Charley C. Gandara, Ind., and D/B/A CJC Metals Company v. JP Morgan Chase Bank, F/K/A the Chase Manhattan Bank, Successor in Interest by Merger to Chase Bank of Texas, N.A., Successor in Interest to Texas Commerce Bank, N.A.

• Court: Court of Appeals of Texas
• Decided: March 17, 2005
• Docket: 01-03-00926-CV
• Status: Published

Opinion

Opinion Issued March 17, 2005

In The

Court of Appeals

For The

First District of Texas

---

NO. 01-03-00926-CV

---

CHARLEY C. GANDARA, INDIVIDUALLY AND D/B/A

C J C METALS COMPANY, Appellant

V.

JP MORGAN CHASE BANK, F/K/A THE CHASE MANHATTAN BANK, SUCCESSOR IN INTEREST BY MERGER TO CHASE BANK OF TEXAS, N.A., SUCCESSOR IN INTEREST TO TEXAS COMMERCE BANK, N.A., Appellee

---

On Appeal from County Civil Court at Law No. 2

Harris County, Texas

Trial Court Cause No. 774872

---

MEMORANDUM OPINION

          Appellant, Charley C. Gandara, appeals the judgment of the trial court granting summary judgment on behalf of appellee, JP Morgan Chase Bank (“ the Bank”). We determine whether the trial court erred in granting summary judgment based on appellant’s contentions that (1) genuine issues of material fact remain; (2) the Bank’s supporting affidavit constituted hearsay; (3) the Bank failed to support its affidavit with anything other than conclusory statements; and (5) appellant was denied the opportunity to conduct discovery. We affirm.

Background

          On June 12, 1997, appellant and Jaime Gandara, appellant’s brother, executed a promissory note and related guaranty agreements. The note stated on its face that appellant and Jaime Gandara were jointly and severally liable for all amounts advanced under the note. On June 25, 2002, the Bank filed its original petition against appellant, individually and d/b/a C J C Metals Co., as well as against Jaime Gandara, alleging that they had defaulted on the promissory note.

          On April 9, 2003, the trial court entered a default judgment as to Jaime Gandara, but the Bank had not yet served appellant. After being served, appellant responded to the Bank’s petition on May 5, 2003, generally denying the Bank’s allegation that he had defaulted on the promissory note, seeking entitlement to Texas Rule of Civil Procedure 245 notice, and stating a special exception and an affirmative defense. The Bank moved for summary judgment on May 8, 2003. In support of its motion, the Bank attached the affidavit of Victoria Harold, assistant treasurer of the Bank. The trial court set a hearing on the motion for May 30, 2003. On the date of the hearing, the hearing was reset for June 6, 2003, at which time the trial court granted the Bank’s motion for summary judgment.

Defendant’s Liability

          In his first and second points of error, appellant contends that the trial court erred in rendering summary judgment in favor of the Bank because genuine issues of material fact remained. Specifically, appellant contends that the Bank never brought forth evidence to show the date on which he had allegedly defaulted, the amounts of principal in default, or the interest calculated; thus, appellant asserts that genuine issues of material fact remain regarding the validity and amount of the debt owed to the Bank.

          When reviewing summary judgment, we follow well-established rules: (1) the movant has the burden of showing that there exists no genuine issue of material fact and that he is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue that would preclude summary judgment, evidence favorable to the non-movant is taken as true; and (3) every reasonable inference from the evidence must be indulged in favor of the non-movant, and any doubts must be resolved in his favor. Tex. R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985); Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex. 1984). A movant establishes his entitlement to summary judgment when he conclusively establishes all essential elements of his cause of action as a matter of law. Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 27 (Tex. 1990).

          To collect on a promissory note as a matter of law, the holder or payee need establish only that (1) there is a note; (2) the holder or payee is the legal owner and holder of the note; (3) the defendant is the maker of the note; and (4) a certain balance is due and owing on the note. Edlund v. Bounds, 842 S.W.2d 719, 724 (Tex. App.—Dallas 1992, writ denied); Resolution Trust Corp. v. Thurlow, 820 S.W.2d 51, 52 (Tex. App.—San Antonio 1991, no writ). When summary judgment proof establishes the above facts, the holder of the note is entitled to recover unless the maker establishes a defense. Groschke v. Gabriel, 824 S.W.2d 607, 610 (Tex. App.—Houston [14th Dist.] 1991, writ denied).

