Opinion issued February 12, 2015
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-13-00530-CV ——————————— COUNTY REAL ESTATE VENTURE AND JAMES MORGAN, Appellants V. FARMERS AND MERCHANTS BANK OF LONG BEACH, Appellee
On Appeal from the County Civil Court at Law No. 4 Harris County, Texas Trial Court Case No. 995698
MEMORANDUM OPINION
In this suit to recover a credit card debt, County Real Estate Venture and
James Morgan, the debtors, appeal the trial court’s summary judgment in favor of
Farmers and Merchants Bank of Long Beach, the creditor. Venture and Morgan
contend that (1) genuine fact issues exist, (2) the Bank’s affidavits are inadequate to conclusively establish the debt owed, and (3) the trial court erred in denying a
new trial. We hold that the Bank’s summary-judgment evidence fails to
conclusively establish its claim. We therefore reverse and remand.
Background
In July 2011, the Bank sued Venture and Morgan for breach of contract for
amounts owed on a credit card agreement totaling $63,390.83. Venture and
Morgan denied that they owed a debt on the account.
In February 2013, the Bank moved for summary judgment on its breach of
contract claim, attaching (1) an affidavit from bank supervisor J. Barnes, (2) a
credit card application, and (3) a page of an account statement listing “CHARGE
OFF ACCOUNT-PRINCIPALS $62,665.24,” “CHARGE OFF ACCOUNT
‘FINANCE CHARGES’ 702.59,” plus a newly incurred and charged-off $25 late
fee. Venture and Morgan failed to respond to the motion for summary judgment.
The trial court granted judgment for the Bank for $63,390.83 and an additional
$21,130.00 in attorney’s fees. Ventures and Morgan moved for a new trial, and the
trial court denied the motions.
Discussion
Venture and Morgan challenge the trial court’s judgment, contending that
the Bank’s summary-judgment evidence fails to establish its affirmative claim for
breach of contract as a matter of law.
2 Standard of Review
We review de novo the trial court’s ruling on a motion for summary
judgment. Samuel v. Fed. Home Loan Mortg. Corp., 434 S.W.3d 230, 233 (Tex.
App.—Houston [1st Dist.] 2014, no pet.) (citing Mann Frankfort Stein & Lipp
Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009)). In a traditional
motion for summary judgment, like the one filed in this case, the movant must
establish that no genuine issue of material fact exists and that the movant is entitled
to judgment as a matter of law. See TEX. R. CIV. P. 166a(c); Little v. Tex. Dep’t of
Crim. Justice, 148 S.W.3d 374, 381 (Tex. 2004). A judgment seeking affirmative
relief requires a movant to prove that it is entitled to judgment as a matter of law
on each element of its cause of action. Winchek v. Am. Express Travel Related
Servs. Co., Inc., 232 S.W.3d 197, 201 (Tex. App.—Houston [1st Dist.] 2007, no
pet.) (citing Rhone–Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222–23 (Tex. 1999),
and Rizkallah v. Conner, 952 S.W.2d 580, 582 (Tex. App.—Houston [1st Dist.]
1997, no writ)). “Only if the movant conclusively establishes its cause of action
does the burden shift to the nonmovant to respond with evidence raising a genuine
issue of material fact that would preclude summary judgment.” Id. at 202 (citing
Steel, 997 S.W.2d at 222–23). We indulge every reasonable inference in the
nonmovant’s favor. Samuel, 434 S.W.3d at 233 (citing Valence Operating Co. v.
3 Dorsett, 164 S.W.3d 656, 661 (Tex. 2005), and Provident Life & Accident Ins. Co.
v. Knott, 128 S.W.3d 211, 215 (Tex. 2003)).
In summary judgment cases, “[d]efects in the form of affidavits or
attachments will not be grounds for reversal unless specifically pointed out by
objection by an opposing party with opportunity, but refusal, to amend.” TEX. R.
