text:
    Corina VELA, Appellant, v. MARYWOOD, Appellee.
    No. 03-98-00663-CV.
    Court of Appeals of Texas, Austin.
    April 27, 2000.

      William H. Alberts, Mcleroy, Alberts & Benjamin, Austin, for appellant.
    Oliver C. Perkins, Austin, for appellee.
    Before Chief Justice ABOUSSIE, Justices B.A. SMITH and YEAKEL.
   LEE YEAKEL, Justice.

This case presents the question of how forthright a licensed child-placing agency must be with an unmarried, expectant mother who seeks its counsel prior to the birth of her child. The child’s mother, Corina Vela, is an exemplary young woman who made a mistake. The district court held that the law compels the compounding of her error, terminated her parental rights, and appointed appellee Mar-ywood managing conservator of her child. Corina appeals the district-court judgment.

FACTUAL BACKGROUND

In September 1997, Corina, then nineteen years of age and unmarried, learned she was pregnant. At the time of the district-court trial, Corina, still living with her parents, had completed two years at Austin Community College where she had earned high grades and was planning to attend Southwest Texas State University. Corina is a member of a strong, stable, and supportive family. Her parents have been married for more than twenty-five years and have lived in the same house for over twenty years. They both hold long-term government jobs and are community leaders who volunteer at recreation centers, in political campaigns, and with senior-citizen groups. Corina herself has volunteered at her church, with Big Brothers/Big Sisters, in the neonatal unit at Brackenridge Hospital, and with her eight-year-old sister’s Brownie troop. Corina has participated in various school activities and dances with a dance company. There is no evidence that Corina has abused drugs or alcohol or is in any way irresponsible. In fact, all evidence is to the contrary. A state senator and a well-known community activist both testified to the outstanding character of Corina and her family. A neighbor who had lived next to the Velas for over twenty-one years said that Corina is the envy of all the mothers in the neighborhood.

In February 1998, this pregnant young woman sought counseling services from Marywood, a licensed child-placing agency. See 40 Tex. Admin. Code §§ 720.24-.67 (1999). Corina had seen a Marywood advertisement and requested information; Marywood mailed her an “admission assessment form” that inquired about her and her family, why she sought services from Marywood, and her views about adoption. Corina completed and returned the form. She met with a Marywood counselor, Aundra Moore, several times in early March. During these meetings, Corina informed Moore that she wanted to place her child for adoption. In Moore’s view, Corina was adamant that her child have a future, be in a two-parent family, be safe, and have the security of a family. Moore observed that Corina wanted “the best for her child” and felt that adoption “was the place to go with that.” Corina indicated to Moore that her parents could help but she didn’t want to burden them. Moore told Corina that “the adoption process is very much at [Corina’s] discretion” and that Corina’s “wishes and requests” as to what type of family she would place her child with and what type of relationship she would have with her child after adoption would be “considered.” At a meeting on March 16, Corina reported to Moore that she had bonded with her unborn child, and Moore noted that Corina “may be grasping the difficulty of her decision.”

On March 25, Corina and Moore discussed what Marywood terms an “open adoption,” a process by which the birth mother expresses her criteria for adoptive parents. Corina requested a Mexiean-Ameriean, Catholic couple who had no other children. She also told Moore that “she wanted to visit with the child after the adoption.” Moore informed Corina that “her relationship with the adoptive family would establish what type of ongoing relationship [with her child] she would have.”

Moore first showed Corina an “Affidavit of Voluntary Relinquishment of Parental Rights” (the “relinquishment affidavit”) on March 30. See Tex. Fam.Code Ann. § 161.103 (West Supp.2000). Moore did not discuss the relinquishment affidavit with Corina and did not explain the meaning of the term “irrevocable”; rather, Moore simply “showed her the form” but did not give her a copy to take with her to study. At the March 30 meeting, Corina signed only an “Affidavit of Status” concerning the identity of the father.

Corina selected an adoptive couple at her next counseling session with Moore and had a face-to-face meeting with them on April 8. The meeting lasted about an hour. The prospective adoptive parents met all of Corina’s criteria and indicated their willingness to comply with post-adoption visits. Throughout Corina’s counseling sessions, she and Moore discussed a “sharing plan,” a standard practice of Mar-ywood. A sharing plan ostensibly allows the birth mother to select the adoptive family, visit her child on a regular basis after the adoption, and exchange letters and pictures. The adoptive parents are aware of the plan prior to placement and agree in writing with Marywood to conform to this arrangement. Significantly, the Mrth mother does not sign this agreement; thus, neither Marywood nor the adoptive parents enter into any agreement with the birth, mother. Marywood admits that aside from advocating that the adoptive parents abide by the plan, Marywood can do nothing if the adoptive parents decide, post-adoption, to disregard it. In fact, the executive director of,Marywood admits that the sharing plan is an “empty promise.” Clearly, the birth mother has no power to enforce such an agreement. Marywood never discussed the unenforce-ability of the sharing plan with Corina.

At Corina’s last meeting with Moore before her child’s birth, they discussed the procedures at the hospital and the various documents Corina would have to sign at the hospital, including a temporary foster-care request. Moore also discussed the relinquishment affidavit with. Corina. Moore read the affidavit to Corina and “talk[ed] about each paragraph, what each paragraph means, what it is saying.” Moore also asked Corina if she had any questions. Although Moore did not first explain the word “irrevocable,” she asked Corina if she knew what it meant. Corina replied that once the relinquishment is signed, it cannot be undone. Moore confirmed that meaning and also told Corina that once she signed the affidavit, she could not “take it back, undo it, or change it.”

Corina gave birth to a son on April 24. Moore met with Corina at the hospital on April 26, and Corina signed a temporary foster-care request. Moore told Corina that she “would always be able to visit her baby” and that her baby would always know that Corina was his mother. Corina cried throughout the one-and-one-half-hour visit. Moore scheduled a subsequent meeting with Corina to complete the adoption process. The child was placed in foster care on April 27.

On April 28, Corina and her parents visited Marywood. Before the meeting, Corina was not aware that she was to sign the relinquishment affidavit then and was undecided as to whether she wanted to sign it. During the two-hour meeting, Corina, her parents, and Moore read and discussed the relinquishment affidavit in detail. Eventually, Corina signed the affidavit. During the meeting, and before Corina signed the relinquishment affidavit, Moore told Corina that she would “always be that child’s birth mother and that with her sharing plan that she had with the adoptive family that she would have an opportunity to be in that child’s life forever”; that she would “always have a relationship with [the adoptive] family and with [her] child”; that requests she made of the adoptive family would be “respected]”; that the baby would have “two mothers,” “both of whom would have input into his life”; that Corina “would be able to see her son grow up”; and that the birth family would be like the child’s extended family. Corina specifically asked what the agency could do to guarantee that she would have continual, post-adoptive visits with the child. Moore responded by “assuring] her that ... the adoptive family has an adoption worker working with them and that they would encourage them to respect what she wished for in terms ... of sharing and visits. And during their ... face-to-face visit and even after that, they said that they would respect her wishes in ... having that sharing plan.” Moore repeated to Corina that she would always be a part of the baby’s life. According to Corina and her mother, these promises are what convinced Corina to sign the relinquishment affidavit; the promises were “the only reason she signed.”

Before the April 28 meeting, Corina did not have a copy of the relinquishment affidavit and did not review it with her parents. Corina was crying when she signed the affidavit, but Moore testified that “it’s very common to have tears.” Moore asked Corina if signing the relinquishment affidavit “was what she wanted to do” and informed Corina that once she signed it, she “couldn’t undo or take it back.” Moore never told Corina that signing the relinquishment affidavit meant that she would “never have any legal rights to see [her] child.” According to Corina, Moore told her that she would only be “giving up [her] guardianship of [the child].” Corina understood this to mean that she would not be the one “taking care of him and raising him.” Corina was not aware and no one informed her that she could have signed a second foster-care agreement to allow herself more time to make the final decision. Moore was the only person who explained the relinquishment affidavit to Corina, and she never told Corina that she could seek legal counsel or another person’s opinion. Marywood never revealed to Corina that the relinquishment affidavit could nullify the sharing plan that she believed would allow her a continuing role in her child’s life. It is significant that the relinquishment affidavit was never mentioned to Corina until after she and Mary-wood had devised a sharing plan satisfactory to her. From that point forward, all of Corina’s actions and decisions were founded on her belief in and reliance on the sharing plan.

The following day, April 29, Corina asked to visit her child. The same day Marywood filed a petition to terminate Corina’s parental rights. On May 1, Corina was allowed to visit her son for one hour at Marywood. Later that day, Corina called Marywood. Exactly what was said in that phone call is disputed. Moore claims that although Corina was crying, in emotional pain, and “having a hard time,” Corina never indicated that she wanted to terminate the adoption process. Corina claims that she told Moore that she “wanted [her] bhby back” and that she “changed [her] mind.” She asked if there was anything she could do, including hiring an attorney. Moore responded that there was nothing that could be done. ■ Corina’s mother also called on the afternoon of May 1 and according to Moore, asked if they “could undo the papers” because her daughter was in so much pain. Moore told Corina’s mother that the relinquishment was “irrevocable and that it is signed and that there is no way to undo the document.” Moore.stated that there was nothing “in her conversation with Corina’s mother on May 1st that would [have led her] to believe that Corina wanted the baby back” and that the conversation was “about documents.” Yet Moore testified at trial that had Marywood known before the child was placed with the adoptive parents that Corina wanted to keep him, Marywood would have returned the child to Corina.

On May 12, an associate judge recommended termination of Corina’s parental rights. See Tex. FanxCode Ann. § 201.005(a) (West Supp.2000); Travis (Tex.) Civ. Dist. Ct. Loe. R. 6.2(j). Although Corina had that day retained counsel to contest the termination and adoption, the termination occurred before she could intervene. In spite of the earlier conversations between Marywood, Corina, and Corina’s mother, Marywood placed Corina’s child with the prospective adoptive parents the day after the associate judge’s decision. Corina immediately gave notice that she was appealing the associate judge’s termination recommendation to the district court. See Tex. FanxCode Ann. § 201.015 (West Supp.2000); Travis (Tex.) Civ. Dist. Ct. Loe. R. 6.10. Even in the face of this clear and immediate assertion that Corina did not want to give up her child, Marywood continued its efforts to terminate Corina’s parental rights.

