.3d 816, 825 (5th Cir. 2003). PLV argues that “where a debtor and non[-]debtor are so bound by statute or contract that the liability of the non[-]debtor is imputed to the debtor by operation of law, then the debtor’s protection must be extended to enjoin litigation against others . . . .” However, PLV has not shown that this is the situation in this case. In their sixth challenge, PLV and Ortiz assert that Titan failed to meet the requirements of section 5.251 because Titan’s amended petition does not allege that 6300 Dixie Drive is the registered office for PLV. See TEX. BUS. ORGS. CODE § 5.251(1)(B) (requiring service on agent to be attempted “at the registered office of the entity”). Titan’s pleading alleges that PLV’s registered agent is Anchor Restaurants, LLC, and states that “PLV’s registered agent cannot, with reasonable diligence, be found at PLV’s registered agent’s address of 6300 Dixie Drive . . . .” It further states that “Anchor Restaurants, LLC may in turn be served through its registered agent, Albert Ortiz, at 6300 Dixie Drive[.]” But the pleading does not reflect that 6300 Dixie Drive is PLV’s “registered office.” In response, Titan requests that, pursuant to Texas Rules of Evidence 201(b)(2) and 201(c)(2), this Court take judicial notice of the official records of the Texas Secretary of State which show that 6300 Dixie Drive is the registered office for both PLV and its registered agent, Anchor Restaurants. 2 Titan maintains the records from the Secretary of State are a source whose accuracy cannot be reasonably questioned. Under Rule 2 The record indicates that 6300 Dixie Drive is also the residence address of Ortiz, the registered agent for Anchor Restaurants. 6 201(b)(2), a court may judicially notice a fact that is not subject to reasonable dispute because it can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned. TEX. R. EVID. 201(b)(2). Such judicial notice is mandatory when a party requests the court do so and the party supplies the court with the necessary information. TEX. R. EVID. 201(c)(2). While “an appellate court is naturally reluctant to take judicial notice of matters . . . when the trial court was not requested to do so,” that does not mean a court “would refuse to take judicial notice . . . where necessary to avoid an unjust judgment.” In re J.L., 163 S.W.3d 79, 84 (Tex. 2005) (citing Sparkman v. Maxwell, 519 S.W.2d 852, 855) (Tex. 1975)). This Court has discretion to take judicial notice of adjudicative facts that are matters of public record and provided to the Court 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)) (taking judicial notice of party’s filings with the Secretary of State provided as appendix to appellate brief); see also Huffman Asset Mgmt., 740 S.W.3d at 484. We choose to exercise that discretion here and confirm that 6300 Dixie Drive is the registered office of PLV and Anchor Restaurants. Accordingly, we conclude the record provides sufficient evidence that the process server’s attempts to serve PLV’s registered agent constituted reasonable diligence. See, e.g., Primestar Constr., Inc. v. Dellew Corp., No. 05-17-01412-CV, 2019 Tex. App. LEXIS 4475, at *5 (Tex. App.—Dallas May 30, 2019, no pet.) (mem. op.) (reasonable diligence established by four attempts to serve registered agent). Titan properly sought and 7 obtained substituted service on PLV through the Secretary of State. We overrule PLV and Ortiz’s first issue. Denial of Motion for New Trial In their second issue, PLV and Ortiz challenge the denial of their motion for new trial. We review the denial of a motion for new trial following a no-answer default judgment under the abuse of discretion standard. Craddock v. Sunshine Bus Lines, Inc., 133 S.W.2d 124, 126 (Tex. 1939). Titan argues that PLV and Ortiz failed to preserve error on this issue by failing to obtain a hearing on the motion for new trial before it was overruled by operation of law. See Century Sports Wears, Inc. v. Wallis Bank, No. 02-20-00201-CV, 2021 Tex. App. LEXIS 3297, at *4 (Tex. App.