CIV. P. 166a(f) (West 2014). An objection that an affidavit was not based on
personal knowledge is a defect in form that must be preserved by objection in the
trial court. Rizkallah, 952 S.W.2d at 585. However, “an objection that an affidavit
is conclusory is an objection to the substance of the affidavit that can be raised for
the first time on appeal.” Green v. Indus. Specialty Contractors, Inc., 1 S.W.3d
126, 130 (Tex. App.—Houston [1st Dist.] 1999, no pet.); see also Wal-Mart
Stores, Inc. v. Merrell, 313 S.W.3d 837, 839 (Tex. 2010) (noting in summary
judgment case that “conclusory statements cannot support a judgment even when
no objection was made to the statements at trial.” (quoting Coastal Transp. Co. v.
Crown Cent. Petroleum Corp., 136 S.W.3d 227, 232 (Tex. 2004))).
Applicable Law
To prevail on its breach of contract claim, the Bank was required to prove:
(1) the existence of a valid contract; (2) performance or tendered performance by
the plaintiff; (3) breach by the defendant; and (4) damages sustained as a result of
that breach. Winchek, 232 S.W.3d at 202 (citing Prime Prods., Inc. v. S.S.I.
4 Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.—Houston [1st Dist.] 2002, pet.
denied)).
Analysis
Venture and Morgan first observe that Barnes’s affidavit statements about
ownership of the credit card debt and the amount owed are conclusory. With
respect to the amount owed on the account, he states: “After allowing all offsets,
credits and payments, there is due and owing to FARMERS AND MERCHANTS
BANK OF LONG BEACH on the contract $63,390.83.” The attached account
page contains a current balance owed and “charged-off,” but it is devoid of a
listing of the charges themselves, as well as any payments or offsets.
In credit card cases, summary judgment evidence of damages is sufficient
where it “provide[s] detailed explanations of the cost of credit . . . the methodology
employed” to calculate the balance owed. Colvin v. Tex. Dow Emps. Credit Union,
No. 01-11-00342-CV, 2012 WL 5544950, at *6 (Tex. App.—Houston [1st Dist.]
Nov. 15, 2012, no pet.) (mem. op.) (quoting Winchek, 232 S.W.3d at 205).
Barnes’s affidavit and the charge-off page do neither. In other cases
similarly wanting in proof, we have reversed. For example, in Wande v. Pharia,
L.L.C., we held that the creditor failed to establish the amount owned, where it had
attached a cardholder agreement but failed to attach evidence of the calculations
used to reach the claimed unpaid balance. See No. 01–10–00481–CV, 2011 WL
5 3820774, at *5 (Tex. App—Houston [1st Dist.] Aug.
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Opinion issued February 12, 2015
In The
Court of Appeals For The
First District of Texas ———————————— NO. 01-13-00530-CV ——————————— COUNTY REAL ESTATE VENTURE AND JAMES MORGAN, Appellants V. FARMERS AND MERCHANTS BANK OF LONG BEACH, Appellee
On Appeal from the County Civil Court at Law No. 4 Harris County, Texas Trial Court Case No. 995698
MEMORANDUM OPINION
In this suit to recover a credit card debt, County Real Estate Venture and
James Morgan, the debtors, appeal the trial court’s summary judgment in favor of
Farmers and Merchants Bank of Long Beach, the creditor. Venture and Morgan
contend that (1) genuine fact issues exist, (2) the Bank’s affidavits are inadequate to conclusively establish the debt owed, and (3) the trial court erred in denying a
new trial. We hold that the Bank’s summary-judgment evidence fails to
conclusively establish its claim. We therefore reverse and remand.
Background
In July 2011, the Bank sued Venture and Morgan for breach of contract for
amounts owed on a credit card agreement totaling $63,390.83. Venture and
Morgan denied that they owed a debt on the account.
