Summary
reversing summary judgment for creditor where creditor presented the cardholder agreement but important portions of the agreement were illegible, including a section entitled "Finance Charges," and creditor presented no evidence regarding the calculations it used to arrive at claimed outstanding balance
Summary of this case from Uribe v. Pharia, L.L.C.Opinion
No. 01-10-00481-CV
Opinion issued August 25, 2011.
On Appeal from the County Court At Law No. 2 Fort Bend County, Texas, Trial Court Case No. 09-CCV-039967.
Panel consists of Justices JENNINGS, HIGLEY, and BROWN.
MEMORANDUM OPINION
Appellant, Ezekiel Wande, challenges the trial court's rendition of summary judgment in favor of appellee, Pharia, L.L.C., in its suit against Wande for breach of contract relating to a credit card debt. In six issues, Wande contends that the trial court erred in granting summary judgment in favor of Pharia, overruling his objections to Pharia's summary-judgment evidence, and not granting his no-evidence motion for summary-judgment.
We reverse and remand.
Background
In its original petition, Pharia alleged that it, or its predecessors in interest, and Wande had entered into a binding loan contract, which involved the application for and issuance of loans to Wande pursuant to a credit card issued by Citibank South Dakota, N.A. ("Citibank"), with an account number ending in the numbers "6841." Pharia sought damages of $24,418,82 for Wande's failure to make his credit card payments. Wande answered, generally denying Pharia's claims and asserting that he had "never had an open account with [Pharia] or [Pharia's] predecessor." Wande also asserted counterclaims against Pharia for violations of federal and state statutes concerning debt collection practices.
Pharia then moved for summary judgment, asserting that it is the "current owner of the account" after having purchased it from "Unifund"; Wande had "purchased goods and services by borrowing money" on the account and "breached the agreement for the extension of credit when [he] failed to make payments on the account when due"; Pharia had sent Wande a demand letter "requesting payment on the account on April 1, 2009"; and Wande "refused to pay" and "breached the agreement to pay this indebtedness," which was "past due and fully payable." Pharia further asserted that its summary-judgment evidence established that Wande had accepted and used the credit card, the issuance of the credit card to Wande constituted an "offer," Wande's use of the credit card constituted an "acceptance," and Wande owed it a total of $24,818.82.
Pharia attached to its summary-judgment motion the business records affidavit of Holly Chaffin, a custodian of records for Pharia. Attached to Chaffin's affidavit were 100 pages of documents, including the affidavit of Kathryn Halpin, an authorized representative of Unifund CCR Partners ("UCCR"); a "Bill of Sale, Assignment and Assumption Agreement" between Citibank and Unifund Portfolio A, L.L.C. ("UPA"); an "Authorization for Assignment of Accounts" between UPA and UCCR; a "Bill of Sale" between UCCR and Pharia; a photocopy of a 2001 Citibank Card Agreement; and monthly statements reflecting the charges incurred on the account.
Wande filed with the trial court written objections and a motion to strike the affidavits of Chaffin and Halpin, the 2001 Citibank Card Agreement, and the bill of sale. He subsequently filed his no-evidence motion for summary judgment, asserting that Pharia had presented no evidence of the following elements of a breach of contract claim: (1) the existence of a valid contract, (2) delivery of the alleged contract by Pharia to Wande, (3) performance or tendered performance of the contract by Pharia or its assignor, (4) breach of any contract by Wande, and (5) damages. Wande also moved for summary judgment, asserting that he was entitled to judgment as a matter of law on his counterclaims. Wande attached to this motion his affidavit, in which he testified, in pertinent part, as follows:
I have personal knowledge of all facts because the Citibank account which was the account on which this lawsuit is based was my account.
Citibank opened a credit card charge account for me, Account Number ending in 6841. This account was used exclusively for personal, family and/or household purposes. Citibank never sold any goods or services to me.
Citibank sent periodic statements to me, reflecting extensions of credit. These statements that I received from Citibank included finance charges on every statement, and occasionally there would be late fees.
I have never had any contract or account with Pharia L.L.C. Pharia L.L.C. has never loaned money to me or extended credit to me. I have never purchased anything from Pharia L.L.C. or from Citibank.
To its response to Wande's summary-judgment motions, Pharia attached the affidavit of Halpin, the "Authorization for Assignment of Accounts" from UPA to UCCR, the Bill of Sale between Citibank and UPA, and the Bill of Sale from UCCR to Pharia.
