Opinion
No. 05-07-00059-CV
Opinion Filed March 4, 2008.
On Appeal from the Dallas County Court at Law No. 1, Dallas County, Texas, Trial Court Cause No. CC-04-10588-A.
Before Justices WRIGHT, O'NEILL, and FRANCIS.
MEMORANDUM OPINION
This is a simple collection case. Appellee Citibank (South Dakota), N.A. sued appellant Hector Hinojosa, Jr. to collect over $13,000 in unpaid credit card debt. Citibank moved for traditional summary judgment on its claims against Hinojosa and filed a no-evidence summary judgment on Hinojosa's counterclaims. Hinojosa also moved for summary judgment on both traditional and no evidence grounds. The trial court, after considering all motions and cross-motions, signed a final judgment in favor of Citibank. On appeal, Hinojosa contends the trial court erred in granting Citibank's traditional and no-evidence motions for summary judgment and denying his competing motions. We affirm the portion of the trial court's judgment granting Citibank's traditional and no-evidence motions for summary judgment. We reverse the portion of the judgment awarding trial attorney's fees for $11, 381.00 and remand for further proceedings.
Summary Judgment Evidence
We begin by determining what challenges to the summary judgment evidence Hinojosa properly preserved for our review. Citibank attached the affidavit of Terri Ryning, the vice president of Citicorp Credit Services, Inc. and custodian of records, to its summary judgment motion. Hinojosa filed written objections; however, the trial court failed to rule on them. On appeal, he argues her affidavit lacks personal knowledge, fails to comply with the business records exception to the hearsay rule, and is conclusory.
Failure to affirmatively show the affiant has personal knowledge is a defect in form and must be preserved in the trial court. Thompson v. Curtis, 127 S.W.3d 446, 450 (Tex.App.-Dallas 2004, no pet.); Giese v. NCNB Tex. Forney Banking Ctr., 881 S.W.2d 776, 782 (Tex.App.-Dallas 1994, no writ). Likewise, objections that an affidavit fails to comply with the business records exception to the hearsay rule is also a defect in form that must be preserved in the trial court. Seidner v. Citibank (South Dakota), N.A., 201 S.W.3d 332, 334-35 (Tex.App.-Houston [14th Dist.] 2006, pet. denied). Because Hinojosa failed to obtain rulings on these objections in the trial court, they have been waived. Tex. R. App. P. 33.1; Giese, 881 S.W.2d at 782.
He also objected to Ryning's affidavit as conclusory. An objection that an affidavit is conclusory raises a defect in substance and may be considered for the first time on appeal. Thompson, 127 S.W.3d at 450. Therefore, we will address Hinojosa's argument.
He contends Ryning's statement that "The records attached as Attachments 1, 2, and 3 are true and correct copies of the originals" is conclusory because she fails to describe the records, and the records are not copies of the originals but are computer generated. First, Hinojosa's computer records argument is without merit. See, e.g., Voss v. Sw. Bell Tel. Co., 610 S.W.2d 537, 538 (Tex.Civ.App.-Houston [1st Dist.] 1980, writ ref'd n.r.e.) (noting legislature did not see any necessity for additional requirements where the records sought to be introduced into evidence were electronically produced); see also Finn v. Finn, 658 S.W.2d 735, 754 (Tex.App.-Dallas 1983, writ ref'd n.r.e.) (recognizing computer printouts as business records). Second, Ryning explained the content of the three attachments in later paragraphs of her affidavit; therefore, her statement is not conclusory. Furthermore, as custodian of records, her personal knowledge of such records provides adequate factual support for her statement. See, e.g., Choctaw Prop., L.L.C. v. Aledo Indep. Sch. Dist., 127 S.W.3d 235, 243 (Tex.App.-Waco 2003, no pet.); see also Jones v. Citibank (South Dakota), N.A., 235 S.W.3d 333, 227-38 (Tex.App.-Fort Worth 2007, no pet.).
He also challenges the following statement: "Attached hereto and incorporated into this Affidavit . . . is a true and correct copy of the cardmember agreement. . . ." He claims the agreement is incomplete because a later statement in the agreement references a folder, which is not included in the summary judgment evidence. We construe this argument as one that speaks to the weight of the evidence as opposed to its admissibility. As such, it is not conclusory.
The remaining statements he challenges involve the attached billing statements, the attached copies of checks, Hinojosa's use of the account to make purchases, and the billing of the account. As noted above, such statements are not conclusory because as the custodian of records, she bears the responsibility of being familiar with such information. Thus, her background provides adequate factual support for the alleged "conclusory" statements. Id. Having considered Hinojosa's arguments, we conclude Ryning's affidavit is not conclusory. Therefore, the trial court properly considered her affidavit in Citibank's motion for summary judgment, and it is properly before this Court to consider as well.
