|DEFAULT JUDGMENT REVERSED IN RESTRICTED APPEAL - INDIVIDUAL DEFENDANT WAS NOT
PROPERLY NAMED OR SERVED WITH CITATION
Kao Holdings, LP v. Young, 261 S.W.3d 60, No. 07-0197 (Tex. 2008) (Hecht) (7-page pdf opinion)
(default judgment, restricted appeal, business organization law, partnership law, partner vs. partnership as
defendant, effect of failure to name and serve defendant in individual capacity, individual liability of partner
vs. liability of partnership)
KAO HOLDINGS, L.P., D/B/A SEBRING APARTMENTS AND WILLIAM KAO v. ANNIE LEE YOUNG; from
Harris County; 14th district (14-05-00398-CV, 214 SW3d 504, 11-21-06)
motion to take judicial notice denied
Pursuant to Texas Rule of Appellate Procedure 59.1, after granting the petition for review and without
hearing oral argument, the Court modifies the court of appeals' judgment and affirms that judgment as
Justice Nathan Hecht delivered the opinion of the Court.
Holding: Rule 239 of the Texas Rules of Civil Procedure provides for default
judgment only against “a defendant”. Kao was not a defendant. Tex. R. Civ. P. 301
requires that “[t]he judgment of the court shall conform to the pleadings”. Young
pleaded no claim against Kao. For these additional reasons, default judgment against
Kao was improper. Kao has not argued that rendition of a default judgment against
him would violate due process, and therefore we express no opinion on that subject.
Case in the court of appeals below: Kao Holdings v. Young (Tex.App.- Houston [14th Dist.] Nov. 21,
2006)(Justice Richard Edelman)(default judgment affirmed as to liability, but award of damages reversed
and remanded for retrial, damages were not liquidated) (restricted appeal, default judgment, capacity of
defendant, individual vs. partner in partnership, proof of liquidated vs. unliquidated damages)
AFFIRMED IN PART; REVERSED & REMANDED IN PART: Justice Edelman, Justice Frost
Before Justices Anderson, Edelman and Frost
14-05-00398-CV Kao Holdings, L.P. d/b/a Sebring Apartments and William Kao v. Annie Lee Young
Appeal from 151st District Court of Harris County
Dissenting Opinion by Justice Frost
Kao Holdings, L. P. v. Young, 261 S.W.3d 60 (Tex. 2008)
Justice Hecht delivered the opinion of the Court.
This is a restricted appeal from a $2.5 million default judgment against petitioners Kao Holdings,
L.P., a Texas limited partnership, and its general partner, William Kao. Respondent Annie Young
sued Kao Holdings for damages, alleging that it owned the Sebring Apartments where she was
living when she fell in the laundry room and injured her hip. Young did not sue Kao individually but
served the partnership by serving him. When Kao Holdings did not answer, Young filed a motion
for default judgment stating that “Defendant, William Kao was properly and personally served” and
had not answered. The motion requested “a default judgment granting the relief requested in
Petitioner’s Original Petition.” After a hearing, of which we have no record, the court rendered
The court of appeals affirmed the liability portion of the judgment, holding that judgment against Kao
individually was proper, even though he was not a party, because he was Kao Holdings’ general
partner and the person to whom citation to the partnership was delivered. But the court reversed
the damages award because it was unliquidated and Young had offered no evidence to support it
and remanded the case for further proceedings. Justice Frost dissented, arguing that judgment
against Kao individually was improper. Young did not seek review in this Court.
