Opinion
No. 14-03-00440-CV
Substituted Memorandum Opinion filed October 21, 2004.
On Appeal from the 113th District Court, Harris County, Texas, Trial Court Cause No. 02-23996.
Affirmed.
SUBSTITUTED MEMORANDUM OPINION
In this action to enforce a guaranty agreement, Samuel T. Rose appeals a summary judgment in favor of Comerica Bank-Texas (the "bank") on various grounds. We affirm.
Background
In 1999, while Vice President and Chief Operating Officer of Micro Support Unlimited, Inc. ("Micro Support"), Rose negotiated a commercial line of credit for Micro Support and personally executed a continuing and unlimited guaranty (the "guaranty") of Micro Support's existing and future indebtedness to the bank. When Micro Support later defaulted on the debt, the bank made a demand on Rose for payment of the sum then due, which Rose failed to pay. The bank filed this action against Rose on the guaranty and obtained a summary judgment totaling $356,000 plus interest.
Standard of Review
A traditional summary judgment may be granted if the motion and summary judgment evidence show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law on the issues expressly set out in the motion or response. TEX. R. CIV. P. 166a(c). To rely on an affirmative defense to oppose a summary judgment, a nonmovant must present evidence sufficient to raise a fact issue on each element of the defense. Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984). In reviewing a summary judgment, we take as true all evidence favoring the nonmovant and indulge every reasonable inference, and resolve any doubts, in the nonmovant's favor. IHS Cedars Treatment Ctr. v. Mason, ___ S.W.3d ___, ___ (Tex. 2004).
General Challenge
Rose's first issue globally challenges the summary judgment on the ground that the bank failed to show that there were no fact issues and that it was entitled to judgment as a matter of law. However, because this issue is not supported by any specific basis on which the bank failed to sustain its burden of proof, it presents nothing for our review and is overruled.
Fraud
Rose's second issue challenges the summary judgment against his counterclaim and affirmative defense of fraudulent inducement on the ground that his summary judgment proof raised fact issues whether the bank misrepresented, or failed to disclose, the true nature and extent of the guaranty. In particular, Rose claims that the bank induced him into signing the guaranty by specifically and falsely representing to him that his guarantee was for only $60,000, and never requested or explained that it would guaranty the entire present and future indebtedness of Micro Support.
The bank moved for summary judgment against Rose's fraud claim on the ground, among others, that he was charged as a matter of law with knowledge of the guaranty's express provisions making it a continuing and unlimited guaranty and could not avoid those provisions with a claim of fraud without showing some form of trickery. Because Rose's summary judgment evidence does not raise a fact issue concerning any such trickery, his third issue does not demonstrate that the trial court erred in granting summary judgment on his fraudulent inducement counterclaim or affirmative defense and is, accordingly, overruled.
See Town N. Nat'l Bank v. Broaddus, 569 S.W.2d 489, 494 (Tex. 1978) (holding that extrinsic evidence is not admissible to show fraud in the inducement of a note unless there is a further showing of trickery in addition to the payee representing that the maker would not be liable on the note).
Special Relationship Claims
Rose's third and fourth issues challenge the summary judgment against his counterclaims and affirmative defenses asserting constructive fraud and breach of the duty of good faith and fair dealing. Constructive fraud (breach of fiduciary duty) and the duty of good faith and fair dealing can arise only in special contractual or agency relationships between parties. See In re Bass, 113 S.W.3d 735, 743 (Tex. 2003); Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 225 (Tex. 2002). The bank's motion for summary judgment argued, among other things, that the facts alleged by Rose did not constitute such a special relationship as a matter of law.
Rose has not complained of being denied an opportunity to replead in this regard.
The only facts asserted by these portions of Rose's brief, and supported by his summary judgment evidence to establish a special relationship, were that: (1) Rose and the loan officer had known each other, and kept in contact, since high school; (2) the loan officer stated in his deposition that he believed Rose trusted him and that he trusted Rose; and (3) the bank had provided financial services and advice to Rose and Micro Support for several months prior to the subject loan. However, Rose cites no authority even remotely suggesting that such facts could give rise to the type of special relationship required for constructive fraud or a duty of good faith and fair dealing. Accordingly, his third and fourth issues afford no basis for relief and are overruled.
