Opinion
No. 05-04-00477-CV
Opinion Filed June 28, 2005.
On Appeal from the County Court at Law No. 4, Dallas County, Texas, Trial Court Cause No. cc-03-09048-D.
Affirm in part, Reverse and Remand in part.
Before Justices WRIGHT, MOSELEY, and LANG.
MEMORANDUM OPINION
George A. Boyce appeals the take-nothing summary judgment granted in favor of Merrill, Lynch, Pierce, Fenner Smith, Inc. and Monica Smith a/k/a Monica Krajca. In four issues, Boyce contends the trial court erred by granting (1) appellees' traditional motion for summary judgment on the affirmative defenses of limitations and laches, (2) appellees' no-evidence motion on appellant's claims for breach of contract, conversion, and money had and received, and (3) granting more relief than requested because appellees did not move for summary judgment on his claims for breach of fiduciary duty, constructive trust, and an accounting. We sustain appellant's issues, affirm in part and reverse in part the trial court's judgment, and remand for further proceedings consistent with this opinion.
Before turning to the merits of appellant's complaints, we first note some procedural facts relevant to our analysis and disposition of this case. In appellees' motion for summary judgment, one ground asserted by appellees is that Smith is entitled to summary judgment on all of appellant's claims because she signed the check in the scope of her employment with Merrill Lynch and, therefore, is not individually liable to appellant. Appellant does not address this portion of appellees' motion for summary judgment in his brief and has thus failed to meet his burden to establish the trial court's judgment was erroneous with respect to his claims against Smith. Because summary judgment may have been granted, properly or improperly, with respect to Smith on the ground that she is not individually liable, we affirm the trial court's judgment with respect to appellant's claims against Smith. See Holloway v. Starnes, 840 S.W.2d 14, 23 (Tex.App.-Dallas 1992, writ denied). We now turn to the propriety of the summary judgment with respect to Merrill Lynch.
Merrill Lynch's motion for summary judgment rested on both traditional and no-evidence grounds. The traditional motion for summary judgment asserted the affirmative defenses of limitations and laches. The no-evidence portion of the summary judgment motion challenged appellant's causes of action for breach of contract, conversion, and money had and received. With respect to its traditional motion for summary judgment, Merrill Lynch had the burden to demonstrate no genuine issues of material fact existed and that it was entitled to judgment as a matter of law. See Nixon v. Mr. Prop. Mgmt, Co., 690 S.W.2d 546, 548-49 (Tex. 1985). The no-evidence summary judgment, however, required appellant to present sufficient evidence to raise a genuine issue of fact on each of his challenged claims. See Gen. Mills Rest. v. Texas Wings, Inc., 12 S.W.3d 827, 832-33 (Tex.App.-Dallas 2000, no pet.). Because the trial court granted summary judgment without specifying the grounds on which it was based, appellant must establish that each summary judgment ground alleged by Merrill Lynch was insufficient to support the trial court's judgment. See Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995). In his first issue, appellant contends the trial court erred by granting summary judgment on the affirmative defense of limitations. As the movant, Merrill Lynch had the burden to conclusively establish when the causes of action accrued and that the discovery rule did not apply. Burns v. Thomas, 786 S.W.2d 266, 267 (Tex. 1990). Unless the movant conclusively establishes each element of the affirmative defense, the non-movant plaintiff has no burden in response to defendant's motion. Torres v. Western Casualty Sur., 457 S.W.2d 50, 52 (Tex. 1970).
In its motion, Merrill Lynch maintained appellant's claims are barred by the ten-year statute of limitations in section 3.118(c) of the Texas Commerce and Business Code, because the check upon which appellant bases his claims is dated June 29, 1976 and appellant did not commence his action until July 30, 2003. Appellant responded that limitations does not bar his claims because he is not, as suggested by Merrill Lynch, seeking to recover on the check, but rather he is attempting to locate and recover money from an account he never closed with Merrill Lynch. We agree with appellant.
Section 3.118(c) provides that an action to enforce the obligation of a party to an unaccepted draft to pay the draft must be commenced within three years after dishonor of the draft or ten years after the date of the draft, whichever period expires first. Tex. Bus. Com. Code Ann. § 3.118(c) (Vernon 2002).
In response to Merrill Lynch's motion, appellant introduced, among other things, his affidavit. In his affidavit, appellant testified that in the early 1970's, he opened a brokerage account with Merrill Lynch. The account number was 544 53220. Account number 544 53220 is the only account appellant has had with Merrill Lynch, and he has never closed the account. Merrill Lynch never notified him that his account had been deemed abandoned and his understanding was that he could leave money in the account for as long as he wanted. In 1976, appellant sold some securities and Merrill Lynch sent him a check from account 544 53220 in the amount of $44,409.50. Appellant claims he never requested the check and he thought from prior dealings the money would remain in his account until he requested the money. Appellant recently found the check while cleaning out his desk. Discovering the check reminded him about the account. Appellant never cashed, deposited, or endorsed the check and he has never received a replacement check. According to appellant, he has never received payment from Merrill Lynch for the $44,409.50 for the sale of securities. Thus, the non-negotiated check is some evidence that money remains in his account at Merrill Lynch and he sought to recover the money from his account. However, appellant has not attempted to enforce Merrill Lynch's obligation on the check. Because appellant is not attempting to enforce the check, but is attempting to obtain money he claims remains in an account with Merrill Lynch, section 3.118(c) is not applicable. Consequently, limitations will not support the summary judgment in this case. We sustain appellant's first issue.