On June 8, the district court conducted a de novo trial. See Tex. FanxCode Ann. § 201.015; Travis (Tex.) Civ. Dist. Ct. Loc. R. 6.10. The court heard testimony about Corina’s stable family situation and unquestioned character. The guardian ad litem appointed for the child recommended that termination would not be in the best interest of the child and testified that Corina would be a competent parent and the child would be well cared for. Although initially concerned about Corina’s commitment to raising her child, after meeting with Corina the guardian concluded that Corina “impressed [him] as someone who had clearly thought about these things” and wanted to be a mother. Other evidence showed Corina’s ability to care for the child: the Velas were building an additional room on their home, had purchased a crib and other necessities, and had arranged health insurance for the child. Corina planned to continue with her schooling while living with her parents. They would all contribute to the child’s care, and on days when the family could not provide care, Corina planned to enroll him in the same licensed day-care facility that her younger sister had attended. After hearing this testimony, the district court terminated Corina’s parental rights and appointed Marywood managing conservator.

Corina brings this appeal, arguing that (1) there was not clear and convincing evidence that she knowingly and voluntarily executed the relinquishment affidavit, and in fact the evidence shows that she did not execute it voluntarily; and (2) there was not clear and convincing evidence that termination of Corina’s parental rights was in the best interest of the child. Mary-wood also appeals, asserting that the district court erred in requiring it to prove by clear and convincing evidence that Corina knowingly and voluntarily executed the relinquishment affidavit.

DISCUSSION

The district court filed findings of facts and conclusions of law. We attach to findings of fact the same weight, force, and dignity that we attach to a jury’s verdict upon jury questions. See Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.1994); Lawyers Sur. Corp. v. Larson, 869 S.W.2d 649, 653 (Tex.App.—Austin 1994, writ denied). Findings of fact are reviewable for legal and factual sufficiency of the evidence by the same standards used to review jury findings. See Westech Eng’g, Inc. v. Clearwater Constructors, Inc., 885 S.W.2d 190, 195 (Tex.App.—Austin 1992, no writ). The appellate court is not bound by the district court’s legal conclusions, but conclusions of law will be upheld on appeal if the judgment can be sustained on any legal theory supported by the evidence. See id. at 196. Incorrect conclusions will not require a reversal if the controlling findings of fact will support a correct legal theory. See id. Moreover, conclusions of law may not be reversed unless they are erroneous as a matter of law. See id.

I. Burden of Proof at Trial

Marywood maintains that the findings of fact and conclusions of law reflect that the district court misplaced the burden of proof by stating that Marywood proved by clear and convincing evidence that Corina voluntarily executed the relinquishment affidavit. Marywood states that it is not complaining of the district court’s judgment but believes it is necessary to raise this issue to ensure the proper standard of appellate review.

Marywood argues that, as the proponent of the affidavit, it should be required to show by clear and convincing evidence only that the affidavit was executed according to the terms of section 161.103 of the Family Code. See Tex. Fam.Code Ann. § 161.103 (West Supp.2000). The burden would then shift to Corina to demonstrate by a preponderance of evidence that the affidavit was the result of fraud, misrepresentation, overreaching, or the like. Corina argues that Marywood must also establish by clear and convincing evidence that the affidavit was voluntarily executed. We agree with Marywood.

Once the proponent of the affidavit has established by clear and convincing evidence that the affidavit was executed according to the terms of section 161.103 of the Family Code, “the affidavit may be set aside only upon proof, by a preponderance of the evidence, that the affidavit was executed as a result of coercion, duress, fraud, deception, undue influence or overreaching.” In re Bruno, 974 S.W.2d 401, 405 (Tex.App.—San Antonio 1998, no pet.) (citing Coleman v. Smallwood, 800 S.W.2d 353, 356 (Tex.App.—El Paso 1990, no writ)); see Terrell v. Chambers, 630 S.W.2d 800, 802 (Tex.App.—Tyler 1982) (“burden of proof of facts tending to show fraud, misrepresentation, overreaching, or the like, is upon the party seeking to revoke the affidavit”), writ refd n.r.e. per curiam, 639 S.W.2d 451 (Tex.1982).

We will place the burden as did the Bruno, Coleman, and Terrell courts. We do so because the supreme court has indicated that the burden to show involuntariness is on the party opposing the affidavit. See Brown v. McLennan County Children’s Protective Servs., 627 S.W.2d 390, 394 (Tex.1982) (in writ of error appeal, mother had burden “to show that the irrevocable affidavit was obtained by fraud, misrepresentation or overreaching” in order to show necessity of reporter’s record); Catholic Chanties of the Diocese of Galveston, Inc. v. Harper, 161 Tex. 21, 337 S.W.2d 111, 115 (1960) (parent’s consent to place child for adoption “subject to revocation only by proof of fraud, misrepresentation, overreaching and the like”).

We hold that Marywood was required to prove by clear and convincing evidence that Corina “executed before or after the suit [was] filed an unrevoked or irrevocable affidavit of relinquishment of parental rights as provided in [section 161.103 of the Family Code].” Tex. Fam. Code Ann. § 161.001 (West Supp.2000). To set aside the affidavit, Corina had the burden to prove by a preponderance of the evidence that the relinquishment affidavit was executed as a result of some nature of wrongdoing, such as coercion, duress, misrepresentation, fraud, deception, undue influence, or overreaching. See Harper, 337 S.W.2d at 115; Bruno, 974 S.W.2d at 405; We sustain Marywood’s issue.

II. Termination of Parental Rights

The Family Code provides that the court may order termination of the parent-child relationship if the court finds by clear and convincing evidence: (1) that the parent has: ... (K) executed before or after the suit is filed an unre-voked or irrevocable affidavit of relinquishment of parental rights as provided in this chapter; ... and (2) that termination is in the best interest of the child.

Tex. Fam.Code Ann. § 161.001 (emphasis added). “This provision requires proof of both elements; the proof of the first does not excuse proof of the second.” Byrne v. Catholic Charities, Diocese of San Angelo, Inc., 710 S.W.2d 780, 782 (Tex.App.—Austin 1986, no -writ) (construing similar statute and citing Holley v. Adams, 544 S.W.2d 867, 370 (Tex.1976); Wiley v. Spratlan, 543 S.W.2d 349, 351 (Tex.1976); Terrell, 630 S.W.2d at 803).

The natural right existing between parents and their children is one of constitutional dimension. See Holick v. Smith, 685 S.W.2d 18, 20 (Tex.1985); In re G.M., 596 S.W.2d 846, 846 (Tex.1980). Involuntary termination of parental rights involves fundamental constitutional rights. See Holick, 685 S.W.2d at 18; G.M., 596 S.W.2d at 846. This natural parental right has been characterized as “essential,” “a basic civil right,” and “far more precious than property rights.” Stanley v. Illinois, 405 U.S. 645, 651, 92 S.Ct. 1208, 31 L.Ed.2d 551 (1976); see Holick, 685 S.W.2d at 18. A termination decree is complete, final, irrevocable and divests for all time that natural right as well as all legal rights (except for the child’s right to inherit). See Holick, 685 S.W.2d at 18. Termination proceedings must be strictly scrutinized, and termination statutes are strictly construed in favor of the parent. See id. This oft-chanted mantra emphasizes that we must exercise the utmost care in reviewing the termination of parental rights to be certain that the child’s interests are best served and that the parent’s rights are acknowledged and protected.

A. Whether the Relinquishment Affidavit was Executed Voluntarily

It is undisputed that Marywood proved by clear and convincing evidence that the relinquishment affidavit was executed in conformity with section 161.001 of the Family Code. However, in her first issue, Corina argues that “no rational trier of fact could find ... that the Affidavit of Relinquishment was executed voluntarily and knowingly, rather than as the result of misrepresentation, fraud, overreaching, and coercion.” The Family Code implicitly recognizes that an affidavit of relinquishment must be executed voluntarily. See Tex. Fam.Code Ann. § 161.103; Neal v. Texas Dep’t of Human Servs., 814 S.W.2d 216, 218 (Tex.App.—San Antonio 1991, writ denied). Since an affidavit of relinquishment waives rights of constitutional magnitude, see G.M., 596 S.W.2d at 846-47, it must be made voluntarily, knowingly, intelligently, and with full awareness of the legal consequences. “[A]n involuntarily executed affidavit is a complete defense to a termination suit or decree based solely upon a finding under section [161.001(1)(K) ] of the Family Code.” Neal, 814 S.W.2d at 219.

1. Standard of Review

We have held that Corina must carry the burden of proving that she did not voluntarily execute the relinquishment affidavit. See supra pp. 11-14. Thus, Corina attacks the legal sufficiency of an adverse finding to an issue on which she had the burden of proof. To carry her burden, she must demonstrate on appeal “that the evidence conclusively established all vital facts in support of the issue.” Smith v. Central Freight Lines, Inc., 774 S.W.2d 411, 412 (Tex.App.—Houston [14th Dist.] 1989, writ denied); see also W. Wendell Hall, Standards of Review in Texas, 29 St. Mary’s L.J. 351, 481-82 (1998). “A party attempting to overcome an adverse fact finding must surmount two hurdles. First, the record must be examined for evidence that supports the ... finding, while ignoring all evidence to the contrary. Second, if there is no evidence to support the fact finder’s answer, then, the entire record must be examined to see if the contrary proposition is established as a matter of law.” Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex.1989); see Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 940 (Tex.1991) (quoting Sterner, 767 S.W.2d at 690); see also Hall, supra, at 482.

2. Marywood’s Duty to Corina

Corina argues that Marywood affirmatively misrepresented to her facts that induced her to sign the relinquishment affidavit. Specifically, Corina claims that the only reason she signed the relinquishment affidavit was that Marywood led her to believe that she had the right and would continue to play a significant role in her child’s life after the adoption, would continue to have contact with her child, and was only giving up guardianship of her child. At the time they were made, these representations were either false or misleading because Marywood knew that Corina would have no legal right to enforce the sharing plan against the adoptive parents. And, because Marywood was in a close relationship with Corina as her counselor, it had a duty to fully disclose that the open-adoption arrangement had no legal effect. Corina also emphasizes that she was never given a copy of the relinquishment affidavit to bring home with her; Marywood never suggested she seek legal advice; and Moore was the only person who ever explained the relinquishment affidavit to her. Thus, Corina insists that she did not voluntarily and knowingly execute the relinquishment affidavit and that she signed only as the result of coercion, misrepresentation, fraud, and overreaching.