Deceptive Trade Practices
The bank moved for summary judgment against Rose's counterclaim and affirmative defense based on violation of the Deceptive Trade Practices Act ("DTPA") on the ground that he was not a "consumer" because the loan and guarantee transaction was not a purchase or lease of goods or services. Rose's fifth issue challenges this part of the summary judgment on the ground that he was a consumer because he was seeking a service from the bank in the form of advice regarding how to secure a loan for his employer, the borrower.
See TEX. BUS. COM. CODE ANN. §§ 17.41-.63 (Vernon 2002 Supp. 2004-2005).
See id. § 17.45(4).
To recover under the DTPA, a claimant must prove that he was a consumer of purchased or leased goods or services that form the basis of his complaint. Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 676 (Tex. 1998). Because the lending of money is neither a good nor a service for this purpose, a person who seeks only to borrow money is not a consumer under the DTPA. La Sara Grain Co. v. First Nat'l Bank, 673 S.W.2d 558, 566 (Tex. 1984). However, if a borrower's objective for a loan is the purchase or lease of a good or service, then he is a consumer for purposes of the DTPA, and the lender can be sued for a DTPA violation. Id. at 566-67. In this case, Rose offered no evidence that he had any objective in making the loan other than to borrow money. Accordingly, his fifth issue is without merit and overruled.
Modification and Discharge
Rose's sixth issue challenges the summary judgment against his affirmative defense of discharge on the ground that the guaranty executed by him was to secure only an interest-free note, and the bank's subsequent substitution of a 10% interest rate note was a material modification of the debt that discharged Rose's guaranty obligation. However, it is undisputed that, under the plain language of the guaranty, Rose unconditionally guaranteed all present and future indebtedness of Micro Support to the bank without limitation. Rose has not provided legal authority or reasoning to demonstrate that a change in the indebtedness underlying such a guaranty (whether as to principal amount, interest rate, or other terms) can amount to a material alteration of the guaranty, in that the guaranty is already unlimited in scope and expressly contemplates the possibility of varying amounts of indebtedness over time. Because Rose's sixth issue thus fails to show that he raised a fact issue on each element of this affirmative defense, it is overruled.
Defective Jurats
Rose's final issue challenges the trial court's implicit overruling of his objections to two of the bank's summary judgment affidavits as containing only acknowledgments and not jurats. Rose contends that these acknowledgments were inadequate to make the affidavits effective because the acknowledgments did not state that the affidavits were "subscribed to and sworn to" the notary before whom they were executed.
"Affidavit" means a written statement of fact signed by the party making it, sworn to before an officer authorized to administer oaths, and officially certified to by the officer under his seal of office. See Tex. Gov't Code Ann. § 312.011(1) (Vernon 1998). Ford Motor Co. v. Leggat, 904 S.W.2d 643, 645-46 (Tex. 1995). By contrast, an acknowledgment merely recites that the instrument was executed in person before the officer notarizing it (so as to verify the authenticity of execution), but does not purport to certify that the signing party swore to the truth of the matters set out therein. See TEX. CIV. PRAC. REM. CODE ANN. § 121.006(b)(1) (Vernon 1997); Perkins v. Crittenden, 462 S.W.2d 565, 567 (Tex. 1970). However, an affidavit containing only an acknowledgment is nevertheless effective if it states that the signing party appeared before the officer, was first duly sworn, and on his oath, stated what follows. Leggat, 904 S.W.2d at 645-46.
In this case, although each of the challenged affidavits concludes with only an acknowledgment by a notary, each begins, "BEFORE ME, the undersigned authority, personally appeared . . ., who, after being by me duly sworn, upon [his/her] oath stated as follows." Because the affidavits thus unequivocally reflect that the witness not only signed the affidavit, but also swore under oath to the truth of the matters stated, Rose's challenge to the affidavits is without merit. Accordingly, his seventh issue is overruled, and the judgment of the trial court is affirmed.