          A photocopy of the promissory note attached to an affidavit in which the affiant swears that the photocopy is a true and correct copy of the original note is proper summary judgment evidence of the note. Life Ins. Co. of VA v. Gar-Dal, Inc., 570 S.W.2d 378, 380 (Tex. 1978); Blankenship v. Robins, 899 S.W.2d 236, 238 (Tex. App.—Houston [14th Dist.] 1994, no writ); Clark v. Dedina, 658 S.W.2d 293, 296 (Tex. App.—Houston [1st Dist.] 1983, writ dism’d). The payee establishes ownership of the note (1) when the payee attests in an affidavit that it is the owner of the note and attaches a sworn “true and correct” copy of the original note to the affidavit; (2) the note shows on its face that it was issued to the payee; and (3) there is no summary judgment proof showing that the note has ever been pledged, assigned, transferred, or conveyed. Blankenship, 899 S.W.2d at 238. When the defendant does not deny the genuineness of his signature on the note, he is established as the maker. Id. To establish that a balance was due and owing on the note, a statement in the affidavit that the Bank had performed all conditions required by the note and the amount of balance due was sufficient. See id. at 238-39.

          In this case, all of the foregoing elements were met. The Bank’s supporting affidavit was attached to a photocopy of the original promissory note executed in its favor, and the affidavit stated that the copy was a true and correct copy of the note. The affidavit also stated that the Bank was the owner and holder of the note. Appellant never denied that his signature appeared on the note or that he was the maker of the note. Finally, the supporting affidavit stated that the Bank had performed all conditions required by the note and that a certain balance remained due and owing. Thus, the Bank established as a matter of law that it was entitled to recover under the note. See Edlund, 842 S.W.2d at 724.

          Contrary to appellant’s assertion, the Bank was not required to present proof regarding the date on which he defaulted; the Bank needed to prove only that there was a note, that it was the legal owner and holder of the note, that appellant was the maker of the note, and that a certain balance was due and owed on the note. See id. Because the Bank established all of the elements of its claim as a matter of law, and because appellant failed to challenge the statements made in the Bank’s supporting affidavit to raise an issue of fact, the trial court properly rendered summary judgment. See Blankenship, 899 S.W.2d at 238; 8920 Corp. v. Alief Alamo Bank, 722 S.W.2d 718, 720 (Tex. App.—Houston [14th Dist.] 1986, writ ref’d n.r.e).

          We overrule appellant’s first and second points of error.

Hearsay

          In his third point of error, appellant contends that the trial court erred in granting summary judgment because the Bank failed to support its claims against appellant with evidence other than inadmissible hearsay; thus, appellant contends that genuine issues of material fact remain. Specifically, appellant contends that, because the Bank’s supporting affidavit failed to authenticate the attached note by way of the business-records exception to the hearsay rule, the affidavit constituted hearsay.

          Objections to hearsay or improper authentication in an affidavit are complaints as to form. Rizkallah v. Conner, 952 S.W.2d 580, 589 (Tex. App.—Houston [1st Dist.] 1997, no pet.); Wilson v. Gen. Motors Acceptance Corp., 897 S.W.2d 818, 821-22 (Tex. App.—Houston [1st Dist.] 1994, no writ). Appellant was required to obtain a ruling on his objection as to the form of the Bank’s supporting affidavit to preserve the complaint. See Tex. R. App. P. 33.1; Rizkallah, 952 S.W.2d at 589. Appellant raised his objection to the Bank’s supporting affidavit in the trial court. However, there is no record of a trial court ruling on that objection; nor is there any reference to the objection or to the competency of the evidence in the order of the trial court. Therefore, nothing in the record demonstrates that the trial court ruled on appellant’s objection. See Rizkallah, 952 S.W.2d at 589. Because appellant failed to obtain a ruling on his objection in the trial court, he waived his objection as to the form of the Bank’s affidavit. See id.

          We overrule appellant’s third point of error.

Conclusory Statements

          In his fourth point of error, appellant contends that the trial court erred in granting summary judgment because the Bank failed to support the claim in its affidavit with anything other than conclusory statements. Specifically, appellant contends that, within the Bank’s supporting affidavit, the statements (1) that appellant defaulted, (2) that all conditions precedent were satisfied, (3) that the Bank had perfected its security interest, and (4) that appellant was liable for the principal balance plus interest were conclusory; as such, the statements were inadequate to meet the movant’s summary judgment burden of establishing uncontrovertible facts. Appellant also asserts that the Bank’s supporting affidavit was not the “best evidence” regarding satisfaction of conditions precedent.