In general, coercion is “[c]ompulsion by physical force or threat,” or “the improper use of economic power.” Black’s Law Dictionary 106 (7th ed.1999). Misrepresentation is a falsehood or untruth with the intent and purpose to deceive. See Great S. Life Ins. Co. v. Doyle, 136 Tex. 377, 151 S.W.2d 197, 201 (1941). In the context of fraud, courts have stated that misrepresentation is making a false statement of fact or a false expression of opinion by one claiming or implying special knowledge. See, e.g., Trenholm v. Ratcliff, 646 S.W.2d 927, 930 (Tex.1983). Silence can constitute a misrepresentation: “When the particular circumstances impose on a person a duty to speak and he deliberately remains silent, his silence is equivalent to a false representation.” Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 435 (Tex.1986); see also Fisher Controls Int’l, Inc. v. Gibbons, 911 S.W.2d 135, 140 (Tex.App.—Houston [1st Dist.] 1995, writ denied).

Fraud “is an elusive and shadowy term which has been defined in some cases as any cunning or artifice used to cheat or deceive another.” Santanna Natural Gas Corp. v. Hamon Operating Co., 954 S.W.2d 885, 890 (Tex.App.—Austin 1997, pet. denied); see First State Bank v. Fatheree, 847 S.W.2d 391, 395-96 (Tex.App.—Amarillo 1993, writ denied). Fraud may consist of both active misrepresentation and passive silence. See American Tobacco Co. v. Grinnell, 951 S.W.2d 420, 435-37 (Tex.1997); Santanna Natural Gas, 954 S.W.2d at 890. At common law, the word “fraud” refers to an act, omission, or concealment in breach of a legal duty, trust, or confidence justly imposed, when the breach causes injury to another or the taking of an undue and unconscientious advantage. See Russell v. Industrial Transp. Co., 113 Tex. 441, 258 S.W. 462, 462 (1924); Chien v. Chen, 759 S.W.2d 484, 494 (Tex.App.—Austin 1988, no writ). The “legal duty” may arise from several sources. See Chien, 759 S.W.2d at 494 n. 6; For example, this “legal duty” may exist if it is established that one has placed special confidence in another where the latter is bound, in equity and good conscience, to act in good faith and with due regard for the interests of the other; it can arise when special confidence is placed in someone thereby giving that person a position of superiority and influence. See Thigpen v. Locke, 363 S.W.2d 247, 253 (Tex.1962); Schiller v. Elick, 150 Tex. 363, 240 S.W.2d 997, 1000 (1951); Chien, 759 S.W.2d at 494 n. 6. In general, once a party undertakes to speak, that party assumes a duty to tell the whole truth. See Santanna Natural Gas, 954 S.W.2d at 891 (citing International Sec. Life Ins. Co. v. Finck, 475 S.W.2d 363, 370 (Tex.Civ.App.—Amarillo 1971), rev’d in part on other grounds, 496 S.W.2d 544 (Tex.1973)). Common-law fraud includes both “actual” and “constructive fraud.” See Chien, 759 S.W.2d at 494-95. Actual fraud includes intentional breaches of duty that are designed to injure another or to obtain an undue and unconscientious advantage, and constructive fraud encompasses those breaches that the law condemns as “fraudulent” merely because they tend to deceive others, violate confidences, or cause injury to public interest, regardless of the actor’s intentions. See Archer v. Griffith, 390 S.W.2d 735, 740 (Tex.1964); Chien, 759 S.W.2d at 494-95. A false representation of a past or present material fact, when one has a duty to speak the truth, is a frequent ground for recovery in fraud when another relies on the representation to her detriment, even in an ordinary arms-length transaction where only the ethics of the marketplace apply. See Chien, 759 S.W.2d at 495 (citing Jeffcoat v. Phillips, 534 S.W.2d 168 (Tex.Civ.App.—Houston [14th Dist.] 1976, writ refd n.r.e.)).

Overreaching is “tricking, outwitting, or cheating a person into doing an act which he would not otherwise have done.” B.A.L. v. Edna Gladney Home, 677 S.W.2d 826, 831 (Tex.App.—Fort Worth 1984, writ refd n.r.e.). Overreaching is generally synonymous with fraud. See Browning v. Nesting, 219 S.W.2d 712, 718 (Tex.Civ.App.—San Antonio 1949, writ refd n.r.e.).

Marywood, by its own admission, is more than an adoption agency. It provides extensive parental-counseling services and advertises these services to the public. Moore testified that she is given the discretion to counsel “openly, objectively, and honestly.” Corina, in seeking counseling from Marywood, was reasonably entitled to rely fully and unconditionally on Marywood’s representations. We hold that Marywood owed Corina a duty of complete disclosure when discussing adoption procedures, including any proposed post-adoption plan. Complete disclosure encompassed the obligation to tell Corina the entire truth about the ramifications of the sharing plan she had chosen with Mar-ywood’s help and to make her fully aware that it lacked legally binding effect. Mar-ywood’s duty springs from two sources. First, when Marywood made a partial disclosure to Corina about the post-adoption plan, it assumed the duty to tell the whole truth. See Santanna Natural Gas, 954 S.W.2d at 891. Second, the evidence conclusively establishes that Corina placed special confidence in Moore, who by virtue of the counseling relationship occupied a position of superiority and influence on behalf of Marywood; thus, Moore and Marywood became bound, in equity and good conscience, to act in good faith and with due regard to Corina’s interests. See Chien, 759 S.W.2d at 494 n. 6. This Court has recognized that a “higher obligation is owed to certain groups because of their vulnerabilities.” Porter v. Nemir, 900 S.W.2d 376, 386 (Tex.App.—Austin 1995, no writ). A young unmarried mother considering placement of her child for adoption is clearly vulnerable and is owed that “higher obligation” when she confides in a maternity counselor.

3. Whether There Is Any Evidence that Corina Voluntarily Signed the Relinquishment Affidavit

To determine whether Corina has met her burden of conclusively proving that she did not sign the relinquishment affidavit voluntarily, we must first ascertain if the record contains any evidence to support the district court’s finding to the contrary. See Sterner, 767 S.W.2d at 690. Marywood argues ‘that it discharged any duty it owed Corina and that there is ample evidence that Corina fully understood the relinquishment affidavit and wanted to proceed with the adoption. Marywood points out that Moore read and explained the relinquishment affidavit to Corina on three separate occasions; that Corina and her mother both testified that Coima fully understood the relinquishment affidavit when she signed it; that the relinquishment affidavit itself says it was voluntary; and that after Marywood discussed with Corina her option to parent, Corina still wanted to place the child for adoption.

Although the face of the affidavit reflects it was signed knowingly and voluntarily, we must consider the surrounding circumstances to determine if Corina’s signature on the document was procured by misrepresentation, fraud, or the like. See, e.g., Bruno, 974 S.W.2d at 406-06; Coleman, 800 S.W.2d at 356-57; B.A.L., 677 S.W.2d at 829-81 (all looking to surrounding circumstances to determine if relinquishment affidavit was signed knowingly and voluntarily). Corina neither signed nor understood the relinquishment affidavit in a vacuum. She signed and understood it in the context of and in reliance on the post-adoption plan that she and Mary-wood created, a plan that Marywood now admits is an “empty promise.” The evidence conclusively establishes that Corina wanted to proceed with the adoption only if she could have post-adoption visits with her child; there is no evidence to the contrary.

Marywood submits that the record shows that Corina understood the post-adoption plan and that if anyone breached the plan, it was Corina. Marywood states that it “did not make any guarantees about the [post-adoption] plan.” Instead, Marywood merely told Corina that her wishes for post-adoption visits would be “respected” and that Marywood would “ ‘encourage’ the adoptive parents to follow through with the planned relationship with [Corina]”

There is no evidence in the record, however, that Corina was ever told that the post-adoption plan could not be legally enforced. Marywood’s words to Corina were at worst deceptive and at best vague. According to Moore, Corina asked her during the April 28 signing of the relinquishment affidavit what Marywood could do to guarantee continual, post-adoptive visits with her child. Moore responded by “as-sur[ing] her that ... the adoptive family has an adoption worker working with them and that they would encourage them to respect what she wished for in terms of ... sharing and visits. And during their ... face-to-face visit and even after that, they said that they would respect her wishes in ... having that sharing plan.” Marywood was obligated to answer Corina’s question directly and tell her that the agency could not guarantee post-adoption visits. Instead, in counseling Corina, Moore carefully selected her words and minced her explanation of the sharing plan with the result that Corina understood one thing while Moore meant another. Whether the incomplete disclosure was deliberate or inadvertent, it does not satisfy the duty of full disclosure that Marywood owed Corina.

Marywood also points to the testimony of Corina herself:

Q: [to Corina]: So when you left [the agency after you signed the relinquishment affidavit], was there ... anything that you told the agency that would have led them to believe that there was anything wrong with the adoption process?
A: No, sir, not when I left.
Q: Okay. And there was no doubt in your mind that you signed an irrevocable document?
A: No, sir.
Q: And are you — you are not telling this Court that you were coerced into signing it?
A: No, sir.
Q: Or defrauded into signing it?
A: No, sir.
Q: Or threatened in any manner?
A: No, sir.

Marywood takes this testimony out of context. Corina was not threatened, coerced, or defrauded into physically signing the relinquishment affidavit. At the time she signed the affidavit, Corina did not know that the post-adoption plan was unenforceable and thus had no reason to believe that she would not have access to her child. Corina’s testimony cannot be considered evidence that the affidavit was signed knowingly and voluntarily because she was testifying about her state of mind before she knew that the post-adoption plan was unenforceable.

Finally, Marywood urges that there is no evidence in the record that indicates Marywood had any kind of incentive to push Corina toward adoption. Mary-wood’s motivation is not relevant to the issue of whether Corina signed the relinquishment affidavit knowingly and voluntarily.

We hold that there is no evidence of probative value that supports the district court’s finding that Corina voluntarily executed the relinquishment affidavit. Corina has surmounted the first Sterner hurdle. See Sterner, 767 S.W.2d at 690.

4. Whether Corina Established as a Matter of Law that the Relinquishment Affidavit was Wrongfully Procured

We turn our attention now to Sterner’s second hurdle: Has Corina established as a matter of law that the relinquishment affidavit was procured by fraud, coercion; overreaching, or misrepresentation? See id.

We find no evidence in the record that Corina was compelled by force or threat to sign the relinquishment affidavit. We overrule Corina’s issue to the extent that it complains that the affidavit was procured by coercion.