He also challenges two other statements involving the balance due on the account and whether all conditions precedent have been performed. He claims Ryning has no personal knowledge of this information, and it is based on "rank hearsay." Because a trial court must rule on objections to personal knowledge and hearsay before they are properly preserved, and no such ruling appears in the record, these objections are not properly before us. Thompson, 127 S.W.3d at 450; St. Paul Ins. Co. v. Mefford, 994 S.W.2d 715, 721 (Tex.App.-Dallas 1999, pet. denied).
Breach of Contract
Citibank and Hinojosa entered into a credit card agreement, and Hinojosa defaulted on payments. As of September 10, 2004, Hinojosa owed $13,381.55 on the account balance. Citibank filed suit against Hinojosa for account stated, breach of contract, breach of oral contract, restitution, common law debt, assumpsit, unjust enrichment, and attorney's fees. Hinojosa filed a counterclaim alleging Texas Finance Code and DTPA violations and unreasonable debt collection practices. Citibank moved for summary judgment on its claims and Hinojosa's counterclaims, which the trial court granted without stating the basis for its decision. Thus, if any of its theories are meritorious, we must uphold the order. Winchek v. Am. Exp. Travel Related Servs. Co., Inc., 232 S.W.3d 197, 202 (Tex.App.-Houston [1st Dist.] 2007, no pet.).
Hinojosa argues Citibank failed to present the court with any evidence of a binding contract. In considering his issue, we use the well-established standard of review for traditional summary judgment motions. See Nixon v. Mr. Prop. Mgmt. Co., Inc., 690 S.W.2d 546, 548-49 (Tex. 1985). When, as here, both sides move for summary judgment and the trial court grants one motion and denies the other, we review both sides' summary judgment evidence and determine all questions presented and render the judgment the trial court should have rendered. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000). After applying the appropriate standard of review, we conclude the trial court properly granted a traditional summary judgment on Citibank's breach of contract claim.
Ryning's affidavit includes a 1996 credit card agreement stating, "This Agreement is binding on you unless you cancel your account within 30 days after receiving the card and you have not used or authorized use of your account." She also states Hinojosa's account is governed by the agreement "as it may be amended from time to time." Two Notices of Change in Terms are also attached to her affidavit, one effective in May 1999 and the other in May 2000.
Regardless of whether we apply federal, Texas, or South Dakota law, a contract exists between Hinojosa and Citibank. Under federal law, the issuance of a credit card constitutes a credit offer, and the use of the card constitutes acceptance. Jones, 235 S.W.3d at 339. Under Texas law, if one party signs a contract, the other may accept by his acts, conduct, or acquiescence to the terms of the contract, making it binding on both parties. Id.; see also Benser v. Citibank (South Dakota), N.A., No. 08-99-00242-CV, 2000 WL 1231386, at *5 (Tex.App.-El Paso Aug. 31, 2000, no pet.) (not designated for publication) (concluding appellant's use of credit card and payments to account showed he understood obligation to bank and contract had been formed). Finally, under South Dakota law "the use of an accepted credit card or the issuance of a credit card agreement and the expiration of thirty days from the date of issuance without written notice from a card holder to cancel" creates a binding contract. See S.D. Codified Laws § 54-11-9 (1983). Citibank established Hinojosa accepted the card and used it; therefore, it established the existence of a contract as a matter of law.
In an attempt to preclude summary judgment, Hinojosa asserts because Citibank attached a 1999 card agreement to a previous motion for summary judgment, a fact issue exists regarding the controlling agreement-whether it is the 1996 version or the 1999 version. His argument is without merit. First, Ryning's affidavit establishes the agreement may be amended from time to time. Therefore, the 1999 agreement is not a different agreement, but rather the same agreement as it may be amended from time to time. Second, the agreements contain the same language detailing when it becomes binding and how to cancel it, if necessary. Thus, Hinojosa's argument fails to create a genuine issue of material fact regarding the contract. Hinojosa also claims a fact issue exists on his acceptance of the agreement's terms because Citibank did not provide the annual interest rate. The agreement states "This Agreement and the folder containing the card are your Citibank Card Agreement. The folder contains important account information, including the annual percentage rate and an indication whether there is a membership fee. Please read and keep both the folder and this Agreement for your records." Because the folder is not included in Citibank's evidence, he argues an important term is missing. Again, Hinojosa's argument fails.
Although the folder is not in evidence, the agreement and the Notice of Change in Terms specifically states "the annual percentage rate in effect and any subsequent changes to it will appear on the billing statement." Citibank included in its summary judgment evidence Hinojosa's billing statements, which include the applicable interest rate. Therefore, the contract is not missing an essential term.
Hinojosa relies on Tully v. Citibank (South Dakota), N.A., 173 S.W.3d 212 (Tex.App.-Texarkana 2005, no pet.) to support his interest rate argument. The facts here are distinguishable. We question whether the interest issue was properly before the court despite the court's liberal construction of the issue. Id. at 217 fn.4. The Tully court determined the contract introduced into evidence did not specify the agreed upon interest rate, and the only evidence of the rate was specified on the monthly statements. Id. at 217. Here, the contract specifically states the annual percentage rate in effect appears on the monthly statements and such statements are in evidence. Thus, we conclude Tully does not support Hinojosa's argument.
