Opinion
No. 05-08-00398-CV
Opinion Filed May 5, 2009.
On Appeal from the County Court at Law No. 2 Dallas County, Texas, Trial Court Cause No. CC-07-10203-B.
Before Chief Justice THOMAS and Justices FRANCIS and LANG-MIERS.
MEMORANDUM OPINION
Appellants Prompt Professional Real Estate, Inc. and Esmael L. Modaberri appeal a summary judgment granted in favor of appellee RSC Equipment Rental, Inc. in its suit against appellants for the amount due under an equipment rental agreement and a guaranty agreement. We affirm the trial court's judgment.
Background
According to appellants' brief, Prompt Professional rented equipment from RSC from October 2006 to January 2007 "to help [Prompt Professional] build homes." Modaberri, Prompt Professional's president, guaranteed the rental contract between RSC and Prompt Professional. As of February 2007, Prompt Professional's account balance "was $19,138.70."
In July 2007, RSC filed a suit on account under Texas Rule of Civil Procedure 185 against Prompt Professional, seeking payment of $19,138.70 for past due invoices, plus interest and attorneys' fees. The affidavit of Daniel Rivera, senior credit analyst for RSC, is attached in support of the petition and states that (1) he has personal knowledge of the facts in the affidavit, (2) Prompt Professional owes RSC $19,138.70, and (3) "all just and lawful offsets, payments and credits have been allowed." Also attached to the petition are numerous invoices and a "Customer Invoice Summary" reflecting an outstanding balance of $19,138.70 on Prompt Professional's account. RSC also asserted a claim for recovery of that amount against Modaberri based on his guaranty agreement with RSC. In response, appellants filed a verified denial signed by Modaberri, in which they specifically denied "that the amount of the account is due to [RSC] and further denie[d] that all just and lawful offsets, payments, and credits have been allowed," and asserted four affirmative defenses: failure of consideration, fraudulent inducement, equitable estoppel, and offset.
In November 2007, RSC moved for traditional summary judgment under Texas Rule of Civil Procedure 166a(c). In that motion, RSC claimed that it was entitled to judgment as a matter of law on its account claim against Prompt Professional and its guaranty claim against Modaberri because the summary-judgment evidence established each element of those claims and demonstrated that there was no genuine issue as to any material fact. In support of the motion, RSC attached an affidavit signed by Rivera in which he attested that RSC is the proper "owner and holder" of the claim against Prompt Professional and that RSC presented its claim to appellants and sent a written demand for payment more than thirty days prior to filing the motion. In his affidavit, Rivera also "proved up" RSC's business records that were submitted as summary-judgment evidence, including a two-page "NEW ACCOUNT FORM CONTRACT." The first page of that contract is an agreement between RSC and Prompt Professional, signed by Modaberri on behalf of Prompt Professional, in which Prompt Professional agreed to pay invoices "upon receipt," agreed to pay a "service charge" on any delinquent invoices at the maximum rate allowed in Texas, and agreed to pay "all reasonable collection costs, including but not limited to attorney's fees" associated with collecting on any unpaid invoices. The second page of the contract is a personal guaranty signed by Modaberri, in which he personally guaranteed payment of RSC's invoices.
Appellants filed a response in opposition to RSC's motion for summary judgment, in which they argued that RSC did not meet its burden of demonstrating that there was no genuine issue of material fact and that it was entitled to judgment as a matter of law. They argued that the summary judgment evidence was conflicting and defective, that certain exhibits to the motion constituted hearsay, and generally alleged that the claims were barred by the affirmative defense of fraudulent inducement. Appellants did not submit any controverting summary-judgment evidence. After a hearing, the trial court granted RSC's motion.
Appellants filed a motion to reconsider on the ground that the evidence submitted in support of the motion "contained hearsay evidence and was not admissible under the rules of evidence." The trial court conducted a hearing on the motion to reconsider and denied that motion.