However, we find conclusive evidence in the record that the relinquishment affidavit was wrongfully procured. Considering only Marywood’s version of events, we conclude as a matter of law that its statements and omissions to Corina constituted misrepresentation, fraud, or overreaching. Marywood admits that it told Corina that “with her sharing plan ... she would have an opportunity to be in that child’s life forever”; that she would “always have a relationship with [the adoptive] family and with [her] child”; that requests she made of the adoptive family would be “respected]”; that the baby would have “two mothers,” “both of whom would have input into his life”; and that Corina “would be able to see her son grow up.” Marywood never told Corina that she would not have any legal right to see her child after she signed the relinquishment affidavit, and even when Corina directly asked if Mary-wood could guarantee post-adoption visits, Marywood failed to give her a complete answer. Marywood’s statements are misleading and stop short of complete disclosure. They are half-truths that would lead a reasonable person in Corina’s circumstance to believe that she had a continuing right to see her child according to the terras of the sharing plan. Corina advised Moore on March 25 of her desire to have a post-adoptive role in her child’s life. The relinquishment affidavit was not mentioned before March 30. From March 25 forward, and throughout all discussions of the relinquishment affidavit, Corina was justified in relying on the sharing plan in deciding to place her child for adoption. It is undisputed that Corina sought counseling from Marywood to aid her in the difficult decision of whether to keep her child. She was a young woman faced with a life-changing situation. She found comfort in and placed reliance on Marywood’s counseling. We need not and do not determine whether Marywood deliberately misled Co-rma. At a minimum, Marywood’s advice and counsel was incomplete. We hold that Corina conclusively established that the relinquishment affidavit was procured by misrepresentation, fraud, or overreaching and therefore was not voluntarily signed. We sustain Corina’s first issue and hold that the relinquishment affidavit is void as a matter of law.

B. Best Interest of the Child

Because we have determined that the relinquishment affidavit is void, it is not necessary to decide Corina’s second issue, whether there was clear and convincing evidence that termination of her parental rights was in the best interest of the child. See Tex. Fam.Code Ann. § 161.001 (requiring relinquishment affidavit and finding that it is in child’s best interest to terminate before court can terminate parental rights). We note, however, that without the affidavit, there is scant evidence in the record as to the child’s best interest. See Terrell, 680 S.W.2d at 802-03.

In arguing that there is additional evidence that termination would be in the child’s best interest, Marywood directs us to statements made by Corina and her mother well in advance of the birth of the child as to Corina’s motivation in seeking Marywood’s counseling and pursuing the adoption process. Moore testified that at the time of trial, it would be in the child’s best interest to remain with the prospective adoptive parents. However, she also testified that prior to actual placement, it would have been in the child’s best interest to be returned to Corina. Marywood asserts that while Corina can provide a home where she, her parents, and a babysitter would jointly care for the child, the adoptive parents can provide a two-parent family with the father staying home and acting as full-time caregiver. Marywood’s program director testified that it would be in the child’s best interest to remain with the prospective adoptive parents since the child has been adjusting to that home. The guardian ad litem, however, concluded that it was not in the child’s best interest to terminate Corina’s parental rights, that Corina is competent, and that Corina would properly care for the child. Moore herself testified that she knows of no reason why Corina “could not properly take care of the physical and emotional needs” of the baby. We are mindful that the effect of this decision may now work a hardship not only on the child but also upon the prospective adoptive parents. We observe, however, that although Mary-wood knew soon after Corina signed the affidavit that she had reconsidered her decision, Marywood nevertheless proceeded with termination and placement; we further note that at the time of trial the child had been with the prospective adoptive parents for less than a month.

There is no evidence that Corina is an unfit mother or is financially or emotionally unable to care for the needs of her son.

CONCLUSION

In conclusion, we hold that once a child-placing agency undertakes to counsel an expectant mother with regard to her alternatives upon the birth of her child, the agency must provide her with complete information regarding those alternatives. It may not leave the mother to speculate on the consequences of the action upon which she and the agency have agreed. In this particular case, our decision is made difficult because the child is now two years of age and has spent almost his entire life with the prospective adoptive parents. However, any fault lies , with the pace of the legal system and not with the mother.

Because we hold that the evidence conclusively establishes that Corina did not voluntarily sign the relinquishment affidavit, we reverse the district court’s judgment and render judgment in favor of Corina that her parental rights are not terminated.

      . The alleged and probable father executed an affidavit of waiver of interest. See Tex. Fam. Code Ann. § 161.106 (West 1996 & Supp.2000). The district court’s judgment also terminated any rights he may have had with regard to the child, and he is not a party to this appeal.

      .Moore describes herself as "a maternity counselor ... responsible for working with birth parents and their families ... in finding options for an unplanned pregnancy.”

      . Unless otherwise indicated, all quotations in the factual background are taken from Moore's testimony at trial.

      . In pertinent part, the relinquishment affidavit reads:
      It is in the best interest of my child that the child be placed for adoption in a suitable home by an agency licensed by the Texas Department of Protective and Regulatory Services to place children for adoption. I therefore designate MARYWOOD, 510 West 26th Street, Austin, Texas, 78705 as managing conservator of the child. I have been informed of my parental rights, powers, duties and privileges. I freely, voluntarily, and permanently give and relinquish to the agency all my parental rights, privileges, powers and duties. I consent to the placement of the child for adoption by this agency.
      I fully understand that a lawsuit will be promptly filed in the 126th District Court of Travis County, Texas, to terminate, forever the parent-child relationship between me and my child. Termination of the parent-child relationship between me and my child is in the best interest of the child. I understand that by executing this affidavit, I make this termination possible. With this in mind, I hereby declare that this affidavit of relinquishment of parental rights is and shall be final, permanent, and irrevocable. I FULLY UNDERSTAND THAT IF I CHANGE MY MIND AT ANY TIME, I CAN NEVER FORCE THE AGENCY TO DESTROY, REVOKE, OR RETURN THIS AFFIDAVIT AND THAT I CANNOT TAKE BACK OR UNDO THIS AFFIDAVIT IN ANY WAY.
      It is in the best interest of my child that this be my last parental act and deed. Not wishing to appear or be cited in the termination suit, I hereby waive the right to issuance, service and return of all process in any suit to terminate the parent-child relationship between me and the child. I agree to termination of the parent-child relationship between the child and me without further notice to me. I FULLY UNDERSTAND THAT I WILL NOT BE INFORMED FURTHER ABOUT THIS SUIT.

      . If a child has no presumed father, a mother wishing to place her child for adoption must sign an "Affidavit of Status of Child” identifying the alleged father or stating that the alleged father is unknown. See Tex. Fam.Code Ann. § 161.105 (West Supp.2000). The legislature slightly modified section 161.105 in 1999, after this case arose. See Act of June 18, 1999, 76th Leg., R.S., ch. 556, § 40, 1999 Tex. Gen. Laws 3058, 3069. The modification does not affect our determination of this case, and we cite the current code for convenience.

      . The child was placed with foster parents at that time, not the prospective adoptive parents.

      . Corina argues that in explaining these legal documents Marywood engaged in the unauthorized practice of law. We do not address this issue because it is unnecessary to this appeal. See Tex.R.App. P. 47.1.

      . The legislature modified section 201.005 in 1999, after this case arose. See Act of June 18, 1999, 76th Leg., R.S., ch. 1302, § 4, 1999 Tex. Gen. Laws 4448, 4449. The modification does not affect our determination of this case, and we cite the current code for convenience.

      . The legislature modified section 201.015 in 1999, after this case arose. See Act of June 18, 1999, 76th Leg., R.S., ch. 1302, § 10, 1999 Tex. Gen. Laws 4448, 4450. The modification does not affect our determination of this case, and we cite the current code for convenience.

      . Two findings are pertinent to this appeal:
      6. Corina ... voluntarily executed [the relinquishment affidavit] in accordance with the provisions of the Texas [Fjamily Code.

      8. Termination of the parent-child relationship between Corina ... and the child is in the best interest of the child.
      The district court concluded, inter alia, that "[t]he parent-child relationship between Corina ... and the child should be terminated.”

      . In both the district court's "Decree of Termination of Parent-Child Relationship” and "Findings of Fact and Conclusions of Law,” the court states that the findings pertinent to this appeal were established by clear and convincing evidence.

      . Because Marywood does not seek to "alter the trial court’s judgment,” it was not required to file a notice of appeal. See Tex. R.App. P. 25.1(c).

      . Section 161.103 states, "An affidavit for voluntary relinquishment of parental rights must be: (1) signed after the birth of the child ... (2) witnessed by two credible persons; and (3) verified before a person authorized to take oaths.” Tex. Fam.Code Ann. § 161.103 (West Supp.2000). Corina does not argue that the relinquishment affidavit does not comply with section 161.103 other than that the affidavit was not executed voluntarily.

      .- In support of her argument, Corina relies on Neal v. Texas Department of Human Services, 814 S.W.2d 216, 223 (Tex.App.—San Antonio 1991, writ denied) (Chapa, J., concurring). The Neal concurrence would require that the proponent of the affidavit bring forth clear and convincing evidence that the affidavit was in fact executed voluntarily. See Neal, 814 S.W.2d at 223 (Chapa, J., concurring). In a subsequent case, the Fourth Court of Appeals, without comment on the Neal concurrence, has failed to follow Justice Cha-pa’s approach. See In re Bruno, 974 S.W.2d 401, 405 (Tex.App.—San Antonio 1998, no pet.). Corina also directs us to B.A.L. v. Edna Gladney Home, 677 S.W.2d 826 (Tex.App.— Fort Worth 1984, writ ref'd n.r.e.), and Methodist Mission Home v. N.A.B., 451 S.W.2d 539 (Tex.Civ.App.—San Antonio 1970, no writ). These cases, however, do not support the proposition that the proponent of a relinquishment affidavit must prove by clear and convincing evidence that the execution of the affidavit was voluntary.

      . The legislature modified section 161.001 in 1999, after this case arose. See Act of June 18, 1999, 76th Leg., R.S., ch. 1087, § 1, 1999 Tex. Gen. Laws 3947. The modification does not affect our determination of this case, and we cite the current code for convenience.

      . Moore's testimony indicates that Moore read and explained the relinquishment affidavit to Corina on two occasions — the day Corina signed the affidavit and during the meeting immediately preceding her child's birth. The third time we assume Marywood is referring to was the March 30 meeting when Moore testified that she did not discuss the affidavit with Corina but merely "showed her the form.”

