Oliver, Floyd and Layton Oliver v. Carter and Company IRR., Inc.--Appeal from County Court of Gaines County

COURT OF APPEALS

COURT OF APPEALS

EIGHTH DISTRICT OF TEXAS

EL PASO, TEXAS

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FLOYD OLIVER and LAYTON OLIVER, ) No. 08-01-00446-CV

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Appellants, ) Appeal from

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v. ) County Court

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CARTER AND COMPANY IRR., INC., ) of Gaines County, Texas

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Appellee. ) (TC# 1765)

O P I N I O N

Carter and Company Irr., Inc. (Carter & Co.) filed suit on a sworn account against Floyd and Layton Oliver (the Olivers). Alleging a defect in the Olivers= answer, Carter & Co. successfully sought summary judgment. We reverse and remand.

FACTUAL SUMMARY

Carter & Co. filed an original petition in the Gaines County Court alleging that the Olivers defaulted in making payment on their account with the company. Carter & Co. claimed that they sold services and/or merchandise to the Olivers which they accepted and became bound to pay at the designated price, Awhich is a reasonable, usual, and customary price for such merchandise.@ The total balance claimed to be due to Carter & Co. was $6,796.01, Aexclusive of interest after all just and lawful offsets, credits, and payments have been allowed.@ Attached to the petition was a statement of account, which included a copy of a calculator tape and copies of six invoices.

 

The Olivers= original answer contains the following recitation:

COMES NOW, FLOYD OLIVER and LAYTON OLIVER, Defendants in the above-entitled and numbered cause, and files this their verified Original Answer and would show the Court:

I. GENERAL DENIAL

Defendants deny each and every, all and singular, the allegations of Plaintiff=s Original Petition and demand strict proof thereof as required by the Texas Rules of Civil Procedure. Said Defendants deny the charges as reasonable and customary and the amount asserted and/or claimed.

II. PRAYER

Defendants pray the Court, after notice and hearing or trial, enter judgment in favor of Defendants, award Defendants their costs of court, attorney=s fees, and such other and further relief as Defendants may be entitled to in law or in equity. [Emphasis added].

The Olivers verified their original answer by Averification@ that reads as follows:

VERIFICATION

. . .

We the undersigned, FLOYD OLIVER and LAYTON OLIVER, Defendants in the above-numbered and entitled cause do hereby enter this verification of denial of the said sworn account. We hereby enter said denial, denying each and every allegation contained therein and specifically denying an amount due, the specifics of said amount being due, and the debt and/or account. A denial is hereby entered as to the amount charged and as to whether such charges were usual, customary, and/or reasonable prices for said merchandise and/or services and denying the amount asserted.

Signed this the 15th day of June, 2001.

/s/ Floyd Oliver

/s/ Layton Oliver

SWORN TO AND SUBSCRIBED BEFORE ME, by the said FLOYD OLIVER, this 15th day of June, 2001.

 

/s/ Scarlett Eastteam

Notary Public, State of Texas

SWORN TO AND SUBSCRIBED BEFORE ME, by the said LAYTON OLIVER, this 15th day of June, 2001.

/s/ Rhonda Marion Trent

Notary Public, State of Texas

Four days later, Carter & Co. moved for summary judgment pursuant to Rule 166a of the Texas Rules of Civil Procedure on the grounds that the Olivers= answer was

[D]efective and insufficient in law to constitute or raise a defense to Plaintiff=s cause of action on the account referred to in Plaintiff=s Original Petition. The pleadings, exhibits, and affidavits filed in this cause show that there is no genuine issue as to any material fact between the parties and accordingly plaintiff is entitled to judgment against Defendant as a matter of law as requested in the Plaintiff=s original Petition. [Emphasis added].

The Olivers failed to file their objections and response to the motion within the required time period and asked for leave of court to file the response. The trial court denied the request. The Olivers then filed a motion to reconsider which was also denied.

The day before the trial court denied the motion to reconsider, the Olivers filed an amended original answer. It included two paragraphs, one setting forth a Ageneral denial@ and the other a Aspecific denial.@ The general denial was a reassertion of the general denial made in the original answer:

Defendants deny each and every, all and singular, the allegations of Plaintiff=s Original Petition and demand strict proof thereof as required by the Texas Rules of Civil Procedure. Said Defendants deny the charges as reasonable and customary and the amount asserted and/or claimed.

The specific denial provided:

 

Defendants enters [sic] a verified denial pursuant to Tex.R.Civ.P. 93(10), and for proof thereof, incorporates the attached verification and Exhibit >A= herein. Further, Defendants would show that in connection with the account in question, there was no sale or delivery of goods and/or services, the amount alleged due and owing by the Plaintiff was not in accordance with an agreement, if any, and the amount is not unpaid.