Kao argues that judgment could not be rendered against him individually when he was neither
named nor served as a party. We have held that “[j]udgment shall not be rendered against one who
was neither named nor served as a party defendant [and did not waive] service by making a
general appearance before the court.” Although that principle is surely founded in fundamental
concepts of due process, we cited as authority Rule 124 of the Texas Rules of Civil Procedure,
which states that “[i]n no case shall judgment be rendered against any defendant unless upon
service, or acceptance or waiver of process, or upon an appearance by the defendant, as
prescribed in these rules, except where otherwise provided by law or these rules.” (Emphasis
added.) Young argues, and the court of appeals agreed, that two statutes “otherwise provided” for
judgment against Kao: section 17.022 of the Texas Civil Practice and Remedies Code, which
states, “[c]itation served on one member of a partnership authorizes a judgment against the
partnership and the partner actually served”; and section 3.05(c) of the Texas Revised Partnership
Act, which states, “[a] judgment against a partnership is not by itself a judgment against a partner,
but a judgment may be entered against a partner who has been served with process in a suit
against the partnership”. Neither of these provisions allows for rendition of judgment against a
partner who has not been sued.
The court of appeals construed section 17.022 to apply to an action against a partnership, so that,
restated, it provides: In a suit against a partnership, citation served on the partnership by delivery to
one of its members authorizes judgment against both the partnership and that member. But section
17.022 dates to 1858, decades before a partnership was recognized as an entity that could be
sued. The purpose of the statute was not to allow judgment against a partner served in a suit
against a partnership, but to allow judgment against partnership property in a suit against a partner.
In effect, the statute provides: In a suit against a partner, citation served on that partner authorizes
judgment against the partnership as well. This is consistent with the law, then and now, that a
partnership is liable for acts of a partner done with authority or in the ordinary course of the
partnership’s business. Thus, section 17.022 does not support a judgment against Kao
The purpose of article 6132b-3.05(c) is not as clear. It was enacted in 1993 as part of the Texas
Revised Partnership Act. There was no similar provision in TRPA’s predecessor, the Texas
Uniform Partnership Act adopted in 1961, or in the Uniform Partnership Act of 1914, on which
TUPA was modeled. TRPA was the product of a committee of the State Bar of Texas, drawing on
the work of a committee of the American Bar Association and the National Conference of
Commissioners on Uniform State Laws, which had resulted in a draft in 1992 that became the
Uniform Partnership Act of 1997. The 1997 UPA contained the following provision:
A judgment against a partnership is not by itself a judgment against a partner. A judgment against a
partnership may not be satisfied from a partner’s assets unless there is also a judgment against the
A comment to the provision explains:
Subsection (c) provides that a judgment against the partnership is not, standing alone, a judgment
against the partners, and it cannot be satisfied from a partner’s personal assets unless there is a
judgment against the partner. Thus, a partner must be individually named and served, either in the
action against the partnership or in a later suit, before his personal assets may be subject to levy for
a claim against the partnership.
The first sentence of section 307(c) is identical to the first clause of article 6132b-3.05(c), but the
second sentence and second clause are completely different. The only explanation for the latter in
TRPA’s legislative history is a comment appended to the provision that merely tracks its language:
Subsection (c) provides that a judgment against the partnership is not, standing alone, a judgment
against any of the partners, but that a judgment may be entered against any partner who has been
served in the same suit.
The second clause of article 6132b-3.05(c) may have been intended to incorporate section 17.022,
in which case the meaning of the second clause would be the same as section 17.022. But we have
no way of knowing whether that was the intent. Viewing article 6132b-3.05(c) in isolation, its
purpose appears to be to make clear that while partners are generally liable for the partnership’s
obligations, a judgment against the partnership is not automatically a judgment against the
partner, and that judgment cannot be rendered against a partner who has not been served merely
because judgment has been rendered against the partnership. The purpose of the provision is to
state that service is necessary, not that it is sufficient. Partners against whom judgment is sought
should be both named and served so that they are on notice of their potential liability and will have
an opportunity to contest their personal liability for the asserted partnership obligation. Article
6132b-3.05(c) does not support a judgment against Kao individually.