      . See supra note 4.

      . Marywood states that "a second visit [between Corina and her son] was scheduled and [Corina] did not show up.” The record indicates that the second visit was in fact a meeting during which Marywood would physically hand over the child to the adoptive parents. Corina was invited but had already decided at that point to contest the adoption. She testified that she did not go to the meeting because it would simply have been too difficult for her. In any event, breach is irrelevant since Corina was not a party and had no legal basis to enforce the agreement between Mary-wood and the prospective adoptive parents.

      . Corina asserts that the appellate court applies “a higher standard of review” when examining a trial-court record for clear and convincing evidence to support the findings of the trier of fact. Because we have held that it was Corina’s burden to prove by a preponderance of the evidence that the relinquishment affidavit was not executed voluntarily, see supra pp. 11-14, we express no opinion on this assertion. Further, in considering Corina’s issues in the light of that burden, we have presumed that she has brought forward attacks on both the legal and factual sufficiency of the evidence to support the district court’s findings. Because we have held that the evidence is legally insufficient to support those findings, we do not address factual insufficiency. See Tex.R.App. P. 47.1.

      . See Tex.R.App. P. 43.2(c).


source: Caselaw Access Project

author: KIDD, Justice.

license: Public Domain

text:
    John SUTPHIN, Jr., Appellant, v. TOM ARNOLD DRILLING CONTRACTOR, INC., Appellee.
    No. 03-99-00600-CV.
    Court of Appeals of Texas, Austin.
    May 4, 2000.

      Lin Hughes, McGinnis, Lochridge & Kil-gore, L.L.P., Austin, appellant.
    Henry J. Novak, Austin, appellee.
    Before Chief Justice ABOUSSIE, Justices KIDD and B.A. SMITH.
   KIDD, Justice.

Appellant John Sutphin, Jr. (“Sutphin”), the respondent below, seeks relief from the final judgment of the Williamson County Court at Law No. 1. In response to a motion by appellee Tom Arnold Drilling Contractor, Inc. (“Arnold”) the Williamson County court issued an order instructing Sutphin to appear and show cause why he should not be held in contempt of court (“show cause order”). Sutphin made a special appearance through counsel, challenging the Williamson County court’s jurisdiction on two grounds. First, Sutphin argued that because the Williamson County court’s plenary jurisdiction in the underlying cause had expired, the court lacked jurisdiction to consider a contempt citation against him. Second, Sutphin maintained that the Williamson County court lacked personal jurisdiction over him because he was a resident of Colorado. The Williamson County court issued a final judgment denying Sutphin’s special appearance. Sutphin appeals. We will affirm.

Background

In July 1997, Arnold, a Texas corporation domiciled in Round Rock, filed suit against Semco, Inc. (“Semco”), a non-resident Colorado corporation, in Williamson County Court at Law No. 1. Arnold alleged fraud, breach of contract, and Deceptive Trade Practices Act violations in Semco’s sale of a water well utility truck to Arnold. Semco filed a special appearance sworn to by Sutphin, who is the president and sole shareholder of the company. Subsequently, Semco filed four affidavits, each executed by Sutphin, in support of the special appearance. Each recited that Sutphin had personal knowledge of the facts recited in the sworn affidavit. The pleadings and affidavits represented to the Williamson County court that Semco (1) did not engage in business in Texas; (2) had never engaged in business in Texas; (3) had never previously conducted sales in Texas; (4) had not committed any act in Texas; and (5) had not solicited business in Texas. In August 1998, the Williamson County court granted Semco’s special appearance and dismissed Arnold’s cause with prejudice. No subsequent motions were filed, and no appeal was taken from this underlying dismissal.

In December 1998, Arnold filed a federal diversity action in U.S. District Court in Denver under the Colorado deceptive trade .practices statute. In the course of pre-trial discovery, Arnold gained access to the contents of a motor vehicle dealer complaint file maintained by the Colorado Department of Revenue. Documentation in the file indicated that Semco had engaged in systematic and continuous business dealings in Texas from 1996 through 1998. This documentation directly contradicted the representations Sutphin made under oath in Semco’s special appearance pleadings and affidavits in Texas.

In June 1999, more than ten months after its Texas suit against Semco had been dismissed, Arnold filed a motion for an order to show cause why Sutphin should not be held in contempt of court (“Arnold’s motion”) in the Williamson County court. Arnold’s motion was supported by the business records of several Texas businesses and alleged that the affidavits Sutphin made in support of Semco’s special appearance were false and perjurious. Arnold requested that the Williamson County court order Sutphin to appear individually for contempt proceedings against him.

The Williamson County court signed the show cause order directing Sutphin to appear before the court in Georgetown, Texas. Sutphin responded by filing a special appearance supported by affidavits, maintaining that (1) the Williamson County court’s plenary jurisdiction in the underlying cause had expired and that as a result, the court lacked jurisdiction to consider a contempt citation against him; and (2) because Sutphin was a resident of Colorado, the Williamson County court lacked personal jurisdiction over him. On September 17, 1999, the court signed the final judgment overruling Sutphin’s special appearance. Sutphin filed a notice of appeal, which stayed further proceedings against him pending the outcome of this appeal. At Arnold’s request, the Williamson County court made findings of fact and conclusions of law.

For the limited purpose of determining whether it had jurisdiction to investigate allegations of fraud and perjury, the Williamson County court considered the allegations in Arnold’s motion as well as the business records filed with the motion. In its findings, the court stated that it had been influenced by the content of Sutphin’s affidavits in granting Semco’s special appearance. The court found that Sutphin signed and swore to the truth of the facts contained in the affidavits in his individual capacity and based on his personal knowledge. The court concluded that fifing a false, sworn statement for the purpose of influencing a decision of the court constitutes a fraud upon the court. Finally, the Williamson County court determined that a foreign resident who swears under oath to the truth of pleadings and affidavits which the affiant knows, or has reason to know, will be filed and considered by a Texas court is answerable to that court if the pleadings or affidavits are thereafter shown to be false.

Discussion

A. The Show Cause Order

When the Williamson County court issued the show cause order, its plenary jurisdiction in Arnold’s underlying suit against Semco had long since expired. The question remains whether the Williamson County court possessed the inherent power to investigate an alleged fraud on the court that, if proven, caused the court to relinquish rightful jurisdiction over Semco in the underlying suit.

1. Plenary Power

Sutphin argues that the Williamson County court lacked the authority to issue the show cause order compelling him to appear because it lacked jurisdiction to enter any orders in Arnold’s suit against Semco. In support of this argument, Sut-phin relies on rule 329b(d) of the Texas Rules of Civil Procedure and ,a fine of cases that stand for the proposition that once a trial court’s plenary jurisdiction over a cause of action has expired, it lacks the power to enter any further orders in the cause. See Tex R. Civ. P. 329b(d); Ex parte Olivares, 662 S.W.2d 594, 595 (Tex.1983); State ex rel Latty v. Owens, 907 S.W.2d 484, 486 (Tex.1995); First Alief Bank v. White, 682 S.W.2d 251, 252 (Tex.1984). More specifically, Sutphin cites authority implying that once a trial court’s plenary jurisdiction expires, the trial court even lacks the jurisdiction to impose sanctions for a party’s pre-judgment conduct. See In re Bennett, 960 S.W.2d 35, 38 (Tex.1997); cert. denied sub nom. In re Hilliard, 525 U.S. 823, 119 S.Ct. 66, 142 L.Ed.2d 52 (1998). Sutphin urges that the fact that the allegations concern allegedly false affidavits, rather than discovery abuse, is of no consequence. Sutphin claims that if we were to hold otherwise, parties could circumvent the finality of any judgment, even after appeal, by merely alleging that the prevailing party had given false and misleading testimony prior to judgment.

Sutphin argues that rule 329b of the Texas Rules of Civil Procedure limits Texas trial courts to thirty days to take any action in a cause, or against parties and counsel, other than to set aside a void judgment. Rule 329b states in pertinent part:

The following rules shall be applicable to motions for new trial and motions to modify, correct, or reform judgments (other than motions to correct the record under Rule 316) in all district and county courts:
(d) The trial court, regardless of whether an appeal has been perfected, has plenary power to grant a new trial or to vacate, modify, correct, or reform the judgment within thirty days after the judgment is signed.

Tex.R. Civ. P. 329b(d).

In deciding whether this rule precludes the Williamson County court’s exercise of jurisdiction in this cause, we first consider what Sutphin cites as his strongest authorities in support of his argument, In re Bennett and Ex parte Olivares. In Bennett, the Texas Supreme Court considered whether a party’s filing of nonsuit or the subsequent removal to federal court deprived a state trial court of jurisdiction to consider, sua sponte, whether sanctions should be imposed on attorneys for their pre-removal conduct. See Bennett, 960 S.W.2d at 36. After plaintiffs filed a non-suit and defendants removed the cause to federal court, Judge Max Bennett ordered sanctions against plaintiffs’ attorneys, who knowingly and intentionally violated local rales providing for random assignment of cases to the eight district courts in Nueces County. Judge Bennett sought and was granted mandamus relief by the Texas Supreme Court after the court of appeals directed him to sign the order of nonsuit and vacate the order for sanctions. Sut-phin relies on the supreme court’s statement that “[i]t is only after plenary jurisdiction has expired that a trial court may not sanction counsel for pre-judgment conduct.” Id. at 38. Sutphin argues that the supreme court’s mandate is clear: as a jurisdictional prerequisite, the trial court must possess plenary jurisdiction, or it lacks authority to take any action whatsoever against parties or counsel. Initially, this argument seems persuasive. The supreme court has certainly implied that the power to sanction pre-judgment conduct depends on whether plenary power has expired. See Scott & White Mem’l Hosp. v. Schexnider, 940 S.W.2d 594, 596 n. 2 (Tex.1996). However, Sutphin overlooks the holding of Bennett, which is “that neither the filing of a nonsuit nor the subsequent removal of a case to federal court deprived the state court of jurisdiction to consider, sua sponte, whether sanctions should be imposed on attorneys for pre-removal conduct when the sanctions are unrelated to the merits of the removed case.” Bennett, 960 S.W.2d at 36. We find it significant that although the case had been removed to federal court, which deprived Judge Bennett of jurisdiction entirely, the supreme court held that Judge Bennett retained the power to sanction the attorneys involved in the scheme to select a specific Nueces County district court.