In February 2013, the Bank moved for summary judgment on its breach of
contract claim, attaching (1) an affidavit from bank supervisor J. Barnes, (2) a
credit card application, and (3) a page of an account statement listing “CHARGE
OFF ACCOUNT-PRINCIPALS $62,665.24,” “CHARGE OFF ACCOUNT
‘FINANCE CHARGES’ 702.59,” plus a newly incurred and charged-off $25 late
fee. Venture and Morgan failed to respond to the motion for summary judgment.
The trial court granted judgment for the Bank for $63,390.83 and an additional
$21,130.00 in attorney’s fees. Ventures and Morgan moved for a new trial, and the
trial court denied the motions.
Discussion
Venture and Morgan challenge the trial court’s judgment, contending that
the Bank’s summary-judgment evidence fails to establish its affirmative claim for
breach of contract as a matter of law.
2 Standard of Review
We review de novo the trial court’s ruling on a motion for summary
judgment. Samuel v. Fed. Home Loan Mortg. Corp., 434 S.W.3d 230, 233 (Tex.
App.—Houston [1st Dist.] 2014, no pet.) (citing Mann Frankfort Stein & Lipp
Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009)). In a traditional
motion for summary judgment, like the one filed in this case, the movant must
establish that no genuine issue of material fact exists and that the movant is entitled
to judgment as a matter of law. See TEX. R. CIV. P. 166a(c); Little v. Tex. Dep’t of
Crim. Justice, 148 S.W.3d 374, 381 (Tex. 2004). A judgment seeking affirmative
relief requires a movant to prove that it is entitled to judgment as a matter of law
on each element of its cause of action. Winchek v. Am. Express Travel Related
Servs. Co., Inc., 232 S.W.3d 197, 201 (Tex. App.—Houston [1st Dist.] 2007, no
pet.) (citing Rhone–Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222–23 (Tex. 1999),
and Rizkallah v. Conner, 952 S.W.2d 580, 582 (Tex. App.—Houston [1st Dist.]
1997, no writ)). “Only if the movant conclusively establishes its cause of action
does the burden shift to the nonmovant to respond with evidence raising a genuine
issue of material fact that would preclude summary judgment.” Id. at 202 (citing
Steel, 997 S.W.2d at 222–23). We indulge every reasonable inference in the
nonmovant’s favor. Samuel, 434 S.W.3d at 233 (citing Valence Operating Co. v.
3 Dorsett, 164 S.W.3d 656, 661 (Tex. 2005), and Provident Life & Accident Ins. Co.
v. Knott, 128 S.W.3d 211, 215 (Tex. 2003)).
In summary judgment cases, “[d]efects in the form of affidavits or
attachments will not be grounds for reversal unless specifically pointed out by
objection by an opposing party with opportunity, but refusal, to amend.” TEX. R.
CIV. P. 166a(f) (West 2014). An objection that an affidavit was not based on
personal knowledge is a defect in form that must be preserved by objection in the
trial court. Rizkallah, 952 S.W.2d at 585. However, “an objection that an affidavit
is conclusory is an objection to the substance of the affidavit that can be raised for
the first time on appeal.” Green v. Indus. Specialty Contractors, Inc., 1 S.W.3d
126, 130 (Tex. App.—Houston [1st Dist.] 1999, no pet.); see also Wal-Mart
Stores, Inc. v. Merrell, 313 S.W.3d 837, 839 (Tex. 2010) (noting in summary
judgment case that “conclusory statements cannot support a judgment even when
no objection was made to the statements at trial.” (quoting Coastal Transp. Co. v.
Crown Cent. Petroleum Corp., 136 S.W.3d 227, 232 (Tex. 2004))).
Applicable Law
To prevail on its breach of contract claim, the Bank was required to prove:
(1) the existence of a valid contract; (2) performance or tendered performance by
the plaintiff; (3) breach by the defendant; and (4) damages sustained as a result of
that breach. Winchek, 232 S.W.3d at 202 (citing Prime Prods., Inc. v. S.S.I.
4 Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.—Houston [1st Dist.] 2002, pet.
denied)).