Wande then filed written objections and a motion to strike the evidence that Pharia had attached to its response. He objected to Halpin's affidavit testimony on the grounds that it constituted hearsay and parol evidence, was not the "best evidence," and it was conclusory. Wande objected to the "Authorization for Assignment of Accounts" from UPA to UCCR on the ground that it "is not an assignment[,] it only references assignments to be made in the future." After it struck much of the evidence about which Wande had complained, the trial court granted Pharia's summary-judgment motion.
Standard of Review
To prevail on a summary-judgment motion, a movant has the burden of proving that it is entitled to judgment as a matter of law and there is no genuine issue of material fact. TEX. R. CIV. P. 166a(c); Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995). When a plaintiff moves for summary judgment on its claim, it must establish its right to summary judgment by conclusively proving all the elements of its cause of action as a matter of law. Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); Anglo-Dutch Petroleum Int'l, Inc. v. Haskell, 193 S.W.3d 87, 95 (Tex. App.-Houston [1st Dist.] 2006, pet. denied). When deciding whether there is a disputed, material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). Every reasonable inference must be indulged in favor of the non-movant and any doubts must be resolved in its favor. Id. at 549.
When a party moves for summary judgment on the ground that there is no evidence of one or more essential elements of the non-movant's claims, the movant must specifically state the elements of the non-movant's claims as to which there is no evidence. TEX. R. CIV. P. 166a(i); Spradlin v. State, 100 S.W.3d 372, 377 (Tex. App.-Houston [1st Dist.] 2002, no pet.). The burden then shifts to the non-movant to produce evidence that raises a fact issue on the challenged elements. Spradlin, 100 S.W.3d at 377. "The court must grant the motion unless the respondent produces summary judgment evidence raising a genuine issue of material fact." TEX. R. CIV. P. 166a(i).
When, as here, both parties move for summary judgment, the appealing party may challenge the denial of its own motion as well as the judgment in favor of the prevailing party. CU Lloyd's v. Feldman, 977 S.W.2d 568, 569 (Tex. 1998); Spradlin v. State, 100 S.W.3d 372, 377 (Tex. App.-Houston [1st Dist.] 2002, no pet.). Each party must carry its own burden, however, both as movant and in response to the other party's motion, as non-movant. Id.; James v. Hitchcock Indep. Sch. Dist., 742 S.W.2d 701, 703 (Tex. App.-Houston [1st Dist.] 1987, writ denied).
Breach of Contract
In his third and fourth issues, Wande argues that the trial court erred in granting summary judgment for Pharia "because there is no evidence or insufficient evidence that there was any agreement between Wande and the original creditor on any terms and conditions of a contract" and there is no evidence "proving how" Pharia's "damages were calculated and how Pharia arrived at the debt balance" awarded by the trial court. Wande asserts that "it is clear that the alleged" cardholder agreement dated "2001" is not the cardholder agreement on which Citibank and Wande had agreed when his account was opened in January, 2002. Wande thus concludes that the cardholder "agreement dated 2002 must [contain] modifications" of the original contract. He asserts that "we do not know the terms of the original contract and whether it allowed for unilateral modification" and Pharia did not prove that the original contract allowed for unilateral modifications.
There is no "2002" agreement in the record, and we construe Wande's statement as a reference to the 2001 agreement that he is disputing.
Parties form a binding contract when the following elements are present: (1) an offer, (2) an acceptance in strict compliance with the terms of the offer, (3) a meeting of the minds, (4) each party's mutual consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding. Prime Products, Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.-Houston [1st Dist.] 2002, pet. denied). To be enforceable, a contract must be sufficiently certain to enable a court to determine the rights and responsibilities of the parties. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). To be entitled to summary judgment on its breach of contract claim, Pharia was required to prove, as a matter of law, the following essential elements: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by Wande; and (4) damages sustained as a result of the breach. See Winchek v. Am. Ex. Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.-Houston [1st Dist.] 2007, no pet.).
Pharia offered the following evidence to prove the existence of an enforceable contract: (1) the affidavits of Chaffin and Halpin, much of which were struck by the trial court; (2) a "Bill of Sale, Assignment and Assumption Agreement" between Citibank and UPA; (3) an "Authorization for Assignment of Accounts From [UPA] to [UCCR]"; (4) a Bill of Sale from UCCR to Pharia; (5) billing statements mailed to Wande between July 2004 and July 2006 reflecting widely varying interest rates; and (6) a 2001 "Citibank Card Agreement."