Sutphin also relies on Olivare s, in which the issue was whether the trial court had jurisdiction to render a judgment thirteen months after it had dismissed the cause. The Texas Supreme Court found that dismissal of the cause had fixed the rights of the parties and could only be set aside by a written order rendered during the period of plenary jurisdiction. See Olivares, 662 S.W.2d at 595 (citing Tex.R. Civ! P. 329b). The subsequent judgment for the plaintiff and contempt order against the defendant were nullities See id.

Sutphin correctly asserts that under rule 329b(d) and the authorities cited, the Williamson County court lacked jurisdiction to enter orders regarding the merits of Arnold’s underlying suit against Semco. Any attempt by the Williamson County court to reverse the dismissal, try the cause, or render judgment would appear to be juris-dictionally barred by the cases upon which Sutphin relies. Sutphin reasons, therefore, that the expiration of plenary power over the merits of the underlying suit also bars the Williamson County court’s exercise of jurisdiction over Sutphin regarding a possible contempt citation. Sutphin contends that because his statements were made in the context of the underlying suit, over which the Williamson County court no longer has jurisdiction, his affidavits are immune from examination by the Williamson County court.

2. Inherent Power

In response, appellee Arnold concedes that the Williamson County court lacked jurisdiction to enter any orders regarding the merits of the underlying suit against Semco after its plenary power had expired. However, Arnold contends that the expiration of plenary jurisdiction has no bearing on the court’s authority to investigate an alleged fraud perpetrated on the court itself. Arnold maintains that the court’s inherent -power is the source of its authority to issue the show cause order compelling Sutphin to appear, rather than its plenary jurisdiction to modify its judgment in the underlying cause.

Arnold relies on section 21.001 of the Texas Government Code and cases defining and applying inherent power. See Tex. Gov’t Code Ann. § 21.001(a), (b) (West Supp.2000); Eichelberger v. Eichelberger, 582 S.W.2d 395, 398 (Tex.1979); In re E.I. DuPont de Nemours & Co.—Benlate Litigation, 99 F.3d 363, 367-68 (11th Cir.1996). More specifically, Arnold cites authority stating that courts possess the inherent power to punish for contempt. See Ex parte Pryor, 800 S.W.2d 511, 512 (Tex.1990); Ex parte Gorena, 595 S.W.2d 841, 843 (Tex.1979). Finally, Arnold maintains that the alleged perjury is such a threat to the dignity, independence, and integrity of the court that it warrants the exercise of inherent power for the limited purpose of investigating the allegation. Arnold argues that there is no danger of circumventing the finality of the judgment in the underlying suit because that judgment is not challenged in this proceeding.

The Texas Legislature has recognized and codified a court’s inherent power in section 21.001 of the Texas Government Code. The statute states in pertinent part:

(a) A court has all powers necessary for the exercise of its jurisdiction and the enforcement of its lawful orders, including authority to issue the writs and orders necessary or proper in aid of its jurisdiction.
(b) A court shall require that proceedings be conducted with dignity and in an orderly and expeditious manner and control the proceedings so that justice is done.

Tex. Gov’t Code Ann. § 21.001(a), (b). The Williamson County court specifically cited this section in its conclusions of law as authority to conduct an independent investigation into Arnold’s allegations.

In Eichelberger, the Texas Supreme Court explained inherent judicial powers and stated:

The inherent judicial power of a court is not derived from legislative grant or specific constitutional provision, but from the very fact that the court has been created and charged by the constitution with certain duties and responsibilities. The inherent powers of a court are those which it may call upon to aid in the exercise of its jurisdiction, in the administration of justice, and in the preservation of its independence and integrity. ... This power exists to enable our courts to effectively perform their judicial functions and to protect their dignity, independence and integrity.

Eichelberger, 582 S.W.2d at 398-99 (internal citations omitted). Arnold argues that to perform its duty ¡to protect and safeguard the public and to preserve its own “dignity, independence and integrity,” the Williamson County court must possess the inherent power to investigate an alleged fraud that caused the court to ■ relinquish its jurisdiction. See id. at 399.

Although federal case law is not binding precedent on this Court in this case, Arnold cites as persuasive authority In re E.I. DuPont de Nemours & Co.—Benlate Litigation, 99 F.3d at 363. DuPont involved a toxic tort action in which Georgia plaintiffs settled with the defendants and voluntarily dismissed their claims with prejudice. More than a year and a half later,' the plaintiffs petitioned the United States District Court in Georgia seeking sanctions against DuPont for its failure to produce certain documents in violation of discovery orders. The district court conducted a show cause hearing and issued a sanctions order, which DuPont appealed. The Eleventh Circuit addressed the question whether the district court lacked jurisdiction to conduct an independent hearing for sanctions based on alleged misconduct in the long-dismissed Georgia toxic tort litigation. The court stated that every district court has the power to investigate whether it has been the victim of fraud and to impose a contempt sanction, even after the action in which the contempt arose has been dismissed. See id. at 367-68 (citing Chambers v. NASCO, Inc., 501 U.S. 32, 44, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991)). The Eleventh Circuit concluded that in 1995 the district court still possessed jurisdiction to investigate whether DuPont violated discovery orders in the 1993 litigation.

Arnold argues that the. Texas Legislature has granted state courts “all powers necessary for the exercise of [their] jurisdiction ... including authority to issue the ... orders necessary or proper in aid of [their] jurisdiction” and that this grant includes the inherent power to investigate allegations that fraud deprived the court of jurisdiction. Tex. Gov’t Code Ann. § 21.001(a) (emphasis added). Arnold asserts that this is a case calling for the exercise of inherent power because it implicates a direct threat to the integrity of the court. Arnold argues that the special appearance is a unique proceeding in which the veracity of affidavits is of paramount importance and that therefore the Williamson County court must possess the authority to investigate allegations of fraud.

Analysis

The question before us is a narrow one: Whether the Williamson County court has the authority to investigate the truthfulness of the pleadings and affidavits that it relied upon in deciding to grant a special appearance. There are no Texas cases that speak directly to this question.

We begin by noting that Sutphin’s cases relying on rule 329b(d) of the Texas Rules of Civil Procedure are distinguishable. In each, the trial court had disposed of the original cause, fixing the rights and duties of the parties. See Ex parte Olivares, 662 S.W.2d at 595; First Alief Bank, 682 S.W.2d at 252; State ex rel. Latty, 907 S.W.2d at 485. The court later revisited the same case on the merits and attempted to reverse its earlier action by issuing a new judgment that altered the rights and duties of the parties. In each case, the appellate court cited rule 329b for the proposition that “the trial court ... has plenary power to grant a new trial or to vacate, modify, correct, or reform the judgment within thirty days after the judgment is signed.” Tex.R. Civ. P. 329b(d) (emphasis added).

In this case, the Williamson County court issued an order that granted Semco’s special appearance and dismissed the underlying cause. That order became final, and the Williamson County court’s plenary jurisdiction expired on September 7, 1998. Arnold has pursued its underlying claims against Semco in U.S. District Court in Denver. The federal district court, not the Williamson County court, will determine the rights and duties of the parties on the merits of Arnold’s case against Semco. The Williamson County court has made no attempt to “vacate, modify, correct, or reform” its order of dismissal. See id. The show cause order does not change the effect of the initial dismissal or the rights and duties of Semco vis-a-vis Arnold in any way. Therefore, Sutphin’s cases are not dispositive.

On the other hand, we are persuaded by Arnold’s contention that the Williamson County court possesses the inherent power to investigate the veracity of affidavits that formed the basis for granting Semco’s special appearance and request for dismissal of the underlying cause. The special appearance is a unique proceeding in our courts. In a special appearance proceeding, a defendant asserts that it is not subject to personal jurisdiction in Texas and often appears, physically, in Texas courts through counsel. Asserting the impropriety and inconvenience of defending a suit in Texas, the special appearance movant usually supports its argument through pleadings and sworn affidavits, not live testimony. Witnesses are not usually available for cross-examination, and the court does not observe their demeanor as they take the oath. The court generally grants or denies the special appearance based on documentary evidence and as a consequence must, of necessity, be able to rely on the truthfulness of that evidence.

Here, the Williamson County court expressly found that it relied on Sutphin’s affidavits in granting Semco’s special appearance. Without them, the Williamson County court may have ruled differently. Arnold’s motion and supporting documents suggest that Sutphin’s sworn statements were false. It would be an affront to the “dignity, independence and integrity” of Texas courts if non-resident defendants could escape jurisdiction by presenting false affidavits and if affiants could execute them without fear of reprisal. See generally Eichelberger, 582 S.W.2d at 399. It is imperative that our courts have the power to investigate the veracity of affidavits upon which they rely in determining their jurisdiction and in deciding whether to grant or deny special appearances. The show cause order is the appropriate mechanism for the court to investigate, and for Sutphin to defend, the veracity of his sworn statements — statements that allowed his company to avoid suit in a Texas State court.

We do not decide today whether Sutphin should be held in contempt of court. Nor do we decide the appropriate remedy if he should be found in contempt. Those questions are not before us. We merely hold that the Williamson County court has the inherent power to investigate the veracity of the affidavits Sutphin filed in support of Semco’s special appearance and motion for dismissal.

B. In Personam Jurisdiction

Sutphin argues that even if the Williamson County court possesses the authority to investigate the veracity of his affidavits filed in support of Semco’s special appearance, the court lacks personal jurisdiction over Sutphin individually because he is a resident of Colorado. Sutphin maintains that there is no evidence he has had the minimum contacts required for the Williamson County court to exercise jurisdiction over him' as a non-resident defendant. Furthermore, he contends that the Williamson County court’s investigation will violate traditional notions of fair play and substantial justice. Finally, Sutphin asserts that he executed each of the four affidavits in his capacity as Semeo’s agent. He concludes that his actions as an agent cannot serve as the basis for the Williamson County court’s jurisdiction over him as an individual.

The Texas Supreme Court has decided that the Texas long-arm statute reaches “as far as the federal constitutional requirements of due process will allow.” Guardian Royal Exch. Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991). Therefore, it is necessary to consider only whether it is consistent with federal constitutional requirements of due process for the Williamson County court to exercise in 'personam jurisdiction over Sutphin. See id. These due process requirements are assessed under a two-part test: “(1) whether the nonresident defendant has purposely established minimum contacts with the' forum state; and (2) if so, whether the exercise of jurisdiction comports with fair play and substantial justice.” Id.

