Opinion
No. 04-07-00254-CV
Delivered and Filed: March 5, 2008.
Appeal from the County Court at Law Number 1, Guadalupe County, Texas, Trial Court No. 2006-CV-0562, Honorable Linda Z. Jones, Judge Presiding.
Sitting: KAREN ANGELINI, Justice, REBECCA SIMMONS Justice, STEVEN C. HILBIG, Justice.
MEMORANDUM OPINION
Mike Ariza appeals the trial court's judgment awarding Mary Long $2,650.00 after a de novo appeal from the justice of the peace court. We reverse and render.
Factual and Procedural Background
After Mary Long and Mike Ariza developed a personal relationship, Long began living with Ariza in his recreational vehicle. Ariza allowed Long to store many of her personal and household belongings in a self-service storage facility Ariza had previously rented. When the relationship soured a few months later, Long moved out and left Ariza a letter that stated in part:
I want you to add up everything that you have spent on me including: Truck payment, Insurance, doctor appointments, medication, food, gas for my truck and the 1,850 that I already owe you. I understand if you cancel my tanning, but if you don't, I will get you $35 each month to you. . . . I will not get anything out of the store room unless you are there or you give me verbal permission. If you want to keep it for collateral then I understand and accept that.
The same evening, Ariza visited Long and got the key to the storage unit from her.
When Ariza later refused to allow Long to retrieve some of her belongings from the storage unit, Long filed suit in justice court, seeking a money judgment or return of her property, alleged to be valued at $4,500.00. Long's "statement of claim" listed the property as including a fifty-two inch television, a washer and dryer, a king size mattress and box springs, a water bed frame, a VCR, books, papers, and other miscellaneous items. Ariza answered and filed a counterclaim, asserting that Long owed him approximately $4,000; that Long had pledged her property to him as collateral for the loans; and that Long had defaulted on the loans. Ariza prayed for judgment on the debt plus the cost of storage, attorney's fees, and costs of court.
The justice of the peace rendered judgment for Long in the amount of $4,500 with interest and costs of court. The judgment stated that "[i]n lieu of the $4,500.00 defendant can return all belongings to Plaintiff Mary Long." Ariza appealed to the county court at law for a trial de novo. After hearing the evidence and taking judicial notice of the record and exhibits from the justice court, the trial court rendered judgment for Long in the amount of $2,650.00 with interest at the rate of 8.25% and costs of court. In response to Ariza's request, the trial court entered findings of fact and conclusions of law as follows:
The Court FINDS that the Defendant possessed certain personal property belonging to the Plaintiff. The property included a Big Screen T.V. and other furniture items.
The Court FINDS that the value of the property was approximately $4,500.00.
The Court FINDS that the Plaintiff owed the amount of $1,850.00 to the Defendant.
Conclusions of Law: After consideration of all the relevant factors, the Court FINDS and AWARDS a Judgment to the Plaintiff in the amount of $2,650.00 which is the amount of $4,500.00 less $1,850.00, with interest thereon at the rate of 8.25% per annum, together with cost [sic] in this behalf expended . . .
Neither party requested additional findings of fact. Ariza timely appealed to this court.
Discussion Long's Claim
In his first three issues, Ariza argues there is legally and factually insufficient evidence to support a judgment for Long on a cause of action for either debt or conversion and argues the evidence conclusively established his possession of the property was not wrongful. We agree.
Long did not present any evidence of a debt owed to her by Ariza, nor does she argue Ariza is liable to her for debt. Instead, Long pursued a cause of action for conversion, contending that Ariza wrongfully refused to return her property. And, as reflected by the trial court's findings, the judgment for Long was based on conversion. Conversion is "[t]he unauthorized and wrongful assumption and exercise of dominion and control over the personal property of another, to the exclusion of or inconsistent with the owner's rights." Waisath v. Lack's Stores, Inc., 474 S.W.2d 444, 447 (Tex. 1971). To prove conversion, Long was required to establish: (1) she owned or legally possessed the property or was entitled to its possession; (2) Ariza unlawfully and without authorization assumed and exercised dominion and control over the property to the exclusion of or inconsistent with Long's ownership rights; (3) Long demanded the property's return; and (4) Ariza refused to return it. See Small v. Small, 216 S.W.3d 872, 877 (Tex.App.-Beaumont 2007, pet. denied). It is undisputed that Long owned the property, Ariza exercised dominion and control over the property to Long's exclusion, and that Ariza refused to return the property after Long asked for it. Thus the only disputed issue was whether Ariza's exercise of dominion and control over the property was unlawful and without authorization. Ariza contends the evidence conclusively established that his possession of the property was lawful because Long pledged the property as collateral for an unpaid debt.
At trial, Long admitted she wrote and signed the letter in which she told Ariza he could keep the property in the storage unit as collateral for the debt she owed him. By doing so, Long granted Ariza a security interest in the property. See Tex. Bus. Com. Code Ann. §§ 1.201(b)(35), 9.102(a)(74) (Vernon Supp. 2007); id. § 9.109(a)(1) (Vernon 2002); id. § 9.109 cmt. 2. The security interest attached and became enforceable against Long when Ariza agreed to allow her time to pay the debt and Long gave Ariza the key to his storage unit. See id. §§ 9.203, 9.313, 9.313 cmts. 2, 3 (Vernon Supp. 2007). Long argues her property was not pledged as collateral because that was not the intent of the parties when they put the property in the storage unit. However, Ariza does not contend the property was collateral when it was originally place in the storage unit. Rather, the property was pledged and Ariza's security interest in the property attached when Long agreed that Ariza's continued possession of the property was for the purpose of creating a security interest. See id. § 9.203 cmt. 4. There is no allegation that Ariza wrongfully exercised control over the property before that time.