Analysis
Venture and Morgan first observe that Barnes’s affidavit statements about
ownership of the credit card debt and the amount owed are conclusory. With
respect to the amount owed on the account, he states: “After allowing all offsets,
credits and payments, there is due and owing to FARMERS AND MERCHANTS
BANK OF LONG BEACH on the contract $63,390.83.” The attached account
page contains a current balance owed and “charged-off,” but it is devoid of a
listing of the charges themselves, as well as any payments or offsets.
In credit card cases, summary judgment evidence of damages is sufficient
where it “provide[s] detailed explanations of the cost of credit . . . the methodology
employed” to calculate the balance owed. Colvin v. Tex. Dow Emps. Credit Union,
No. 01-11-00342-CV, 2012 WL 5544950, at *6 (Tex. App.—Houston [1st Dist.]
Nov. 15, 2012, no pet.) (mem. op.) (quoting Winchek, 232 S.W.3d at 205).
Barnes’s affidavit and the charge-off page do neither. In other cases
similarly wanting in proof, we have reversed. For example, in Wande v. Pharia,
L.L.C., we held that the creditor failed to establish the amount owned, where it had
attached a cardholder agreement but failed to attach evidence of the calculations
used to reach the claimed unpaid balance. See No. 01–10–00481–CV, 2011 WL
5 3820774, at *5 (Tex. App—Houston [1st Dist.] Aug. 25, 2011, no pet.) (mem. op)
(noting that the creditor failed to “direct us to any document in the record
supporting the entire claimed amounts.”). Similarly, in Colvin, we reasoned that
the creditor failed to establish contract damages, because it did not show how it
reached the claimed damages amount nor offer monthly statements showing
charges, payments, or interest calculations. Colvin, 2012 WL 5544950, at *6.
Further, in a case about a bank loan, we held that the lender’s evidence was not
sufficient to establish the terms of the loan contract as a matter of law where it
lacked any document establishing the agreed terms. Williams v. Unifund CCR
Partners Assignee of Citibank, 264 S.W.3d 231, 236 (Tex. App.—Houston [1st
Dist.] 2008, no pet.).
In contrast, in Winchek, we affirmed summary judgment for a creditor,
where the evidence included the credit card agreement, the methodology employed
by the credit card company, a detailed explanation of the cost of credit, and the
billing statements that included past-due amounts owed. Winchek, 232 S.W.3d at
204–05. The credit card company’s affiant attested that the company “sent
monthly statements of account to [the borrower], that each statement set forth in
detail all the debits and credits to [the borrower’s] account, and that each statement
‘reflected the total amounts due . . .’” Id. at 205. The affiant attested to the
specific amount of damages after payments and offsets had been made. Id.
6 The present case is more like Wande and Colvin than Winchek. Although
Barnes avers that an attachment to his affidavit included the contract at issue and
that the Bank “performed all conditions of the contract and all conditions precedent
to recovery on the contract,” the attachments do not contain any statement of
account showing past-due charges, or any calculation for the Bank’s claimed
outstanding balance including offsets and credits. See Colvin, 2012 WL 5544950,
at *6; Wande, 2011 WL 3820774, at *5. The attachment also shows one page of a
credit card application, but does not contain the credit agreement or other
document establishing the agreed terms. See Williams, 264 S.W.3d at 236.
Accordingly, we hold that the Bank has failed to adduce sufficient evidence to be
entitled to summary judgment.
7 Conclusion
Because the Bank’s affidavit and attachments fail to conclusively establish
contract liability and damages, we reverse the trial court’s summary judgment and
remand the case for further proceedings. 1 All pending motions are dismissed as
moot.
Jane Bland Justice
Panel consists of Chief Justice Radack and Justices Bland and Huddle.
1 We decline to address Venture and Morgan’s complaint that the trial court erred in denying their motion new trial because that complaint would not result in greater appellate relief. See TEX. R. APP. P. 47.1.