1. Minimum Contacts

Under the minimum contacts analysis, we must first determine whether Sutphin has purposely availed himself of the privilege of conducting activities in Texas, thus invoking the benefits and protections of our laws. See id. Sutphin cannot be subjected to jurisdiction based on events that are “random, fortuitous or attenuated ... or the unilateral activity of another party or a third person.” Id. Sut-phin’s acts, whether committed in Texas or Colorado, must give rise to the conclusion that he could reasonably anticipate being haled before a Texas court. See Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex.1990). The minimum contacts analysis encompasses both specific and general jurisdiction. See Guardian Royal, 815 S.W.2d at 227. Because there is no allegation that Sutphin engaged in continuous and systematic contacts with Texas, general jurisdiction is not applicable. The Williamson County court may exercise specific jurisdiction over Sutphin if the allegations “arise out of or relate to” Sutphin’s contacts with Texas. Id. This analysis will focus on the relationship among Sutphin, the State of Texas, and the litigation. See id. at 228. The nature and quality of Sutphin’s actions are more important than the number of contacts with Texas. See Cartlidge v. Hernandez, 9 S.W.3d 341, 347 (Tex.App.—Houston [14th Dist.] 1999, no pet. h.).

Sutphin’s contacts with Texas consisted of signing Semco’s special appearance pleadings and executing four affidavits that he knew, or should have known, would be submitted to the Williamson County court. In its findings of fact, the court specifically found Sutphin signed and swore to the pleadings and affidavits in his individual capacity and based upon his personal knowledge. Furthermore, the court found that recitals in the affidavits that Sutphin was the president of Semco merely fulfilled the requirement that affidavits in support of a special appearance must show the affiant has such personal familiarity with the facts as would permit him to personally testify as a witness. See Tex.R. Civ. P. 120a(3).

Sutphin executed four affidavits containing assertions that were intended to negate the bases of the Williamson County court’s personal jurisdiction over Semco, of which he is the president and sole shareholder. The pleadings and affidavits were purposefully directed at the State of Texas in general and the Williamson County court in particular. Sutphin executed these documents in order to secure for Semco the benefits and protections that Texas law provides to non-resident defendants. Execution of these affidavits was voluntary. Sutphin may have had personal motivations for helping Semco avoid suit in Texas, but his execution of the affidavits was not compelled by the unilateral activity of Arnold or third parties. Sutphin could have chosen not to execute the affidavits, leaving that task to another Semco employee or resolving that Semco would defend suit in Williamson County.

Rule 120a(3) of the Texas Rules of Civil Procedure sets forth the requirements of affidavits filed in support of a special appearance. The requirement that the affidavit “show affirmatively that the affiant is competent to testify” leads us to conclude that Sutphin could reasonably anticipate being called before the Williamson County court to answer for the veracity of his affidavits. Tex.R. Civ. P. 120a(3).

The allegations that Sutphin’s affidavits contain false and perjurious information arise directly from Sutphin’s contacts with Texas. If Sutphin had not executed the affidavits and directed them toward the Williamson County court, there would be no allegations of false testimony. Finally, the nature and quality of those contacts— pleadings and affidavits intended to influence a court in its decision to grant or deny a special appearance — weigh in favor of the Williamson County'court’s exercise of specific jurisdiction. Due to the nature of the proceedings, the affiant’s sworn statements can have a tremendous influence on the court’s decision to grant or deny the special appearance. We hold that Sutphin’s contacts with Texas satisfy the minimum contacts test of due process.

2. Fair Play and Substantial Justice

Once the minimum contacts test is satisfied, the defendant’s actions are further evaluated to determine whether the exercise of personal jurisdiction comports with the notions of “fair play and substantial justice.” Guardian Royal, 815 S.W.2d at 228. The burden is on the defendant to show “a compelling case that the presence of some consideration would render jurisdiction unreasonable.” Id. at 231. The factors to be considered are: “(1) the burden on the defendant; (2) the interests of the forum state in adjudicating the dispute; ... (3) the plaintiffs interest in obtaining convenient and effective relief; (4) the interstate judicial system’s interest in obtaining the most efficient resolution of controversies; and (5) the shared interest of the several States in furthering fundamental substantive social policies.” Id.

Nothing in this record indicates that defending suit in Texas will be unduly burdensome for Sutphin. In and of itself, distance is usually insufficient to defeat personal jurisdiction. See id. In addition, all other factors weigh in favor of the Williamson County court’s assertion of jurisdiction. The State of Texas has the most compelling interest in adjudicating an alleged fraud on a Texas court. Arnold is already engaged in litigation in Colorado, but the District Court in Denver lacks the authority to impose sanctions for pre-removal conduct that occurred in a Texas state court. See In re Bennett, 960 S.W.2d at 40. Therefore, Arnold’s interest in convenient and effective relief is best served if the Williamson County court can investigate the allegations. The Williamson County court, which is familiar with the events in question and aware of the impact Sutphin’s affidavits had on the special appearance proceeding, is the most efficient forum for these proceedings. We find that the Williamson County court’s exercise of in personam jurisdiction over Sutphin comports with the notions of fair play and substantial justice.

Conclusion

Having determined that the Williamson County court possesses the inherent power to investigate the veracity of affidavits which influenced its decision to grant Sem-co’s special appearance, that Sutphin has established minimum contacts with Texas for purposes of this proceeding, and that the assertion of personal jurisdiction comports with notions of fair play and substantial justice, we affirm the final judgment of the Williamson County court.

      . Arnold did not request that the dismissal order in the underlying suit be set aside; its motion was limited strictly to requesting sanctions pursuant to a contempt citation.

      . The plaintiffs’ attorneys filed identical cases in each one of the district courts of Nueces County, one of which was assigned to the trial court of Judge Max Bennett. When one of the cases was finally assigned to the 105 th District Court, the original petition was amended to join 700 plaintiffs. Plaintiffs' counsel then filed notices of nonsuit in the other cases. Judge Bennett refused to sign the order of nonsuit and imposed fines of $10,000 on the two plaintiffs' attorneys, who admitted their tactic was designed to secure a trial in the Nueces County district court of their choosing.

      . Sutphin cites additional cases that rely on rule 329b(d) of the Texas Rules of Civil Procedure. They illustrate the same proposition: Trial court orders vacating or modifying a judgment in the original dispute after the expiration of plenary jurisdiction are void. See State ex rel. Latty v. Owens, 907 S.W.2d 484, 486 (Tex. 1995); First Alief Bank v. White, 682 S.W.2d 251, 252 (Tex.1984).

      . There are several additional Texas cases in which inherent power is described broadly and distinguished from jurisdiction. See Ex parte Pryor, 800 S.W.2d 511, 512 (Tex.1990) (stating inherent power is source of contempt power); Montgomery v. Kennedy, 669 S.W.2d 309, 312 (Tex.1984) (slating extrinsic fraud prevents trial on merits and warrants bill of review relief); Ex parte Gorena, 595 S.W.2d 841, 845 (Tex.1979) (describing inherent power as "essential element of judicial independence and authority”); National Life Co. v. Rice, 140 Tex. 315, 167 S.W.2d 1021, 1024 (1943) (stating that jurisdiction is power to determine merits of suit between parties).

      . Sutphin maintains that federal case law is wholly irrelevant to this discussion because the Federal Rules of Civil Procedure permit a court to investigate fraud upon the court long after rendition of judgment. "This rule does not limit the power of a court to ... set aside a judgment for fraud upon the court.” Fed. R.Civ.P. 60(b). There is no specific Texas counterpart to rule 60(b). However, the federal court did not rely on rule 60(b) in DuPont. See In re E.I. DuPont de Nemours & Co.—Benlate Litigation, 99 F.3d 363, 367-68 (11th Cir.1996). Rather, it relied on the court's inherent power. See also Root Refining Co. v. Universal Oil Prods. Co., 169 F.2d 514, 535 (3d Cir.1948).

      . Arnold cites to several other federal cases in which courts relied on inherent power as the source of authority for their actions. See Chambers v. NASCO, Inc., 501 U.S. 32, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991); Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990); Universal Oil Prods. Co. v. Root Refining Co., 328 U.S. 575, 66 S.Ct. 1176, 90 L.Ed. 1447 (1946); Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 64 S.Ct. 997, 88 L.Ed, 1250 (1944).

      . Olivares was ordered to perform certain acts related to real property and was jailed for contempt when he failed to comply. See Ex parte Olivares, 662 S.W.2d 594, 595 (Tex.1983). First Alief Bank was denied the right to foreclose on its judicial lien. See First Alief Bank, 682 S.W.2d at 252. Latty was no longer entitled to court-ordered child support. See State ex rel. Latty, 907 S.W.2d at 485.

      . Sutphin objects to the documents attached to Arnold’s motion and considered by the Williamson County court when it issued the show cause order and denied Sutphin’s special appearance. These documents were considered for the limited purpose of determining the court's authority to conduct an inquiry into the allegations of perjury.

      . Sutphin objects that the sanctions sought by Arnold are criminal in nature. Should the Williamson County court find Sutphin in contempt and assess sanctions that are excessive, Sutphin has a remedy by appeal. For example, in DuPont, the Eleventh Circuit found the district court had the power to conduct the investigation that resulted in the finding that DuPont violated discovery orders but reversed and remanded "because the district court did not afford DuPont the procedural protections the Constitution requires for the imposition of criminal contempt sanctions.” 99 F.3d at 369.


author: BEA ANN SMITH, Justice.

text:
    INTERACTION, INC./STATE of Texas, Appellants, v. STATE of Texas/INTERACTION, INC., Appellees.
    No. 03-99-00358-CV.
    Court of Appeals of Texas, Austin.
    May 4, 2000.
    Rehearing Overruled June 15, 2000.

      Percy L. Isgitt, Percy L. “Wayne” Is-gitt, P.C., Houston, Attorney for Interaction.
    Jim Hill, Brian MacLeod, Assistant Attorney Generals, Bankruptcy & Collections Division, Austin, Attorneys for the State of Texas.
    Before Chief Justice ABOUSSIE, Justices KIDD and B.A. SMITH.
   BEA ANN SMITH, Justice.