The amended answer was supported by an affidavit by Floyd Oliver. In its summary judgment, the trial court stated:

Having considered the Plaintiff=s Motion, the Pleadings and Affidavits on file herein as well as the argument of counsel, the Court finds that Plaintiff=s suit is founded upon a sworn account, but that the Defendant has failed to file a Response in compliance with the Texas Rules of Civil Procedure, and that no such Response has been timely tendered; it is, therefore, ORDERED that such Response not be filed in the record of this cause. [Emphasis added].

The court also ordered that Carter & Co. recover from the Olivers the sum of $6,796.01 together with pre-judgment and post-judgment interest, and attorney=s fees and costs. The Olivers timely filed this appeal. In their sole point of error, the Olivers claim that the trial court erred in granting summary judgment because Carter & Co. failed to prove the requisite elements of a suit on a sworn account as a matter of law with sufficient summary judgment evidence. The Olivers claim they filed a proper verified denial of Carter & Co.=s claims and amended the verified denial prior to the summary judgment hearing so as to raise a material fact issue. Consequently, Carter & Co.=s prima facie case was rebutted and Carter & Co. was required to prove each element of its claim on the account, but failed to do so.

STANDARD OF REVIEW

 

The standard of review on appeal is whether the successful movant at the trial level demonstrated that there are no issues of material fact and that it is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Co., Inc., 690 S.W.2d 546, 548 (Tex. 1985). In resolving the issue of whether the movant has carried this burden, all evidence favorable to the non-movant must be taken as true and all reasonable inferences, including any doubts, must be resolved in the non-movant=s favor. Id. at 548-49. When a trial court=s order granting summary judgment does not articulate the grounds relied on for its ruling, an appellate court will affirm a summary judgment if any of the theories advanced are meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).

SUIT ON A SWORN ACCOUNT

Texas Rules of Civil Procedure 185 and 93(10) govern suits for debt on a sworn account. Rule 185 provides:

When any action or defense is founded upon an open account or other claim for goods, wares and merchandise, including any claim for a liquidated money demand based upon written contract or founded on business dealings between the parties, or is for personal service rendered, or labor done or labor or materials furnished, on which a systematic record has been kept, and is supported by the affidavit of the party, his agent, or attorney taken before some officer and authorized to administer oaths, to the effect that such claim is, within the knowledge of affiant, just and true, that it is due, and that all just and lawful offsets, payments and credits have been allowed, the same shall be taken as prima facie evidence thereof, unless the party resisting such claim shall file a written denial, under oath. A party resisting such a sworn claim shall comply with the rules of pleading as are required in any other kind of suit, provided, however, that if he does not timely file a written denial, under oath, he shall not be permitted to deny the claim, or any item therein, as the case may be. No particularization or description of the nature of the component parts of the account or claim is necessary unless the trial court sustains special exceptions to the pleadings. [Emphasis added].

Tex.R.Civ.P. 185. Rule 93 provides:

A pleading setting up any of the following matters, unless the truth of such matters appear of record, shall be verified by affidavit.

. . .

10. A denial of an account which is the foundation of the plaintiff=s action, and supported by affidavit. [Emphasis added].

 

Tex.R.Civ.P. 93(10).

In order to establish sufficient evidence to support a prima facie case in a suit on a sworn account and sufficient evidence to support a summary judgment disposition, the movant must strictly adhere to the provisions of the Texas Rules of Civil Procedure. Tex.R.Civ.P. 185, 93(10), 166a. Andrews v. East Texas Med. Ctr.--Athens, 885 S.W.2d 264, 267 (Tex.App.--Tyler 1994, no writ); Cooper v. Scott Irrigation Constr. Inc., 838 S.W.2d 743, 746 (Tex.App.--El Paso 1992, no writ). If there is a deficiency in the plaintiff=s sworn account, the account will not constitute prima facie evidence of the debt. See Enernational Corp. v. Exploitation Eng=rs, Inc., 705 S.W.2d 749, 750 (Tex.App.--Houston [1st Dist.] 1986, writ ref=d n.r.e.). At the same time, the defendant=s denial must be written and supported by an affidavit denying the account. Tex.R.Civ.P. 93(10); Andrews, 885 S.W.2d at 267. A sworn general denial is insufficient. Huddleston v. Case Power & Equipment Co., 748 S.W.2d 102, 103 (Tex.App.--Dallas 1988, no writ); Cooper, 838 S.W.2d at 746. A proper denial will destroy the prima facie effect of the verified claim and will force the plaintiff to prove his claim. Cooper, 838 S.W.2d at 746. A party who fails to file a sworn denial as required by Rules 185 and 93(10) may not dispute the receipt of items or services or the correctness of the stated charges. Canter v. Easley, 787 S.W.2d 72, 73 (Tex.App--Houston [1st Dist.] 1990, writ denied), citing Vance v. Holloway, 689 S.W.2d 403 (Tex. 1985); Cooper, 838 S.W.2d at 745-46. Should the defendant=s answer not satisfy the requirements of Rule 93(10), the plaintiff=s affidavit attached to its petition will be considered prima facie evidence to support a summary judgment and additional proof of the accuracy of the account is unnecessary. Rizk v. Financial Guardian Ins. Agency, Inc. 584 S.W.2d 860, 862 (Tex. 1979). Consequently, the plaintiff may dispose of the case on the pleadings alone. Andrews, 885 S.W.2d at 268.

