CHARLES FAIRBANK, MIKE FIRMIN, AND FIC PRODUCTS, LTD., Appellants v. FIRST AMERICAN BANK, S.S.B., Appellee

REVERSE and REMAND; Opinion issued August 7, 2007
 
 
 
In The
Court of Appeals
Fifth District of Texas at Dallas
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No. 05-06-00005-CV
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CHARLES FAIRBANK, MIKE FIRMIN, AND FIC PRODUCTS, LTD., Appellants
V.
FIRST AMERICAN BANK, S.S.B., Appellee
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On Appeal from the 68th Judicial District Court
Dallas County, Texas
Trial Court Cause No. 04-03307-C
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MEMORANDUM OPINION
Before Justices Whittington, Bridges, and Lang-Miers
Opinion By Justice Whittington
        Charles Fairbank, Mike Firmin, and FIC Products, Ltd. appeal the trial court's judgment in favor of First American Bank, S.S.B. (“FAB”). In five issues, appellants generally contend the trial judge erred in (i) granting a partial summary judgment against Fairbank and Firmin and (ii) sustaining FAB's special exceptions to FIC's pleadings. For the reasons that follow, we reverse the trial court's judgment and remand this cause for further proceedings.
        FIC executed a promissory note in favor of FAB. Fairbank and Firmin each signed an individual guaranty of the note. In April 2004, FAB alleged FIC had defaulted on its indebtedness and sued Fairbank and Firmin as guarantors on the note. After Fairbank and Firmin filed general denials, FAB filed a motion for summary judgment. While the motion was pending, Fairbank and Firmin amended their answers and asserted affirmative defenses and counterclaims. In late November 2004, FIC intervened. Fairbank and Firmin filed a response to FAB's motion for summary judgment in which they asserted numerous objections to FAB's summary judgment evidence. The judge denied their objections and granted FAB's partial motion for summary judgment. FAB filed special exceptions to FIC's plea in intervention and Fairbank's and Firmin's counterclaims. The judge sustained the special exceptions and dismissed the intervention and counterclaims.
        In their first issue, Fairbank and Firmin contend the trial judge erred in overruling their objections to FAB's summary judgment evidence. Under this issue, Fairbank and Firmin contend that if the trial judge had sustained their objections, there would be no evidence supporting FAB's motion for summary judgment. Fairbank and Firmin specifically complain of six objections that they believe should have been sustained on the grounds of “hearsay,” “factually unsupported conclusion(s),” or “conclusory statements.”
        The standard of review in a traditional summary judgment case is well-established. Selz v. Friendly Chevrolet, Ltd., 152 S.W.3d 833, 836 (Tex. App.-Dallas 2005, no pet.); Orozco v. Dallas Morning News, Inc., 975 S.W.2d 392, 394 (Tex. App.-Dallas 1998, no pet.); see Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). To prevail, a plaintiff moving for a traditional summary judgment must conclusively prove all essential elements of its cause of action. Tex. R. Civ. P. 166a(c); South West Prop. Trust, Inc. v. Dallas County Flood Control Dist. No. 1, 136 S.W.3d 1, 6 (Tex. App.-Dallas 2001, no pet.) (citing MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986) (per curiam)). When the movant has carried its summary judgment burden, the burden shifts to the nonmovant to present summary judgment evidence raising a material fact issue. Westland Oil Dev. Corp. v. Gulf Oil Corp., 637 S.W.2d 903, 907 (Tex. 1982).         In support of its motion for summary judgment, FAB submitted the affidavit of Paul Burch regarding the guaranty relationship, the alleged default and the alleged amount owed. Attached as exhibits to Burch's affidavit were copies of the $400,000 promissory note and Fairbank's and Firmin's guaranties. In the affidavit, Burch states the “principal balance, plus accrued interest and charges through March 31, 2004, due and owing . . . [is] in the amount of $215,741.82.” Fairbank and Firmin objected to this statement as conclusory, and the trial judge overruled their objection. In his affidavit, Burch does not offer facts explaining the difference between the face amount of the note and the principal balance alleged due. Furthermore, the summary judgement evidence does not contain a ledger sheet or any other document with supporting facts regarding the credit or offset history of the account.
        Legal conclusions and conclusory statements are insufficient to establish a party's right to summary judgment as a matter of law. Schultz v. Gen. Motors Acceptance Corp., 704 S.W.2d 797, 798 (Tex. App.-Dallas 1985, no writ) (“A legal conclusion in an affidavit is insufficient to establish the existence of a fact in support of a motion for summary judgment.”) (citing Mercer v. Daoran Corp., 676 S.W.2d 580, 583 (Tex. 1984)); 1001 McKinney Ltd. v. Credit Suisse First Boston Mortgage Capital, 192 S.W.3d 20, 27 (Tex. App.-Houston [14th Dist.] 2005, pet. denied) (“A conclusory statement is one that does not provide the underlying facts to support the conclusion.”); see Brownlee v. Brownlee, 665 S.W.2d 111, 112 (Tex. 1984) (“Affidavits consisting only of conclusions are insufficient to raise an issue of fact.”). By not presenting underlying facts or documentation in support of Burch's conclusion regarding the principal balance due, FAB failed to present competent summary judgment evidence in support of its motion for summary judgment and failed to establish it was entitled to summary judgment as a matter of law. See CSH Rest. Group, Inc. v. Gen. Elec. Capital Bus. Asset Funding Corp., 145 S.W.3d 822, 823-24 (Tex. App.-Dallas 2004, no pet.) (General Electric not entitled to summary judgment when evidence of default and damages not supported by assertions of fact or documents attached to affidavit). We sustain Fairbank's and Firmin's first issue.
        In the fifth issue, FIC contends the trial judge erred in granting special exceptions and dismissing its breach of contract claim against FAB. Under this issue, FIC claims the trial judge granted the special exception on a ground not raised in FAB's pleading. We agree.
        Special exceptions are appropriate to challenge a plaintiff's failure to state a cause of action. Parker v. Barefield, 206 S.W.3d 119, 120 (Tex. 2006) (citing Tex. R. Civ. P. 91). The purpose of a special exception is to “point out intelligibly and with particularity the defect, omission, obscurity, duplicity, generality, or other insufficiency in the allegations.” Tex. R. Civ. P. 91.
        In this case, FIC filed a plea in intervention in which FIC briefly recited the underlying facts and alleged “the following causes of action against FAB: . . . Breach of contract and attorney's fees . . . Conversion.”   See Footnote 1  FAB filed special exceptions as to the breach of contract, alleging (among other things) that FIC failed to (i) plead the elements of a claim for breach of contract; (ii) give FAB fair notice of the facts supporting the elements of a claim for breach of contract; or (iii) plead or identify the contract between FIC and FAB under which it was suing FAB. Thereafter, the trial judge granted FAB's special exceptions as to FIC, stating
 