The State of Texas sued Boutros Investments, Inc. No. 7 (Boutros 7) and Interaction, Inc. to recover delinquent taxes owed by Boutros 7. Because both defendants failed to answer, the trial court rendered a default judgment against Boutros 7 and Interaction. Interaction filed a petition for bill of review alleging it had not received notice of the State’s suit. The trial court granted the petition, and after a trial to the court, rendered judgment for the State. On appeal, Interaction raises three points of error: that the evidence is factually and legally insufficient to support the judgment, that there is no basis in law to support a judgment against Interaction for taxes owed by Boutros 7, and that the judgment is not supported by the findings of fact. On cross-appeal, the State asserts that the trial court erred in granting the bill of review and proceeding with a trial on the merits. We will reverse the trial court’s order granting the bill of review and render judgment that the trial court’s default judgment be reinstated.

FACTUAL AND PROCEDURAL BACKGROUND

This dispute involves liability for gasoline and sales taxes that Boutros 7 incurred as operator of Webster Conoco, a convenience store that sells gas, groceries, beer, and other incidentals. An audit of Boutros 7 by the Comptroller for the period between 1989 and 1991 revealed unpaid sales taxes amounting to $7,482.95 and gasoline taxes totaling $213,185.35. The Comptroller conducted a hearing on September 11,1991 and thereafter issued Certificates of Delinquency against Boutros 7.

Pierre Tanios owned Boutros 7, which leased the Webster Conoco premises from Dwayne T. Warner. At some point not clear from the record, Tanios moved to Louisiana, Warner testified that Assad Boulos, vice president of Interaction, called to tell him that Tanios had moved and that Interaction was taking over the Webster Conoco store. Warner recorded a deposit of $1700 from Interaction made on September 14, 1991, representing rental fees collected for the Webster Conoco. Interaction obtained a sales tax permit for the store on September 28, 1991 and made its first taxable sale at this location on October 1.

The State sued Interaction as well as Boutros 7 for the delinquent taxes alleging that Interaction was either a statutory or common-law successor to Boutros 7. The State attempted to serve citation on Interaction’s registered agent, Simon Raef As-saad, at an address in Humble. The officer’s return indicated that the citation was not executed because Simon Assaad had moved to Lebanon. The name and title of Interaction’s vice president, Assad Boulos, and his address in Spring were handwritten on the return. Rather than serving Boulos, the State then substituted service on Interaction through the Secretary of State. The Secretary of State forwarded the citation to Interaction’s registered address. The State obtained a default judgment against Interaction and Boutros 7 for $226,993.38, plus $10,000 in attorney’s fees, plus interest and costs of suit. Nothing in the record indicates that notice of entry of the default judgment was sent to Interaction.

Interaction learned about the lawsuit and the default judgment when the State garnished Interaction’s bank accounts. Thereafter, Interaction filed a petition for a bill of review alleging it had no actual or constructive notice of the lawsuit. The trial judge granted the bill of review based on the parties’ stipulations and arguments of counsel and set the cause for trial. Boutros 7 was not a party to the bill of review or the trial.

The trial court held Interaction liable for the delinquent taxes. In its conclusions of law, the trial court held that Interaction was a continuing enterprise of and a successor to Boutros 7 and that the two corporations operated as a single enterprise. It also held that Interaction was used as. a sham to perpetrate a fraud on the State. On appeal, we will first consider whether the court erred in granting the bill of review. If the State’s cross-appeal is sustained, we need not address the points of error raised by Interaction complaining of the judgment rendered at trial.

DISCUSSION

A bill of review is an independent, equitable action to set aside a judgment that is no longer appealable or subject to a motion for new trial. See Axelrod R & D, Inc. v. Ivy, 839 S.W.2d 126, 128 (Tex.App. — Austin 1992, writ denied). In general, for a party to successfully invoke a bill of review, it must allege and prove that 1) it had a meritorious defense to the cause of action alleged to support the judgment; 2) which it was prevented from making because of fraud, accident, or wrongful act of the opposite party 3) that was untainted by any fault or negligence of its own. See Alexander v. Hagedorn, 148 Tex. 565, 226 S.W.2d 996, 998 (1950). However, when a defendant does not receive notice of a lawsuit, the defendant is relieved of its burden to prove that fraud, accident, or wrongful act prevented it from making its defense. See Texas Indus., Inc. v. Sanchez, 525 S.W.2d 870, 871 (Tex.1975) (per curiam). When there is no notice, defendant’s lack of fault or negligence is established. See Caldwell v. Barnes, 975 S.W.2d 535, 537 (Tex.1998).

In reviewing a bill of review, every presumption is indulged in favor of the court’s ruling, which will not be disturbed unless it is affirmatively shown that there was an abuse of judicial discretion. See Harris v. Elm Oil Co., 183 S.W.2d 216, 218 (Tex.Civ.App. — Texarkana 1944, writ refd w.o.m.). A trial court abuses its discretion when it acts in an unreasonable and.arbitrary manner, or without reference to any guiding rules or principles. See Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985). Because, it is fundamentally important that finality be accorded to judgments, bills of review “ ‘are always watched by courts of equity with extreme jealousy, and the grounds on which interference will be allowed are narrow arid restricted.’ ” Hagedorn, 226 S.W.2d at 998 (quoting Harding v. W.L. Pearson & Co., 48 S.W.2d 964, 965-66 (Tex.Comm’n App.1932, holding approved)).

On cross-appeal, the State complains that Interaction failed to meet its burden of establishing two of the three elements necessary to prevail on a bill of review. Interaction counters that it was excused from proving these two prongs because it did not receive service of process or notice of the default judgment. We first address Interaction’s argument that it did not receive actual or constructive notice of the lawsuit because it was not served with process.

The trial court issued findings of fact and conclusions of law; four, of the five findings of fact and none of the conclusions of law address service of process. The findings of fact state that Interaction’s registered agent was Simon Assaad; that the State’s service of process at the registered address was not executed because Simon Assaad had moved to Lebanon; that the State subsequently served the Secretary of State, which forwarded citation to Interaction’s registered address; and that Interaction learned about the judgment when its bank account was garnished. The parties stipulated that the State served the Secretary of State in accordance with article 2.II of the Texas Business Corporation Act. See Tex. Bus. Corp. Act Ann. art. 2.11 (West 1980 & Supp.2000). Article 2.11 authorizes service of process on the president, all vice presidents, and the registered agent of a corporation. See id. art. 2.11(A). When the registered agent cannot with reasonable diligence be found at the registered office, then the Secretary of State is designated an agent of the corporation upon whom process may be served. See id. art. 2.11(B). Citations of service and the certificate from the Secretary of State in the record are proof that the corporation was served in compliance with article 2.11. See TXXN, Inc. v. D/FW Steel Co., 632 S.W.2d 706, 708 (Tex.App. — Fort Worth 1982, no writ). The stipulation that the State served the Secretary of State defeats Interaction’s argument that it was not served with process; Interaction was served in the manner required by article 2.11 of the Texas Business Corporation Act. See Houston’s Wild West, Inc. v. Salinas, 690 S.W.2d 30, 32 (Tex.App. — Houston [14th Dist.] 1985, writ ref d n.r.e.).

Interaction contends, however, that because article 2.11’s language is permissive — providing that the corporation’s officers or that the Secretary of State may be served — the State should have served Interaction’s Vice President, Assad Boulos, whose name and address were noted on the first return of service. See Tex. Bus. Corp. Act Ann. art, 2.11(A), (B). In a similar case in which the registered agent’s address was marked out and another written in the margin, the court held that knowledge of the alternate address created no presumption that the defendant was amenable to service at that location. See Advertising Displays, Inc. v. Cote, 732 S.W.2d 360, 363 (Tex.App. — Houston [14th Dist.] 1987, no writ) (citing TXXN, 632 S.W.2d at 708). Although hindsight reveals that Interaction was amenable to service at the address written on the envelope, the State was not required to presume that Boulos would be at this address or that he was a proper agent for service. Article 2.11 does not require the State to make any effort beyond a reasonably diligent attempt to serve Interaction’s registered agent before substituting service on the Secretary of State. See Houston’s Wild West, 690 S.W.2d at 32.

Interaction next contends that it was denied due process because it did not receive notice of the hearing on the motion for default judgment. When a defendant has no notice on a motion dispositive of the case, it is entitled to have the default judgment set aside. See LBL Oil Co. v. International Power Servs., 777 S.W.2d 390, 390 (Tex.1989) (per curiam). Due process requires that the plaintiff use a means reasonably calculated to apprise the defendant of the lawsuit. See Peralta v. Heights Medical Ctr., Inc., 485 U.S. 80, 84, 108 S.Ct. 896, 99 L.Ed.2d 75 (1988) (citing Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct6. 652, 94 L.Ed. 865 (1950)). However, the defendant must show that its failure to appear was not the result of its own negligence. See Winrock Houston Assocs. Ltd. v. Bergstrom, 879 S.W.2d 144, 149 (Tex.App. — Houston [14th Dist.] 1994, no writ).

Article 2.09 requires a corporation doing business in Texas to maintain a registered agent. See Tex. Bus. Corp. Act Ann. art. 2 .09 (West 1980). Article 2.10 describes the procedure for changing the corporation’s registered agent. See id. art. 2.10 (West 1980 & Supp.2000). The corporation must file a statement with the Secretary of State setting forth the name of the corporation, the former address, the new address, the names of the previous registered agent and the new registered agent, and a statement that the change was authorized by the Bóard of Directors. See id. art. 2.10A(l)-(7). Indeed, Interaction filed such a statement with the Secretary of State changing its registered agent to Boulos, but not until January 3, 1995— almost fourteen months after service on Interaction was attempted.

Interaction’s own failure to comply with these statutory requirements deprived Interaction of notice of the pending suit. See TXXN, 632 S.W.2d at 709. Therefore, Interaction is precluded from arguing that it was denied due process. Interaction did not attempt to justify its failure to properly maintain a registered agent and has failed to satisfy its burden of proving the elements required to invoke a bill of review. The State’s method of service was reasonably calculated to give Interaction notice and would have provided actual notice if Interaction had informed the Secretary of State that its registered agent had changed. See id. There was no proper basis for granting the bill of review; thus, the trial court abused its discretion, and we sustain the State’s point of error. Because the bill of review was granted erroneously, the default judgment should remain in effect, and we do not consider Interaction’s points of error complaining of the judgment rendered at trial.

CONCLUSION

The State properly served citation , on Interaction by substituting service on the Secretary of State. Therefore, we reverse the trial court’s order granting the bill of review and render judgment that the trial court’s default judgment be reinstated.

      . The State stipulated that Interaction made a prima facie showing of a meritorious defense.