CYNTHIA AND JOSE C. CESPEDES, INDIVIDUALLY AND D/B/A A BLOOMING AFFAIR v. AMERICAN EXPRESS-CA--Appeal from County Court at Law No 1 of Hidalgo County

NUMBER 13-05-385-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG

CYNTHIA AND JOSE C. CESPEDES, INDIVIDUALLY

AND D/B/A A BLOOMING AFFAIR, Appellants,

 
v.

AMERICAN EXPRESS-CA, Appellee.

On appeal from the County Court at Law No. 1
of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Rodriguez and Garza
Memorandum Opinion by Justice Rodriguez

Appellee, American Express-CA, brought suit against appellants, Cynthia and Jose C. Cespedes, individually and d/b/a A Blooming Affair, on a sworn account. (1) Appellee filed a motion for summary judgment, which the trial court granted. The judgment purported to be final. By three issues, appellants contend that the trial court erred in: (1) issuing a judgment which purports to be final, but which does not dispose of appellants' counterclaim or third-party claims; (2) refusing to set appellants' motion to transfer venue for hearing; and (3) improperly granting summary judgment in favor of appellee. No appellee's brief has been filed. We affirm, in part, and reverse and remand, in part, to the trial court for further proceedings.

I. Procedural Background

On August 17, 2004, appellee sued appellants on a sworn account alleging that appellants owed it $25,042.51 for the lease of engraving equipment. See Tex. R. Civ. P. 185. Appellants filed a verified denial subject to a motion to transfer venue. Appellants asserted various defenses. (2) Appellee filed a motion for summary judgment claiming it had established a sworn account and challenging appellants' defenses. After appellee filed its summary judgment motion, appellants amended their answer, subject to their venue motion, to include a counterclaim alleging Deceptive Trade Practice Act (DTPA) violations against appellee and third-party claims against the sellers of the engraving machine, Levi Judson and Signature Engraving Systems, Inc. Appellants also sought a declaratory judgment against appellee asking the trial court for a determination that the contract at issue was unenforceable. In their response to appellee's motion for summary judgment, appellants objected to appellee's alleged failure to specify the grounds for its motion and its attempt to collect attorney's fees on a contingency basis. In support of their response, appellants filed the affidavit of appellant Jose C. Cespedes.

On March 3, 2005, without stating the grounds upon which it was granted, the trial court granted summary judgment in favor of appellee and against appellants. The trial court awarded appellee $25,042.51 for the principal amount due, pre- and post-judgment interest, $8,347.42 for attorney's fees, and costs of court. The judgment made no specific mention of appellants' declaratory judgment or their DTPA claims, but did state that "[t]his judgment disposes of all parties and claims and is final and appealable." In their motion for new trial, appellants challenged the finality of the judgment as to their claims. This appeal ensued.

II. Analysis

A. Finality of judgment

By their first issue, appellants allege that the trial court committed error when it issued a judgment which purported to be final but did not dispose of their counterclaim or third-party claim. Appellants assert the judgment is, therefore, not final and this Court is without jurisdiction to review the judgment at issue in this case.

Unless otherwise authorized, an appeal may only be taken from a final judgment or order. Tex. Civ. Prac. & Rem. Code Ann. 51.012 (Vernon 1997), 51.014 (Vernon Supp. 2006). The Texas Supreme Court has held that a judgment without a conventional trial is final for purposes of appeal if, and only if, either (1) it actually disposes of all claims and parties then before the court, regardless of its language, or (2) it states with unmistakable clarity that it is a final judgment as to all claims and all parties. Lehmann v. Har-Con, 39 S.W.3d 191, 192-93 (Tex. 2001) (surveying Texas cases on the subject dating from 1849 through the twentieth century). In Lehmann, the supreme court also stated that "because the law does not require that a final judgment be in any particular form, whether a judicial decree is a final judgment must be determined from its language and the record in the case." Id. at 195. If the order does not dispose of every pending claim and party but is "clearly and unequivocally" final on its face, it "is not interlocutory merely because the record does not afford a legal basis for the adjudication." Id. at 206. "In those circumstances, the order must be appealed and reversed." Id. Similarly, "granting more relief than the movant is entitled to makes the order reversible, but not interlocutory." Id. at 204.