 

The issue before us is the sufficiency of the Olivers= sworn denial in their original answer. Carter & Co.=s motion for summary judgment alleged that the Olivers= answer was Adefective and insufficient in law to constitute or raise a defense@ to their cause of action. It is unclear from the language of the motion or the trial court=s order granting summary judgment whether the summary judgment was granted because of an insufficiency of the language used in the answer to deny Carter & Co.=s claim or because of a defect in the form of the purported affidavit supporting the answer. In either case, we find that the Olivers= original answer did not satisfy the requirements of Rules 185 and 93(10) to destroy the prima facie effect of Carter & Co.=s sworn account claim.

 Sufficiency of the Olivers= Original Answer

 

Carter & Co.=s original petition and supporting affidavit complied with Rule 185 and established a prima facie case on the sworn account claim. At this point, Carter & Co. was entitled to summary judgment on the pleadings without additional proof unless the Olivers properly controverted the claim with a written denial. Rule 185 requires that the party resisting a sworn account Afile a written denial, under oath@ and comply with Rule 93(10) requiring a special verified denial of the account supported by an affidavit in order to put the plaintiff=s claim at issue. Huddleston, 784 S.W.2d at 103. Neither Rule 185 nor Rule 93(10) specifies a particular form or mandate magic words to be used in a defendant=s sworn denial. Andrews, 885 S.W.2d at 267. Rule 185 was amended in 1984 to eliminate the technical pleading requirements of the former version and to make suits on account subject to ordinary rules of pleading and practice. Canter, 787 S.W.2d at 74. While no specific form or words are required, the answer must Asufficiently deny@ the account upon which the plaintiff=s claim is founded. Id.; Cooper, 838 S.W.2d at 746. A defendant need not deny each and every item of a sworn account claim, but must deny the account upon which the plaintiff=s case is based. Huddleston, 784 S.W.2d at 103-04. Carter & Co. argues that the verified pleading attached to the Olivers= answer is no more than a verified general denial and fails to satisfy the requirements of Rules 185 and 93(10). We disagree.

The Olivers denied the account upon which Carter & Co.=s claim is based with specific facts. They denied the amount due and Awhether such charges were usual, customary and/or reasonable prices for said merchandise and/or services . . . . @ This denial directly controverts the claim made by Carter & Co. in their original petition regarding the reasonableness of the prices for the merchandise at issue. While no specific form or words are required, the denial must be directed at the particular account in question.

In Canter, the court held that a defendant=s sworn answer met the requirements of Rules 185 and 93(10) and that it sufficiently denied the account upon which the plaintiff=s claim was based when it denied Athe allegations contained in Paragraphs II and III and IV of the Plaintiff=s Original Petition@ and where Paragraph II of the plaintiff=s original petition contained the sworn account allegations. Canter, 787 S.W.2d at 73-74. The Olivers= answer is more specific. See Worley v. Butler, 809 S.W.2d 242, 245 (Tex.App.--Corpus Christi 1990, no writ)(where plaintiff would have to show that the prices charged in the absence of an agreement are the usual, customary, and reasonable prices for that merchandise or services). The Olivers= answer included a denial that the charges were reasonable and customary. This was sufficient to raise a fact issue to overcome the plaintiff=s prima facie case. However, whether or not the language in the Olivers= answer sufficiently denies the sworn account claim, the attached Averification@ renders the answer fatally defective.

 

 The  AVerification@ as Affidavit

Carter & Co. argues that the Olivers= answer was insufficient because it failed to have an affidavit in support of the answer as required by Rules 185 and 93(10). We agree. The Averification@ attached by the Olivers did not constitute an affidavit. AAffidavit@ is defined as Aa statement in writing of a fact or facts signed by the party making it, sworn to before an officer authorized to administer oaths, and officially certified to by the officer under his seal of office.@ Tex.Gov=t Code Ann. ' 312.011(1)(Vernon 1998). No particular terminology is required by Section 312.011 to render a document an affidavit. Norcross v. Conoco, Inc., 720 S.W.2d 627, 630 (Tex.App.--San Antonio 1986, no writ). It is the substance and not the form of an affidavit that is important. Id., citing Taylor v. Fred Clark Felt Company, 567 S.W.2d 863 (Tex.Civ.App.--Houston [14th Dist.] 1978, writ ref=d n.r.e.). However, the form of a statement is important for purposes of determining whether such statement qualifies as an affidavit that must accompany a written denial under Rules 185 and 93 (10).

