Opinion
No. 10-03-00322-CV
Opinion Delivered and Filed March 30, 2005.
Appeal from the 40th District Court, Ellis County, Texas, Trial Court # 62048.
Judgment reversed and rendered; cause remanded.
Terry L. Jacobson and Ron Edmondson, Jacobson, Beard Edmondson, P.C., Corsicana, TX, for Appellant/Relator.
Chad M. Ruback and Michael R. Goldman, Godwin Gruber, LLP, Dallas, TX, for Appellee/Respondent.
Before Chief Justice GRAY, Justice VANCE, and Justice REYNA (Chief Justice GRAY dissents without a separate opinion).
MEMORANDUM OPINION
Citizen's National Bank sued three borrowers for non-payment of a $25,000 loan. One of the borrowers, Terry Scott, had pledged his Cessna airplane as collateral on the loan. After a bench trial, the judge rendered judgment against Scott and the other two borrowers for the loan amount, interest, attorney's fees, and foreclosure of the airplane. On appeal, Scott attacks the adverse finding of non-payment. We will sustain his issues, reverse the judgment, render judgment for Scott on the loan-liability, but remand for determination of counterclaims Scott filed.
BACKGROUND
In June 2000, Scott, Richard Engel, and Richard Karamatic borrowed $25,000 from Citizen's National Bank ("Bank") as startup costs for Inoquest Communications ("Inoquest"). On October 31, 2000, Albert Garcia, a bank employee, performed a force pay debit (internal funds transfer) from the Inoquest account in the amount of $26,267.10 to "payoff" the note. On November 6, the transfer was reversed by Garcia, and the money was transferred back to the Inoquest account. On January 3, 2001, Scott received a letter from Engel that the loan was paid off. However, Scott then received a letter from the Bank that payment was due immediately on the loan. He responded that he was informed by the General Partner of Inoquest (Engel) that the loan was paid off, and later he requested all correspondence pertaining to this note. He received no response from the Bank. In May, the Bank sued Scott, Engel, and Karamatic to recover the loan amount, interest, and attorney's fees, and for foreclosure of the collateral (the airplane). Scott filed a general denial and affirmative defenses that (1) the debt was paid in full by Inoquest, and (2) accord and satisfaction. He also filed a counterclaim seeking (1) declaratory judgment that the note and security agreement had been discharged, (2) relief for wrongful sequestration, and (3) attorney's fees. After a one-day bench trial, the judge rendered judgment against Scott, Engel, and Karamatic, jointly and severally, for $32,176.27 principal and interest, $14,000 in attorney's fees, and foreclosure of the lien on the airplane.
Scott timely filed his Request for Findings of Fact and Conclusions of Law. After he filed a Notice of Past Due Findings of Fact and Conclusions of Law, the court signed and filed the Bank's proposed findings and conclusions, which essentially stated that there had been no payment on the note. Scott filed a Request for Additional and Amended Findings and Conclusions of Law to basically state that the loan was paid off and the payoff was not a result of a mistake by the Bank. The court did not respond to this request, and Scott timely filed his notice of appeal.
STANDARD OF REVIEW
When a party who had the burden of proof brings a "legal sufficiency" issue complaining of an adverse finding, that party must demonstrate that the evidence establishes conclusively, i.e., as a matter of law, all vital facts in support of the finding sought by the party. Dow Chemical Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001); Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690, (Tex. 1989). 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, our inquiry ends; but if no evidence supports the adverse finding, we review the entire record to determine if the contrary proposition is established as a matter of law. Id.
A no-evidence point must and can only be sustained when the record reveals: (1) a complete absence of evidence of a vital fact; (2) rules of law or rules of evidence bar the appellate court from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; and (4) the evidence conclusively establishes the opposite of a vital fact. Juliette Fowler Homes, Inc. v. Welch Assocs., Inc., 793 S.W.2d 660, 666 n. 9 (Tex. 1990) (citing Calvert, "No Evidence" and "Insufficient Evidence" Points of Error, 38 TEX. L. REV. 361, 362-63 (1960)).
ISSUES ONE THROUGH SIX: LEGAL SUFFICIENCY
After a thorough review of the entire record, we find that the evidence conclusively establishes, as a matter of law, all vital facts to support a finding of payment. See Dow Chemical, 46 S.W.3d at 241; Sterner, 767 S.W.2d at 690. We must sustain Scott's legal sufficiency issues because the evidence conclusively establishes the opposite of a vital fact found by the trial judge ( i.e., non-payment). See Juliette Fowler, 793 S.W.2d at 666 n. 9.
CONCLUSION
Having sustained Scott's issues, we reverse the judgment, render judgment that the Bank take nothing by its suit, and remand the cause to the trial court for further proceedings to determine Scott's counterclaims.