Issue on Appeal
In their sole issue on appeal, appellants argue that the trial court erred in granting summary judgment on RSC's suit on account because "conflicting statements contained in the summary judgment evidence raise[ ] a genuine issue of material fact of whether all lawful offsets, payments, and credits have been allowed to [Prompt Professional]."
Applicable Law and Standard of Review
In order to be entitled to summary judgment in a suit on account the movant must strictly adhere to the provisions outlined in the Texas Rules of Civil Procedure. PennWell Corp. v. Ken Assocs., Inc., 123 S.W.3d 756, 765 (Tex.App.-Houston [14 Dist.] 2003, pet. denied). Under rule 185, a plaintiff's petition in a suit on account must be supported by an affidavit stating that the facts of the claim are within the affiant's knowledge, the claim is "just and true," and "that all just and lawful offsets, payments and credits have been allowed." Tex. R. Civ. P. 185; PennWell Corp., 123 S.W.3d at 765. If a defendant files a sworn denial of the account as required by rule 185, the evidentiary presumption created by rule 185 is "destroyed" and the plaintiff is forced to put on proof of its claim. PennWell Corp., 123 S.W.3d at 765. If a defendant files a proper sworn denial of the account, a plaintiff can still be entitled to summary judgment in a suit on account if it files legal and competent summary-judgment evidence establishing the validity of its claim as a matter of law. Id. (citing United Bus. Machs. v. Entm't Mktg., Inc., 792 S.W.2d 262, 264 (Tex.App.-Houston [1st Dist.] 1990, no writ)).
Although it appears that this Court and the Texas Supreme Court have not addressed this issue, we note that some intermediate appellate courts have held that "suit on a sworn account is inapplicable when the underlying agreement resulting in the alleged debt was a lease agreement." AKIB Constr., Inc. v. Neff Rental, Inc., No. 14-07-00063-CV, 2008 WL 878935, at *2 (Tex.App. Apr. 3, 2008, no pet.) (mem. op.); see also Schorer v. Box Serv. Co., 927 S.W.2d 132, 134-35 (Tex.App. 1996, writ denied) (same); Murphy v. Cintas Corp., 923 S.W.2d 663, 665 (Tex.App. 1996, writ denied) (same); Murphy v. Budget Rent-A-Car Sys., Inc., No. 14-95-00099-CV, 1996 WL 275072, at *1 (Tex.App. May 23, 1996, no writ) (mem. op.) (not designated for publication) ("A lawsuit based on the breach of a lease agreement is not a suit on a sworn account because the parties have not conducted a purchase or sale of property whereby title to the property has passed from one party to the other."). At least one intermediate appellate court, however, has affirmed summary judgment on a sworn-account claim based on a lease agreement. Cespedes v. Am. Express-CA, No. 13-05-00385-CV, 2007 WL 1365441, at *1, 4-5 (Tex.App. May 10, 2007, no pet.) (mem. op.) (affirming summary judgment on sworn-account claim in which plaintiff alleged that defendants "owed it $25,042.51 for the lease of engraving equipment"). In this case, appellants state in their appellate brief that "[t]his is a suit on sworn account and suit on guaranty" and "[o]ur case is clearly a suit on account." They did not argue to the trial court, and do not argue on appeal, that the nature of the parties' agreement precludes a suit on account. Because this is not an issue on appeal, we will assume, without deciding, that a suit on account was an appropriate cause of action under the facts of this case. See, e.g., Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex. 1993) (per curiam) ("We have held repeatedly that the courts of appeals may not reverse the judgment of a trial court for a reason not raised in a point of error.").
We review a trial court's grant of a traditional summary judgment de novo. Provident Life Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). We do not consider evidence that favors the movant's position unless it is uncontroverted. Hasty v. Keller HCP Partners, L.P., 260 S.W.3d 666, 669 (Tex.App. 2008, no pet.). If the movant establishes a right to summary judgment, the burden shifts to the nonmovant to raise a genuine issue of material fact in order to defeat summary judgment. Id.