 

In order for the Averification@ to satisfy the requirements of an affidavit under Rules 185 and 93, it must recite under oath that the factual statements contained in the defendant=s answer are true. See Brown Foundation Repair and Consulting, Inc., v. Friendly Chevrolet Co., 715 S.W.2d 115, 117 (Tex.App.--Dallas 1986, writ ref=d n.r.e.). Brown involved a sworn account where the defendant=s trial pleading read in relevant part, ASUBSCRIBED AND SWORN TO before me, the undersigned authority, by Robert L. Brown, known to me to be the Vice-President of Brown Foundation Repair and Consulting, Inc., to certify which witness my hand and seal of office this 28 day of June, 1985.@ Id. The court held that the affidavit did not constitute a verified denial because A[n]owhere does it appear that Robert L. Brown has sworn or affirmed under oath that the facts stated are true.@ Id. at 118. While the verification here was signed by both of the Olivers and was sworn to before two notaries, it does not contain an oath that the facts alleged in the answer are true and thus does not satisfy the requirements for an affidavit under Rules 185 and 93(10).

 Sufficiency of the Olivers= First Amended Original Answer

Having determined that the Olivers= original answer failed to satisfy the requirements of Rules 185 and 93(10) so as to properly controvert Carter & Co.=s sworn account claim, we now turn to the Olivers= claim that their first amended answer sufficed. The day before the trial court denied the motion to reconsider the request for the late filing of a response to the motion for summary judgment, the Olivers filed an amended original answer containing both a Ageneral@ denial reasserting the denials made in the original answer and a Aspecific@ denial that provided additional facts controverting the sworn account claim. The answer was supported by an Aaffidavit@ signed by Floyd Oliver.

The amended answer and supporting affidavit easily satisfy the requirements of Rules 185 and 93(10). It contained more than a broad denial of the allegations against the Olivers and specific reference was made to the account which is the basis of the plaintiff=s petition, stating, Ain connection with the account in question, there was no sale or delivery of goods and/or services . . . .@ The Olivers also denied that Athe amount alleged due and owing by the Plaintiff was not in accordance with any agreement, if any . . . . @ The affidavit contained the essential affirmation under oath that the statements contained in the Olivers= amended answer were Atrue and correct@ as well as all other recitations required in an affidavit.

Was the First Amended Answer Considered by the Trial Court?

 

The Olivers argue that because they filed the amended answer prior to the hearing on the motion for summary judgment, because there was no evidence in the record that Carter & Co. objected to it or suffered unfair prejudice or surprise, and because there was no indication that the trial court did not consider it, leave to file the amended answer should be presumed. We agree. Rule 63 of the Texas Rules of Civil Procedure provides:

Parties may amend their pleadings . . . provided, that any pleadings, responses or pleas offered for filing within seven days of the date of trial or thereafter, or after such time as may be ordered by the judge under Rule 166, shall be filed only after leave of the judge is obtained, which leave shall be granted by the judge unless there is a showing that such filing will operate as a surprise to the opposite party.

 

Tex.R.Civ.P. 63. Rule 63 has been given a liberal interpretation. Goswamiv. Metropolitan Savings and Loan Association, 751 S.W.2d 487 (Tex. 1988). In Goswami, the Texas Supreme Court held that since the record in the case was silent of any basis to conclude that the amended petition was not considered by the trial court and that the opposite party did not show surprise or prejudice, leave of court was presumed. Goswami, 751 S.W.2d at 490. Here, the amended answer was filed within seven days of the summary judgment hearing. The Goswami court determined that a summary judgment proceeding is a Atrial@ within the meaning of Rule 63. Id. The trial court=s order granting summary judgment states that it Aconsidered the Plaintiff=s Motion, the Pleadings and Affidavits on file herein.@ The record does not indicate that the trial court refused leave to file the amended answer; it indicates only that the trial court denied leave to file an untimely response to the motion for summary judgment. Nor does the record contain any indication that Carter & Co. would suffer surprise or prejudice. Thus, we presume that the trial court granted leave to amend and that the amended answer was properly before the trial court when it entered its order on the motion for summary judgment. The amended answer and supporting affidavit satisfied the requirements of Rules 185 and 93(10). Consequently, Carter & Co.=s petition cannot be considered prima facie evidence to support summary judgment in their favor. We overrule Appellants= sole issue and reverse and remand for further proceedings.

June 13, 2002

ANN CRAWFORD McCLURE, Justice

Before Panel No. 4

Barajas, C.J., Larsen, and McClure, JJ.

(Do Not Publish)