In Williams v. Unifund CCR Partners, this Court held that a creditor failed to establish the existence of a valid contract because the creditor did not produce the actual agreement or any other document that established the agreed upon terms, including the applicable interest rate or method for determining the applicability and amount of finance charges. 264 S.W.3d 231, 236 (Tex. App.-Houston [1st Dist.] 2008, no pet.). This Court noted that the interest rate and other information reflected in the statements were inconsistent and there was no indication of an agreement reached as to interest. Id. We further noted that there was no evidence on how the creditor calculated the interest rates and finance charges that allegedly increased the debtor's account balance from the $7,895.00 that he owed as reflected by a June 2002 statement and the $14,153.90 the creditor claimed in its lawsuit. Id. In sum, we determined that although the creditor's summary judgment evidence might have shown that "the parties had reached an agreement of some kind," the evidence was "not sufficient to establish the terms of a valid contract as a matter of law" and did not support the trial court's award of over of $14,153.90 plus interest. Id.
In contrast, in Winchek, we held that a creditor met its summary judgment burden to establish both the existence of a contract and the outstanding amounts owed by the debtor. 232 S.W.3d at 204-05. We noted that the creditor had introduced into evidence a copy of its "Personal Card Member Agreement," its billing statements, and an affidavit from its manager of credit operations. Id. at 202-03. We further noted that the agreement and summary-judgment evidence reflected the late fees, minimum payments under a deferred billing feature, and the method for calculating finance charges. Id. at 203, 205. We also emphasized that the agreement and monthly statements "provided detailed explanations" of the "cost of credit" and "the computation of the interest rate as applied to her account." Id. at 205.
In the instant case, Pharia presented the 2001 cardholder agreement, which provided that it was "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." The agreement also stated:
This Agreement and the card carrier are your Citibank Card Agreement. The card carrier contains important account information including the annual percentage rate and the amount of any membership fee. Please read and keep both the card carrier and this Agreement for your records. 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.
The agreement also noted, "We can change this Agreement including all fees and the annual percentage rate at any time." And it defined "Annual Percentage Rate for Purchases" as follows:
Your annual percentage rate for purchases and the corresponding daily periodic rate appear on the card carrier. A daily periodic rate is the applicable percentage rate divided by 365. Whether or not the annual percentage rate for purchases is based on the US Prime Rate plus a margin is indicated on the card carrier.
Here, as in Williams, the evidence may be sufficient to show that "the parties had reached an agreement of some kind." See Williams, 264 S.W.3d at 236. But, important portions of the agreement that Pharia presented into evidence are illegible, including a section entitled "Finance Charges." The summary judgment record also does not include the "card carrier" document to which the agreement expressly refers. Moreover, there is no affidavit testimony explaining if terms of the agreement supported the claimed outstanding balance, nor is there any affidavit testimony or evidence setting forth the calculations used by Pharia to arrive at its claimed outstanding balance, which differs significantly from the maximum outstanding amounts reflected in the monthly statements. Pharia does not direct us to any documents in the record supporting the entire claimed amounts.
For example, although Pharia presented some evidence of how the interest rates were calculated based upon the cardholder agreement, and although Pharia included Wande's monthly billing statements reflecting an outstanding balance of $13,220.41 in July 2006, Pharia did not present evidence, and certainly not conclusive evidence, supporting the assessment of finance charges or the increase in the balance from $13,220.41 to $24,418.82.
In sum, although there is some evidence of an agreement and that Wande may owe outstanding amounts under this agreement, Pharia did not present evidence conclusively establishing the amounts that it claimed it was owed and that the trial court awarded in its summary judgment. See Nice v. Dodeka, L.L.C., No. 09-10-00014-CV, 2010 WL 4514174, at *6 (Tex. App.-Beaumont Nov. 10, 2010, no pet.) (mem. op.) (reversing summary judgment entered in favor of creditor because entire amount of credit card balance awarded by trial court was not supported by summary judgment evidence, and remanding for further proceedings). Accordingly, we hold that the trial court erred in granting summary-judgment in favor of Pharia.
We sustain Wande's third and fourth issues.