The court of appeals relied on Fincher v. B & D Air Conditioning & Heating Co., a 1991 court of
appeals decision, but Fincher is distinguishable on its facts. The named defendants in that case
were a partnership and one of its general partners, William R. Fincher, trustee. The other
partner, also William R. Fincher, but in his individual capacity, was not named as a party. The
partnership was served by delivering the citation to Fincher, and he was served as trustee.
Fincher answered only as trustee, not individually, and at trial he made clear that he was appearing
only as trustee. But toward the end of the trial, the plaintiff argued that it had become clear that
Fincher’s liability was no different, whether as an individual or as trustee. After the trial
concluded, the plaintiff moved for a trial amendment naming Fincher individually as a defendant.
Fincher objected, asserting prejudice, but he made no actual showing of prejudice. The trial
court granted the motion and rendered judgment against the partnership, Fincher as trustee, and
Fincher individually. The court of appeals affirmed, holding that the trial court did not abuse its
discretion by allowing the trial amendment because all the partners were by statute liable for the
partnership obligation. The court also held that because Fincher had been served, section
17.022 permitted judgment to be rendered against him.
For reasons already explained, we do not agree with the Fincher court’s construction of section
17.002, nor do we agree that judgment could be rendered against Fincher merely because he was
liable as a partner for partnership obligations. But certainly the court’s conclusion that the trial
amendment should have been allowed was correct, given no showing of prejudice by Fincher, who
participated fully in the trial and whose liability individually was shown to be coextensive with his
liability as trustee.
Rule 239 of the Texas Rules of Civil Procedure provides for default judgment only against “a
defendant”. Kao was not a defendant. Rule 301 requires that “[t]he judgment of the court shall
conform to the pleadings”. Young pleaded no claim against Kao. For these additional reasons,
default judgment against Kao was improper. Kao has not argued that rendition of a default
judgment against him would violate due process, and therefore we express no opinion on that
Kao Holdings argues that default judgment against it was improper because Young’s motion
mentioned only Kao as a defendant. But the motion asked for judgment for the relief sought in the
petition, and that relief was against Kao Holdings. Moreover, Young’s motion did not preclude her
from orally requesting judgment against Kao Holdings at the hearing.
Because the default judgment against Kao must be reversed, we grant the petition for review and
without hearing oral argument, modify the court of appeals’ judgment accordingly. The judgment,
as modified, is affirmed, and the case is remanded to the trial court for further proceedings.
Nathan L. Hecht
Opinion delivered: June 13, 2008
 Tex. R. App. P. 30.
 See Tex. Civ. Prac. & Rem. Code § 17.022.
 214 S.W.3d 504, 509 (Tex. App.–Houston [14th Dist.] 2006).
 Id. at 507, 510.
 Id. at 510 (Frost, J. dissenting).
 Werner v. Colwell, 909 S.W.2d 866, 869-870 (Tex. 1995).
 Tex. Rev. Civ. Stat. Ann. art. 6132b-3.05(c) (Vernon Supp. 2007). A parallel provision was adopted in
Tex. Bus. Orgs. Code § 152.306(a). Act of May 26, 2003, 78th Leg., R.S., ch. 182, § 1, 2003 Tex. Gen.
Laws 267, 517 (effective Sept. 1, 2005). The court of appeals believed that art. 6132b-3.05(c) applies to
limited partnerships as well as general partnerships, 214 S.W.3d at 508 n.6, and, for purposes of this case,
we assume that it does.
 The provision was first enacted in 1858 and recodified in 1879, 1911, 1925, and 1985. See Act approved
Feb. 5, 1858, 7th Leg., R.S., ch. 92, § 2, 1858 Tex. Gen. Laws 110 (“Where suit is instituted against a
partnership, service or process upon one of the partners shall be sufficient notice to all the members of the
firm, except that the judgment rendered in case of such service, shall only be enforced against the
partnership property, and the separate property of the partner who may have been served.”); Tex. Rev. Civ.