FIC's claim for breach of contract is based on extrinsic evidence or oral statements that contradict the express terms of the Agreements between FIC and FAB and are not allowed under the Texas Business and Commerce Code § 26.02.
 
The order did not reference any of the grounds alleged by FAB. The trial judge then ordered FIC's plea in intervention dismissed with prejudice.         When a trial judge grants special exceptions, he may not do so on a ground not pleaded or not raised in the special exceptions. Cf. Mafrige v. Ross, 866 S.W.2d 590, 592 (Tex. 1993) (summary judgment may not grant more relief than that requested in motion for summary judgment). In this case, FAB filed proper special exceptions; however, the order sustaining those exceptions did so on a ground not raised in the special exceptions. The order referenced that the “breach of contract is based on extrinsic evidence or oral statements . . . which is not allowed under the Texas Business and Commerce Code § 26.02.” Because the trial judge erred in granting special exceptions on a ground not raised by FAB, we sustain FIC's fifth issue. In light of our disposition of issue one and five, we need not address appellants' remaining issues. See Tex. R. App. P. 47.1.
        We reverse the trial court's judgment and remand for further proceedings consistent with this opinion.
 
                                                          
                                                          MARK WHITTINGTON
                                                          JUSTICE
 
060005F.P05
 
Footnote 1 FIC also alleged “wrongful offset” to which FAB specially excepted; however, FIC does not challenge the trial judge's granting of special exceptions on that issue.