GM Metal, Inc. v. JP Environmental Recycling, LLC

• Court: Court of Appeals of Texas
• Decided: January 12, 2015
• Docket: 02-13-00392-CV
• Status: Published

Opinion

COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH

NO. 02-13-00392-CV

GM METAL, INC. APPELLANT

V.

JP ENVIRONMENTAL RECYCLING, APPELLEE LLC

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FROM THE 89TH DISTRICT COURT OF WICHITA COUNTY TRIAL COURT NO. 174,499-C

MEMORANDUM OPINION1

In this breach of contract case, Appellant GM Metal, Inc. challenges the

legal and factual sufficiency of the evidence to support the trial court’s judgment

in favor of Appellee JP Environmental Recycling, LLC. We will affirm.

1 See Tex. R. App. P. 47.4. In January 2010, GM contracted with JP to purchase two excavators—a

Caterpillar 320 CL and a Hitachi 2X270 LC—for a total price of $240,000. Both

excavators already had liens against them in favor of the entities from whom JP

had obtained financing when it made the purchases, and JP continued making its

payments on the machines after GM began paying JP under their contract.

Between January and October 2010, GM made contractual payments to

JP totaling $105,000. But in the fall of 2010, GM stopped making payments,

leaving a balance remaining due of $135,000. Around this time, JP took

possession of a Genesis hydraulic processing shear that GM owned, and GM

paid JP $12,000. Ultimately, JP, who had ceased doing business, was unable to

continue making its payments, and the lienholders who had financed JP’s

purchase of the excavators repossessed them.

Both parties sued each other for breach of contract. JP sought to recover

the balance due under the contract, and GM claimed that it had reached an

agreement with JP whereby JP agreed to accept the shear that it had taken from

GM in full satisfaction of the amount that GM owed JP under the contract. GM

took the same position at the bench trial that eventually followed—that the parties

had reached an accord and satisfaction of the excavator debt when JP accepted

the shear plus $12,000 from GM in satisfaction of the amount that GM owed

under the contract. JP’s witnesses recounted things differently—JP took

possession of the shear merely as collateral for the money that GM owed under

2 the contract. The trial court found in favor of JP, awarded it $135,000, and

ordered it to return the shear to GM.2

In two issues, GM argues that the evidence is legally and factually

insufficient “to support the monetary judgment in favor of” JP. GM contends that

“[t]he evidence conclusively establishes that an accord and satisfaction of the

excavator debt was accomplished on or about February 8, 2011” and,

alternatively, that “[i]n light of the substantial evidence of accord and satisfaction,

the money judgment entered by the trial court below . . . is clearly wrong and

unjust.” Thus, more precisely stated, GM argues that the evidence is legally and

factually insufficient to support the trial court’s rejection of GM’s affirmative

defense of accord and satisfaction.

GM bore the burden of proof on its affirmative defense. See Compass

Bank v. MFP Fin. Servs., Inc., 152 S.W.3d 844, 851 (Tex. App.—Dallas 2005,

pet. denied); see also Tex. R. Civ. P. 94. A party challenging the legal

sufficiency of an adverse finding on an issue on which the party had the burden

of proof at trial must demonstrate on appeal that the evidence conclusively

established, as a matter of law, all vital facts in support of the issue. Dow Chem.

Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001). The reviewing court first

examines the record for evidence that supports the finding, crediting favorable

evidence if a reasonable factfinder could, while disregarding contrary evidence,

2 GM requested that the trial court enter findings of fact and conclusions of law, but the record does not contain any findings or conclusions.

3 unless a reasonable factfinder could not. Id.; see City of Keller v. Wilson, 168

S.W.3d 802, 827 (Tex. 2005). If no evidence supports the finding, then the

reviewing court will examine the entire record to determine if the contrary

proposition is established as a matter of law. Dow Chem. Co., 46 S.W.3d at 241.

When a party attacks the factual sufficiency of an adverse finding on an

issue on which the party had the burden of proof, it must demonstrate on appeal

that the adverse finding is against the great weight and preponderance of the

evidence. Id.

In performing these evidentiary-sufficiency reviews, we must be mindful

that the factfinder is the sole judge of the credibility of the witnesses and the

weight to be given their testimony. McGalliard v. Kuhlmann, 722 S.W.2d 694,

696‒97 (Tex. 1986); Nwokedi v. Unlimited Restoration Specialists, Inc., 428

S.W.3d 191, 199, 205 (Tex. App.—Houston [1st Dist.] 2014, pet. denied). It is

responsible for resolving conflicts in the evidence, and it may believe one witness

and disbelieve another. McGalliard, 722 S.W.2d at 697. We may not reweigh

the evidence and set aside a finding merely because we are of the opinion that a

different result is more reasonable. Pool v. Ford Motor Co., 715 S.W.2d 629, 634

(Tex. 1986).

An accord and satisfaction exists when parties agree to discharge an

existing obligation in a manner other than in accordance with the terms of their

original contract. Richardson v. Allstate Tex. Lloyd’s, 235 S.W.3d 863, 865 (Tex.

4 App.—Dallas 2007, no pet.). Because a valid accord and satisfaction depends

upon an agreement, it only occurs when the parties mutually assent to it. Id.

Gurmit Singh, GM’s former vice president and manager of the Wichita

Falls yard, testified that he and Zach Parker, JP’s former vice president, agreed

that JP would accept both (1) the shear that it had borrowed from GM and

(2) $12,000 in satisfaction of the amount that GM owed under the contract.

Singh denied that GM pledged the shear to JP as collateral. Likewise, M.S.

Mann, GM’s president, testified that GM and JP had reached an agreement to

pay off the amount owed by GM under the contract by trading that balance for

the shear and $12,000. Mann recounted that the agreement “cancelled out”

GM’s debt under the contract and that the shear was not offered to JP as

collateral.

Contrary to Singh’s and Mann’s testimony, Jim Parker, JP’s former

president, testified that JP took possession of GM’s shear as collateral until GM

was able to pay JP the amount that it owed under the contract. Jim agreed that

the shear “wasn’t intended to wipe out the balance owed under [the] contract.”

Similarly, Zach testified that he took the shear from GM as collateral because GM

either had been late or had not made its payments under the contract. When

asked at trial whether he understood GM’s position that JP had accepted the

shear in satisfaction of the amount that GM owed under the contract, Zach

explained that it was the first time that he had heard such a thing:

5 Q. . . . Again, I’m not asking you to agree with it. I’m just asking you if you understand that’s their position?

A. I do now.

Q. Well, and now -- do you mean now as in today?

A. Yeah. You just brought that to my attention.

Disagreeing with GM’s account of the supposed accord and satisfaction, Zach

testified that GM “never said take this [the shear] in lieu of the debt against the

excavators.”

GM and JP thus offered conflicting evidence of an accord and satisfaction

regarding the disposition of the excavator debt remaining under the contract, and

the trial court, as factfinder, chose to resolve the conflict in favor of JP.3 Because

there is evidence that GM and JP did not reach an accord and satisfaction, and

because that evidence is not so against the great weight and preponderance of

all the credible evidence, we hold that the evidence is both legally and factually

sufficient to support the trial court’s rejection of GM’s accord and satisfaction

affirmative defense. See Dow Chem. Co., 46 S.W.3d at 241. We overrule GM’s

two issues and affirm the trial court’s judgment.

/s/ Bill Meier

BILL MEIER JUSTICE

3 The trial court stated in its letter ruling that it did not find GM’s witnesses credible.

6 PANEL: DAUPHINOT, GARDNER, and MEIER, JJ.

DELIVERED: January 8, 2015