Ariza's continued possession of the collateral while seeking a judgment on the debt does not make his possession wrongful. A secured creditor's remedies after default are cumulative. See id. § 9.601; Schmid v. Texas Commerce Bank-Fort Worth, N.A., 912 S.W.2d 845, 846 (Tex.App.-Fort Worth 1995, writ denied). Thus, Ariza may obtain a judgment for the debt and keep possession of the collateral, subject to the duties imposed by section 9.207 of the Business and Commerce Code, until the judgment is satisfied by execution, foreclosure on the collateral, or otherwise. See Schmid, 912 S.W.2d at 847; Tex. Bus. Com. Code Ann. §§ 9.207, 9.601 (Vernon Supp. 2007).
The secured party must use reasonable care in the custody and preservation of the collateral and, in the case of consumer goods, may only use or operate the collateral as permitted by court order or if necessary to preserve the collateral or its value. Tex. Bus. Com. Code Ann. § 9.207(a), (b)(4) (Vernon Supp. 2007).
Because the evidence establishes conclusively that Ariza's exercise of dominion and control over the property was lawful, we sustain his no evidence issues, reverse the judgment in favor of Long, and render judgment that she take nothing on her claim.
Ariza's Debt Claim
Ariza next complains "[t]he trial court erred as a matter of law in failing to recognize the additional loans/expense items incurred by [Ariza] on [Long's] behalf." We construe the issue as a legal sufficiency, or "matter of law," challenge to the trial court's finding that Long owed Ariza only $1,850.00.
When the party who had the burden of proof at trial attacks the legal sufficiency of an adverse finding, he must show that the evidence establishes, as a matter of law, all vital facts in support of the issue. Dow Chemical Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001) (per curiam). In our review, we first examine the record for evidence supporting the adverse finding, ignoring all evidence to the contrary. Id. If more than a scintilla of evidence supports the adverse finding, we overrule the issue. Id. If there is no evidence to support the finding, we examine the entire record to determine if the contrary proposition is established as a matter of law. Id. We will sustain the issue only if the contrary proposition is conclusively established. Id.
The trial court found Long was indebted to Ariza for $ 1,850.00, the amount outstanding on a loan that Long acknowledged in her letter and at trial. Ariza contends the trial court erred by failing to award him additional amounts for various expenses he incurred on Long's behalf and for the monthly storage unit fees. Ariza contends Long admitted in her letter that she owed him for amounts he spent for her truck payments, insurance, doctor's appointments, medication, food, and gas. Although the letter invited Ariza to calculate the amount he had spent on these items, no evidence was presented regarding the cost of Long's insurance, medication, food, or gas or who paid these expenses. Accordingly, the trial court did not err in failing to award any sums for these items.
With respect to truck payments, Ariza introduced two receipts, each reflecting $193.00 payments to Drive Time for customer Mary Long. When shown the receipts on cross-examination, Long testified Ariza did not make these payments. This is more than a scintilla of evidence to support the trial court's failure to find that Long was indebted to Ariza for these amounts. See Francis, 46 S.W.3d at 241. With respect to doctor bills, the only evidence in the record is Long's testimony that Ariza made two doctor's appointments for her and Ariza's acknowledgement that "there are two receipts for medical care for Ms. Long for $208 and $166." There is no evidence Ariza paid the bills. The trial court's failure to award any amounts for truck payments and doctor bills is therefore supported by the record.
Finally, Ariza contends the trial court erred by failing to award him the $49.00 per month cost of the storage unit where the collateral was stored. As a general matter, when the secured party has possession of the collateral, the debtor may be charged the reasonable expenses incurred to preserve the collateral. Tex. Bus. Com. Code Ann. § 9.207(b)(1). However, Ariza testified that he had separated from his wife, moved into the trailer, and put his own personal belongings in storage before he even met Long. When Long moved in with Ariza, the property that would later become collateral was put in the same storage unit. Ariza did not offer any evidence that he incurred any additional expense to store the collateral. Further, there is evidence Ariza ceased renting the storage unit at least two months before trial. We conclude Ariza failed to conclusively establish the amount of storage costs he incurred to preserve the collateral. Because the evidence is legally sufficient to support the trial court's finding that Long was indebted to Ariza for only $1,850.00, we overrule Ariza's fourth issue.
Ariza's Attorney's Fee Claim
In his last issue, Ariza contends the trial court erred by failing to award him attorney's fees pursuant to chapter 38 of the Texas Civil Practice and Remedies Code. In order to recover attorney's fees under chapter 38, the claimant must plead and prove that he presented his claim to the opposing party and that the amount owed was not tendered within thirty days of presentment. Tex. Civ. Prac. Rem. Code Ann. § 38.002 (Vernon 1997). The filing of suit, without more, does not constitute presentment of a claim. Llanes v. Davila, 133 S.W.3d 635, 641 (Tex.App.-Corpus Christi 2003, pet. denied); Carr v. Austin Forty, 744 S.W.2d 267, 271 (Tex.App.-Austin 1987, writ denied). Ariza did not plead presentment and offered no evidence of presentment. Therefore, Ariza is not entitled to recover attorney's fees. See Carr, 744 S.W.2d at 271.
Conclusion
For the reasons discussed above, we reverse the trial court's judgment and render judgment that Long take nothing by her claim and that Ariza recover $1,850.00 from Long, together with post-judgment interest at the statutory rate and costs incurred in the trial court. Because each party prevailed on significant issues on appeal, costs of this appeal are taxed against the party that incurred them. See Tex. R. App. P. 43.4.
Steven C. Hilbig, Justice