—Fort Worth Apr. 29, 2021, pet. denied) (mem. op.) (“To complain that the trial court abused its discretion by failing to grant a motion for new trial under the Craddock rule, the movant must obtain a hearing on its motion.”). In response, PLV and Ortiz contend that the trial court had no discretion to deny the motion because it satisfied all three Craddock factors and was uncontroverted. Following the transferor court’s approach in Century Sports, it appears that PLV and Ortiz’s complaint that the trial court abused its discretion was not preserved for our review because they did not present their motion for new trial and thereby give the trial court an opportunity to exercise its discretion. See Century Sports Wears, 2021 Tex. App. LEXIS 3297, at *4 (failing to use diligence to obtain hearing results in waiver of point on appeal since trial court not given opportunity to exercise discretion before motion overruled by operation of law); see also Shamrock Roofing Supply, Inc. v. Mercantile Nat’l 8 Bank, 703 S.W.2d 356, 357–58 (Tex. App.—Dallas 1985, no writ). But even assuming that they did preserve error for appeal, we conclude that PLV and Ortiz failed to satisfy the first element of the Craddock test. PLV and Ortiz claim that the failure to answer was not intentional or the result of conscious indifference but was due to accident or mistake. First, they assert that prior to and during Ortiz’s bankruptcy case, he had discussions with Titan’s counsel about settling Titan’s claims. Ortiz states that, “based on such discussions,” he believed Titan wanted to negotiate rather than litigate its claims. Although settlement negotiations may support a finding of mistake if they are accompanied by evidence that the plaintiff’s statements caused the defendant to believe no default judgment would be taken during ongoing negotiations, PLV and Ortiz have produced no evidence of any such representation by Titan. 3 Cake Craft Factory, LLC v. TForce Freight, Inc., No. 05-24-01466-CV, 2026 Tex. App. LEXIS 5375, at *7 (Tex. App.—Dallas June 10, 2026, no pet.) (mem. op.). Because they have not identified any statement, agreement, or representation by Titan that would support their belief, we conclude that PLV and Ortiz have not satisfied the first Craddock element. Id.; Chloe’s Concepts, LLC v. Clear Rainbow, Inc., No. 05-20-00484-CV, 2021 Tex. App. LEXIS 10021, at *8–9 (Tex. App.—Dallas Dec. 20, 2021, no pet.) (mem. op.). Second, PLV and Ortiz contend that the parties’ contract requires suit to be filed in South Dakota, so they did not believe this lawsuit, which was filed in Tarrant County, was “valid.” Ortiz states, “Had I known . . . that Tarrant County had the ability to grant a judgment in this lawsuit[,] . . . I would have timely filed an answer[.]” Ortiz does not 3 We also note that Ortiz was served with the lawsuit after his bankruptcy case had concluded. 9 indicate that he consulted with counsel or conducted any research to determine whether the lawsuit was “valid.” Not every act of a defendant that could be characterized as a mistake of law is a sufficient excuse under Craddock. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992). We conclude that Ortiz’s assumption fails to meet Craddock’s first prong, requiring proof that the parties’ failure to answer was not intentional or the result of conscious indifference. See id. (defendant’s uncontroverted affidavit that it did not file answer because it did not believe it could be held liable insufficient to negate finding of conscious indifference); Padilla v. Hollerman Dev., L.P., No. 04-08-00739-CV, 2009 Tex. App. LEXIS 2917, 8–10 (Tex. App.—San Antonio Apr. 29, 2009, no pet.) (mem. op.) (no abuse of discretion in denying motion for new trial when defendant purposefully did not file answer based on incorrect assessment that service not proper); Butler v. Dal Tex Mach. & Tool Co., 627 S.W.2d 258, 260 (Tex. App.—Fort Worth 1982, no writ) (party read but did not understand citation, so did nothing). Because PLV and Ortiz failed to meet the first prong of the Craddock test, we need not reach the remaining two prongs. The second issue is overruled. CONCLUSION For the reasons set forth above, the default judgment is affirmed. Judy C. Parker Chief Justice 10