Although Merrill Lynch contends appellant's affidavit was stricken, we disagree. Merrill Lynch objected to appellant's affidavit supporting his motion for summary judgment filed on February 19, 2004. The trial court sustained those objections and struck the affidavit. However, our record contains a second affidavit, filed in support of appellant's response to appellees' motion for summary judgment. The record does not contain either objections or a ruling with respect to this affidavit. Thus, we will consider the affidavit in our review of the summary judgment evidence.
To the extent Merrill Lynch argues appellant's claims are barred by any Texas statute of limitations, i.e., the specific limitations periods applicable to appellant's causes of action, Merrill Lynch did not raise that argument in its motion for summary judgment. Thus, we do not consider it on appeal. See Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 625 (Tex. 1996) (appellate court may review only issues actually presented to trial court).
In his second issue, appellant contends the trial court erred by granting Merrill Lynch's motion for summary judgment on the basis of the affirmative defense of laches. According to Merrill Lynch, appellant had legal and/or equitable rights as of June 29, 1976, the date of the check; and appellant's delay in asserting those rights has led to the unavailability of witnesses, the loss or destruction of records, and has disadvantaged Merrill Lynch's ability to establish defenses. As movant on the affirmative defense of laches, Merrill Lynch was required to conclusively establish (1) appellant's unreasonable delay in asserting a legal or equitable right, and (2) a good faith change of position by appellees, to their detriment, in reliance on appellant's delay. Stephens v. Dolcefino, 126 S.W.3d 120, 129 (Tex.App.-Houston [1st Dist.] 2003, pet. filed) (op. on reh'g). To meet this burden, Merrill Lynch relied on the affidavit testimony of Don Drury, a Service Manager Assistant Vice-President for Merrill Lynch. In his affidavit, Drury testified that Merrill Lynch was unable to locate records regarding appellant's account and that documents, if any, pertinent to appellant's claims would have been destroyed over the last twenty-seven years. This evidence is insufficient to conclusively establish a good faith change of position by Merrill Lynch, to its detriment, in reliance on appellant's delay. See id. (affidavit testimony that defendants are prejudiced because of faded memories and the inability to collect all evidence necessary to defend the claims asserted insufficient to establish burden of showing good faith change of position); McBride v. McBride, 797 S.W.2d 689, 693 (Tex.App.-Houston [14th Dist.] 1990, writ denied) (failure to maintain financial records insufficient to meet burden of showing good faith change of position). Because Merrill Lynch failed to meet its burden as movant to conclusively establish the affirmative defense of laches, that defense will not support the summary judgment in this case. We sustain appellant's second issue.
In his third issue, appellant contends the trial court erred by granting the no-evidence summary judgment on his claims for breach of contract, conversion, and money had and received. In its motion, Merrill Lynch claimed appellant had no evidence (1) of a contract between the parties, (2) that Merrill Lynch had assumed control over appellant's personal property because there is no evidence of an account with Merrill Lynch nor evidence of unauthorized or unlawful exercise of dominion or control by Merrill Lynch, or (3) that Merrill Lynch has money that in equity and good conscience belongs to appellant. In response, appellant relied on his affidavit testimony detailed in our discussion of issue one. In sum, appellant testified that he had an account with Merrill Lynch, opened in the 1970's and never closed, from which a check in the amount of $44,409.50 had been issued but never negotiated or replaced. Appellant also relied on the affidavit of Jackie Leveridge, the Head Operations Controller for Merrill Lynch. In her affidavit, Leveridge explained that a check outstanding for nine months is considered "stale dated." When a check is considered stale dated and the amount is for ten dollars or more, the Merrill Lynch policy is to stop payment on the check and recredit the account. The summary judgment evidence also contains a letter from Lori Ashton, a senior client service specialist for Merrill Lynch. In her letter, Ashton informed appellant that if an account holding assets is abandoned by the client, and Merrill Lynch is unable to contact the client, the account is transferred to the Abandoned Property Department. Eventually, the account would be escheated to the State. Merrill Lynch, however, has no record of appellant's account reaching abandoned status.
Viewed under the appropriate standard, this evidence constitutes more than a scintilla of evidence (1) of a contract between the parties, (2) of an unauthorized or unlawful exercise of dominion or control over appellant's money by Merrill Lynch, and (3) that Merrill Lynch has money that in equity and good conscience belongs to appellant. Because the summary judgment record contains sufficient evidence to raise a genuine issue of material fact on each of the elements challenged by Merrill Lynch in its motion for summary judgment, the no-evidence portion of Merrill Lynch's motion will not support the summary judgment in this case. We sustain appellant's third issue.
In his fourth issue, appellant contends the trial court erred by granting summary judgment on his claims for breach of fiduciary duty, constructive trust, and an accounting because Merrill Lynch did not raise these issues in its motion for summary judgment. Our review of the record shows that Merrill Lynch did not address breach of fiduciary duty, constructive trust, or an accounting. When, as here, the trial court grants more relief than requested in a motion for summary judgment, we must reverse and remand those issues after addressing the merits of the properly addressed claims. See Gen. Mills Rest., 12 S.W.3d at 836. We sustain appellant's fourth issue.
Accordingly, we affirm the trial court's summary judgment with respect to appellant's claims against Smith, reverse the trial court's summary judgment with respect to appellant's claims against Merrill Lynch, and remand for further proceedings consistent with this opinion.