          When summary judgment proof shows that a note exists, that the plaintiff is the owner and holder of the note, that the defendant is the maker of the note, and that a certain balance is owed and due on the note, the plaintiff is entitled to summary judgment unless the defendant raises a defense. Edlund, 842 S.W.2d at 724. We have previously held that the Bank established all of these elements as a matter of law. Because appellant failed to present evidence controverting the Bank’s prima facie case, the Bank was not required to prove that all conditions precedent had been satisfied or that it had perfected its security interest in order to prevail on its claim.

          Moreover, the Bank’s assertions in its affidavit that appellant had defaulted and that appellant was liable for the balance plus principle were not conclusory. A statement in an affidavit that the maker is in default and that a balance remains unpaid and owed is not conclusory. Ecurie Cerveza Racing Team, Inc. v. Tex. Commerce Bank–Southeast, 633 S.W.2d 574, 575 (Tex. App.—Houston [14th Dist.] 1982, no writ). Thus, we hold that the Bank’s affidavit was competent summary judgment evidence. See Blankenship, 899 S.W.2d at 238.

          Appellant also asserts that the Bank’s affidavit was not the best evidence of the matters sought to be established therein. An objection that evidence is not the “best evidence” is a complaint regarding form. Rizkallah, 952 S.W.2d at 589. Thus, appellant was required to obtain a ruling on his objection. See Tex. R. App. P. 33.1; Rizkallah, 952 S.W.2d at 589. Because appellant failed to obtain a ruling, he has waived his complaint regarding best evidence. See id.

          We overrule appellant’s fourth point of error.

Summary Judgment Hearing

          In his fifth point of error, appellant contends that the trial court erred in granting summary judgment in favor of the Bank because he was denied the opportunity to conduct discovery or to otherwise prepare an adequate defense by not being given adequate time to prepare before the hearing. Appellant concedes that the hearing was reset until June 6, 2003, 31 days after his original answer was filed, but contends that the hearing should not have been set earlier than 45 days after his initial appearance.

          Texas Rule of Civil Procedure 166a(c) requires that a motion for summary judgment and any supporting affidavits be filed and served at least 21 days before the time specified for hearing. Tex. R. Civ. P. 166a(c). If the motion is mailed, a party is allowed an additional three days, and the hearing may not be held before 24 days have elapsed. Lewis v. Blake, 876 S.W.2d 314, 315 (Tex. 1994). In computing any period of time, the day of the act is not to be included. Tex. R. Civ. P. 4. The last day of the period is to be included, unless it is a Saturday, Sunday, or legal holiday, in which case the period runs until the end of the next day that is not a Saturday, Sunday, or legal holiday. Id. Saturdays, Sundays, and legal holidays are not counted for any purpose in any time period of five days or fewer in the rules, except for the purpose of the three-day periods in rules 21 and 21a. Id.

          The provisions of Rule 166a, including its notice requirements, are strictly construed because summary judgment is a harsh remedy. Williams v. City of Angleton, 724 S.W.2d 414, 417 (Tex. App.—Houston [1st Dist.] 1987, writ ref’d n.r.e.), overruled on other grounds by Lewis, 876 S.W.2d at 315. In particular, the notice provisions of the rule are intended to prevent the rendition of a judgment without the opposing party’s having had a full opportunity to respond on the merits. Id.

          Appellant misplaces his reliance on rule 245, which pertains to assignment of cases for trial, not to summary judgment hearings. Tex. R. Civ. P. 245. In the present case, the Bank’s motion for summary judgment was filed and served on appellant by both mail and telephonic facsimile on May 8, 2003. Originally, the hearing on the motion for summary judgment was scheduled to take place on May 30, 2003, 22 days after the Bank had filed and served its motion on appellant. The hearing on the motion was reset for June 6, 2003, however—29 days after the motion was filed and served. Thus, appellant had adequate notice under rule 166a(c), which requires 24 days, at most, of the date of the hearing on the summary judgment motion. See Tex. R. Civ. P. 166a(c).

          We overrule appellant’s fifth point of error.

Conclusion

          We affirm the judgment of the trial court.     

                                                             Tim Taft

                                                             Justice

Panel consists of Justices Taft, Keyes, and Hanks.