Analysis
Appellants argue that RSC did not meet its summary-judgment burden because its motion "does not state that `lawful offsets, payment, and credits have been made.'" But the Rivera affidavit attached to and expressly incorporated into the motion does contain that language; it states that "Prompt Professional is indebted to [RSC], after the allowance of all offsets, payments and credits, in the principal amount of $19,138.70." Additionally, appellants misstate the standard. After the evidentiary presumption created by rule 185 is "destroyed" by a sworn denial, a plaintiff seeking summary judgment in a suit on account is required to prove three elements: (1) the sale or delivery of goods, wares, or merchandise, (2) that the amount of the account is "just"-for example, the prices charged are pursuant to an express agreement, and (3) that the outstanding amount remains unpaid. Powers v. Adams, 2 S.W.3d 496, 499 (Tex.App. 1999, no pet.). In its summary-judgment motion, RSC stated that it provided "materials and/or rental equipment" to Prompt Professional pursuant to the parties' written agreement, and that $19,138.70 remains unpaid on the account. RSC attached summary-judgment evidence to support each element of its claim, including the written agreement and the Rivera affidavit. In his affidavit, Rivera attests to the facts stated in the motion and cites to the "true and correct copies of the permanent records of [RSC] . . . reflecting such indebtedness," which are also attached as summary-judgment evidence. We conclude that RSC's motion and evidence established the elements of its claim. See PennWell Corp., 123 S.W.3d at 766.
Appellants also argue that there are "genuine issues of material fact" precluding summary judgment because RSC's petition and motion for summary judgment state that the past due and unpaid amount of the account was $19,138.70, but RSC's pre-suit demand letter from RSC's counsel to Prompt Professional demanded payment of $17,884.39. We disagree.
RSC's summary-judgment evidence includes pre-suit demand letters from RSC's counsel to Prompt Professional and Modaberri dated May 23, 2007. In the letter to Prompt Professional, RSC's counsel explained that "[t]he original balance on your account with RSC Equipment Rental, Inc. was $30,887.82 for rentals provided during the months of October, November, December, and January." The letter also stated that RSC had agreed to credit Prompt Professional's account "the sum of $13,003.43, leaving a balance of $17,884.39." But that demand was not paid, and RSC filed a suit on account in July 2007, seeking to recover the unpaid principal amount of $19,138.70. After appellants filed their verified denial, RSC moved for summary judgment on its claim, seeking to recover the unpaid principal amount of $19,138.70, plus attorneys' fees and interest. To support its motion, RSC attached summary-judgment evidence including the Rivera affidavit, in which he attested to the fact that, under the terms of the parties' written agreement, "Prompt Professional is indebted to [RSC], after the allowance of all offsets, payments and credits, in the principal amount of $19,138.70." Consequently, RSC's petition, motion for summary judgment, and summary-judgment evidence are uncontroverted and not in conflict as to the amount due under the rental agreement. The fact that RSC made a pre-suit demand for less does not create a genuine issue of material fact precluding summary judgment on uncontroverted summary-judgment evidence establishing the amount due. See generally Harris County v. Ochoa, 881 S.W.2d 884, 889 (Tex.App.-Houston [14 Dist.] 1994, writ denied) ("A motion for a summary judgment cannot be defeated by the existence of an immaterial fact issue."); Borg-Warner Acceptance Corp. v. C.I.T. Corp., 679 S.W.2d 140, 144 (Tex.App. 1984, writ ref'd n.r.e.) (same); Minckler v. Exxon Corp., No. 05-95-01015-CV, 1997 WL 34021, at *3 (Tex.App. Jan. 30, 1997, no writ) (not designated for publication) (same). We conclude that RSC's motion and uncontroverted summary-judgment evidence conclusively demonstrated that it was entitled to summary judgment on its claim. See PennWell Corp., 123 S.W.3d at 766.
The letter does not explain the reason for the offer to credit Prompt Professional's account.
Conclusion
We overrule appellants' sole issue and affirm the trial court's judgment.