Having sustained Wande's third and fourth issues, we need not directly address his first and fifth issues in which he argues that the trial court erred in granting summary judgment for Pharia because there is no evidence or insufficient evidence that Pharia owns Wande's account. We also need not address his second issue, in which he argues that the trial court erred in overruling his "objections to the alleged cardmember agreements profferred" by Pharia.
No-Evidence Summary Judgment
In his sixth issue, Wande argues that the trial court erred in not granting his no-evidence motion for summary-judgment because Pharia failed to present evidence that it owns Wande's account, of the existence of an enforceable contract, and how it "calculated its damages."
Ownership of Wande's Account
Wande argues that there is no evidence that Pharia owns the cardholder account because the trial court, in large part, struck the affidavit testimony of Chafin and Halpin and there are gaps in the chain of the title of the cardholder account. He asserts that the "Authorization for Assignment" from UPA to UCCR is not an assignment and there is no exhibit identifying any account assigned by UCCR to Pharia.
We note that the trial court did not attempt to strike Chafin's affidavit testimony in its entirety, and it did not strike the exhibits attached to her business record affidavit. And the Authorization for Assignment expressly identifies itself as an assignment: "THIS ASSIGNMENT is effective as of July 6, 2001, between UNIFUND PORTFOLIO A, LLC . . . and UNIFUND CCR PARTNERS[.]" The Authorization for an Assignment is accompanied by a line item listing Wande's cardholder account. Wande argues that this is not an assignment because it only "references assignments to be made in the future." However, this Court has recently addressed this exact argument and held such an "Authorization for Assignment" to be sufficient to establish UPA's intent to assign Wande's account to UCCR. See Wood v. Pharia L.L.C., No. 01-10-00579-CV, 2010 WL 5060621, at *6 (Tex. App.-Houston [1st Dist.] Dec. 6, 2010, no pet.) (mem. op.).
In Wood, the "Authorization for Assignment" was identical to the one at issue in the instant case, and we concluded that "taking the contract as a whole, the title of the instrument, the above-quoted language, and the express inclusion of Wood's account all indicate that the intent of the Authorization for Assignment was to assign Wood's account from [UPA] to [UCCR]." Id. Thus, the Authorization for Assignment in this case constitutes evidence that UPA assigned Wande's account to UCCR. See id.
In regard to his assertion that there is a gap in the chain of title of the cardholder account, Wande complains that there is no exhibit identifying any account assigned by UCCR to Pharia. He notes that he objected to the Bill of Sale from UCCR to Pharia because "nowhere is Wande or Wande's alleged account referenced in the alleged Bill of Sale." A review of the record reveals that the Bill of Sale does not reference Wande's account. However, in its response to Wande's no-evidence summary-judgment motion, Pharia included the Bill of Sale with an attachment indicating that Wande's account was among those transferred to Pharia. When parties file cross motions for summary judgment, we review the evidence submitted in all of the motions. Comm'rs Court of Titus Cnty v. Agan, 940 S.W.2d 77, 81 (Tex. 1997). Thus, Pharia did present some evidence that Wande's account was among the accounts transferred to Pharia. Accordingly, we conclude that Pharia did present some evidence to establish its ownership of Wande's account.
Existence of a Contract
Wande next asserts that Pharia failed to present evidence of the existence of a valid, enforceable contract. Pharia attached to its response to Wande's summary-judgment motion, the 2001 cardholder agreement, and copies of Wande's monthly credit card statements. The Agreement provided, in pertinent part, "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." The Agreement also stated that the card carrier includes "important account information including the annual percentage rate and the amount of any membership fee." Furthermore, the record includes copies of Wande's monthly statements, reflecting that a specific card and account number were issued to Wande and he used the card to charge various goods and services each month. Although Wande disputes whether or not this 2001 cardholder agreement is the agreement in effect at the time that he opened the account, we conclude that Pharia presented some evidence of the existence of a valid contract.
Damages
Finally, Wande asserts that Pharia "presented no evidence on how it calculated its damages." However, as part of its summary-judgment evidence, Pharia included copies of Wande's monthly credit card statements which reflect the amounts owed. We conclude that, although the summary-judgment evidence does not support the entire amount awarded by the trial court, the monthly credit card statements and other evidence reflecting outstanding amounts owed by Wande on his account constitute some evidence of damages.
Accordingly, we hold that the trial court did not err in denying Wande's no-evidence motion for summary judgment.
Conclusion
We reverse the trial court's judgment and remand the cause for further proceedings.