Stat. art. 1224 (1879) (“In suits against partners the citation may be served upon one of the firm, and such
service shall be sufficient to authorize a judgment against the firm and against the partner actually served.”);
Tex. Rev. Civ. Stat. art. 1863 (1911) (“In suits against partners, the citation may be served upon one of the
firm; and such service shall be sufficient to authorize a judgment against the firm and against the partner
actually served.”); Tex. Rev. Civ. Stat. art. 2033 (1925) (“Citation served upon one member of a partnership
or firm shall be sufficient to authorize a judgment against the firm and the partner actually served.”); Act of
May 17, 1985, 69th Leg., R.S., ch. 959, § 1, 1985 Tex. Gen. Laws 3242, 3261 (enacting current Tex. Civ.
Prac. & Rem. Code § 17.022).
 Although the 1858 statute referred to “suit . . . instituted against a partnership”, we stated in Frank v.
It is a general rule that suits in courts can only be maintained by and against persons natural or artificial;
that is, individuals or corporations. Unless otherwise provided by statute, a copartnership is not considered a
person, and must sue and be sued by its members. . . . . The rule that a copartnership must sue or be sued
by its members is so universally recognized that there is no need for discussion.
25 S.W. 409, 409-410 (Tex. 1894) (citations omitted). The 1858 enactment obviously intended to reference
suits to recover against a partnership, which, as the later codifications made clear, were really “suits against
partners”. Tex. Rev. Civ. Stat. art. 1224 (1879). In M Sys. Stores, Inc. v. Johnston, 76 S.W.2d 503, 504 (Tex.
1934), we reiterated that “a partnership is not a legal entity, like a corporation”. Much later, in Haney v.
Fenley, Bate, Deaton & Porter, 618 S.W.2d 541, 542 (Tex. 1981), we observed that “after the adoption of
the Texas Uniform Partnership Act, Tex. Rev. Civ. Stat. Ann. art. 6132b, effective January 1, 1962, a
partnership was recognized as an entity legally distinct from its partners for most purposes.” See also Tex.
R. Civ. P. 28 (“Any partnership . . . may sue or be sued in its partnership, assumed or common name for the
purpose of enforcing for or against it a substantive right . . . .”).
 See Tex. Rev. Civ. Stat. Ann. art. 6132b-3.03(a) (Vernon Supp. 2007). We express no view on whether
the partnership must also be sued as a separate entity.
 Act of May 31, 1993, 73rd Leg., R.S., ch. 917, § 1, 1993 Tex. Gen. Laws 3887, 3893.
 Act of May 9, 1961, 57th Leg., R.S., ch. 158, 1961 Tex. Gen. Laws 289, expired January 1, 1999, Act of
May 31, 1993, 73rd Leg., R.S., ch. 917, 1993 Tex. Gen. Laws 3887.
 See UPA Revision Subcomm. of the Comm. on P’ships and Unin. Bus. Orgs., Should the Uniform
Partnership Be Revised?, 43 Bus. Law. 121 (1987).
 Tex. Rev. Civ. Stat. Ann. art. 6132b cmt. (Vernon Supp. 2007) (Comment of the Bar Committee 1993).
 Unif. P’ship Act § 307(c) (1997).
 Id. § 307(c) cmt.
 Tex. Rev. Civ. Stat. Ann. art. 6132b-3.05 cmt. (Vernon Supp. 2007).
 See id. art. 6132b-3.04.
 816 S.W.2d 509 (Tex. App.–Houston [1st Dist.] 1991, writ denied).
 Id. at 511.
 Id. at 511-512.
 Id. at 512.
 Id. at 513.
 Id. at 512.
 Tex. R. Civ. P. 239 (“Upon such call of the docket, or at any time after a defendant is required to
answer, the plaintiff may in term time take judgment by default against such defendant if he has not
previously filed an answer, and provided that the citation with the officer’s return thereon shall have been on
file with the clerk for the length of time required by Rule 107.”).
 Tex. R. App. P. 59.1.