Because Hinojosa failed to dispute Citibank's evidence that he entered into a credit card agreement as a matter of law and because he failed to provide evidence contradicting the validity of the card agreement under any laws, the trial court properly granted Citibank's traditional motion for summary judgment. Tex. R. Civ. P. 166(c). As such, we need not address whether summary judgment was appropriate under Citibank's other causes of action. See Winchek, 232 S.W.3d at 202.
Hinojosa's Counterclaims
Hinojosa filed counterclaims against Citibank for violations of the Texas Finance Code and Deceptive Trade Practices Act. Citibank filed a no-evidence summary judgment motion challenging these claims, which the trial court granted. Hinojosa challenges this ruling, which we review under the well-established standard for no-evidence motions for summary judgment. Lee v. Haynes Boone, L.L.P., 129 S.W.3d 192, 196 (Tex.App.-Dallas 2004, pet. denied).
Hinojosa claims Citibank used false and deceptive means to collect consumer debt in violation of Texas Finance Code section 392.304(a)(19) and misrepresented the consumer debt in violation of section 392.304(a)(8). See Tex. Fin. Code Ann. § 392.304(a)(8), (19) (Vernon 2006). He argues alleged discrepancies between Paula Sullinger's affidavit and her deposition testimony establish misrepresentations.
After reviewing the documents, we disagree. Hinojosa fails to articulate how any of the alleged discrepancies between Sullinger's deposition and affidavit are material to his indebtedness or establish that Citibank "misrepresent[ed] the character, extent, or amount of a consumer debt" or "us[ed] any other false representation or deceptive means to collect debt. . . ." Id. Thus, he has not presented more than a scintilla of probative evidence to raise a genuine issue of material fact. Lee, 129 S.W.3d at 196.
He also asserts Citibank violated the finance code by representing under oath that two different agreements, one dated 1996 and another dated 1999, govern his account. As previously discussed, the 1999 agreement is not a different agreement, but rather the same agreement as it may be amended from time to time. Therefore, Hinojosa failed to produce more than a scintilla of probative evidence to raise a genuine issue of material fact to support his counterclaim for violations of the Texas Finance Code.
Because his DTPA counterclaim is based exclusively on his finance code violation, we likewise conclude he has failed to present evidence raising a genuine issue of material fact on this cause of action. Thus, the trial court properly granted Citibank's no-evidence motion for summary judgment on Hinojosa's counterclaims.
Attorney's Fees
Citibank's attorney, Jennifer J. Spencer, filed an affidavit seeking reimbursement of $11,831.00 in reasonable fees, which included eighty-eight hours spent litigating the case. The trial court awarded $11,831.00, plus $5,000 for any unsuccessful post-judgment motions, $5,000 for an unsuccessful appeal to the court of appeals, and $5,000 for an unsuccessful petition for review to the Supreme Court of Texas. Hinojosa contends he created a fact issue when his attorney, Jerry J. Jarzombek, filed a controverting affidavit. We agree.
Generally, a trial court does not abuse its discretion when an attorney testifies the fees incurred were reasonable and necessary and summarizes the hours worked and rate charged. Hachar v. Hachar, 153 S.W.3d 138, 143 (Tex.App.-San Antonio 2004, no pet.). However, the award of such fees is improper unless the evidence of the reasonableness of those fees is uncontroverted. Guity v. C.C.I. Enter., Co., 54 S.W.3d 526, 528 (Tex.App.-Houston [1st Dist.] 2001, no pet.). An affidavit filed by non-movant's counsel that simply criticizes the fees sought by the movant as unreasonable without setting forth the affiant's qualifications or the basis for his opinion will not be sufficient to defeat summary judgment. Basin Credit Consultants, Inc. v. Obregon, 2 S.W.3d 372, 373 (Tex.App.-San Antonio 1999, pet. denied). That is not the case here, given that Hinojosa's attorney filed an affidavit setting forth his qualifications and why Citibank's trial fees are unreasonable. Thus, his affidavit created a fact issue regarding the reasonableness of attorney's fees awarded for Spencer's trial work, which precluded summary judgment. However, he failed to create a fact issue as to the reasonableness of appellate fees awarded; therefore, the trial court properly awarded these fees. As such, we reverse and remand to the trial court for further proceedings the reasonableness of attorney's trial fees. See Guity, 54 S.W.3d at 529.
Conclusion
After considering Hinojosa's issues, we affirm the portion of the trial court's judgment granting Citibank's traditional motion for summary judgment and no-evidence motion for summary judgment on Hinojosa's counterclaims. We reverse the portion of the judgment awarding attorney's trial fees for $11,831.00 and remand for further proceedings.