In this case, the trial court's judgment clearly and unequivocally states the following: "This judgment disposes of all parties and claims and is final and appealable." Based on this language, there is no doubt about the trial court's intention. See id. at 206. While the judgment does not specifically dispose of the claims by appellants/counter-plaintiffs against appellee/counter-defendant American Express-CA or third-party counter-defendants Signature Engraving and Levi Judson, according to the supreme court this is a final judgment for purposes of appeal. Ritzell v. Espeche, 87 S.W.3d 536, 538 (Tex. 2002) (per curiam). Consistent with current supreme court jurisprudence, a judgment that purports to be final, even if erroneously so, is final for purposes of appeal, and we have jurisdiction to review the issues presented on appeal. (3) See id.; Lehmann, 39 S.W.3d at 206. Appellants' first issue is overruled.

B. Venue

By their third issue, appellants argue that the trial court improperly refused to conduct a hearing on their motion to transfer venue. See Tex. R. Civ. P. 87. Appellants argue that after they challenged venue, appellee did not meet its burden of presenting prima facie proof that venue was maintainable in Hidalgo County. See In re Mo. Pac. R.R. Co., 998 S.W.2d 212, 216 (Tex. 1999). As the trial court made no venue ruling, appellants assert that the fact issue of venue was incorrectly subsumed in granting the summary judgment, and, thus, the judgment was improper. We disagree.

Appellate courts have "long recognized . . . that the matter of venue is a personal privilege that a party may expressly or impliedly waive." Huey v. Huey, 200 S.W.3d 851, 853 (Tex. App.-Dallas 2006, no pet.); see Grozier v. L-B Sprinkler & Plumbing Repair, 744 S.W.2d 306, 309 (Tex. App.-Fort Worth 1988, writ denied). Movants, such as appellants, have the duty to request a hearing on their motion to transfer and, if they fail in this duty, waive their motion to transfer venue. See Tex. R. Civ. P. 87(1); Grozier, 744 S.W.2d at 312. Moreover, a party waives his venue motion by failing to pursue a hearing or by taking actions which are inconsistent with his appellate position that the venue issue is unresolved. See id. at 309-12. An appellate court must conduct an independent review of the entire record to determine whether venue was proper in the ultimate county of suit. Ruiz v. Conoco, Inc., 868 S.W.2d 752, 758 (Tex. 1993).

In this case, appellants prayed for a hearing in their motion to transfer venue that was filed on September 20, 2004. As noted on the trial court's docket, the motion was set to be heard on November 18, 2004. (4) However, on November 17, 2004, appellants' counsel called the trial court requesting that the hearing be passed. Appellants also filed a motion for continuance on November 17, 2004. The hearing on the motion to transfer venue was rescheduled for December 13, 2004.

On January 18, 2005, when appellants filed their first amended verified denial, first amended answer, and counterclaim subject to their motion to transfer venue, they again urged that the trial court set a hearing on their venue motion. Furthermore, appellants did not include any statement about the venue motion in their February 14, 2005 response to appellee's December 20, 2004 motion for summary judgment. On March 3, 2005, the trial court granted summary judgment in favor of appellee and against appellants, and on March 31, 2005, appellants filed a motion for new trial, again making no reference to their motion to transfer venue.

Other than the two venue motions, the only activity relating to appellants' request for a hearing on their venue motion was notations on the trial court's docket sheet showing that the venue matter was set for a hearing on November 18, 2004 and that, one day earlier, appellants called to reschedule the hearing. The docket sheet also shows that the hearing was rescheduled for December 13, 2004. Appellants passed the November hearing, and apparently did not pursue the rescheduled December hearing. And we find nothing in the record establishing that a hearing was scheduled following the filing of the amended motion to transfer venue on January 18, 2005. The fact that appellants passed the November hearing, did not pursue the December hearing, and did not request a hearing after filing their amended motion to transfer venue is affirmative evidence that they waived their motion to transfer venue. See Grozier, 744 S.W.2d at 311.

In the absence of a showing that a movant pursued a hearing before the court, an appellate court may also look to other matters in the record to determine whether or not the movant either expressly or impliedly waived the rights conferred upon him by the venue statute. See id. The trial court's docket sheet indicates that appellants filed a motion for continuance on November 17, 2004. (5) Also appellants filed their response to appellee's motion for summary judgment but did not make it subject to their motion to transfer venue. See Grozier, 744 S.W.2d at 311. These acts and failures to act are inconsistent with appellants' venue motion and with their present appellate position. See id; Mooney Aircraft, Inc. v. Adams, 377 S.W.2d 123, 126 (Tex. Civ. App.-Dallas 1964, no writ). They indicate an intent that appellants did not desire the trial court's ruling on their venue claim and that they were waiving their motion. See id; Mooney Aircraft, 377 S.W.2d at 126. It is evidence of an implied waiver of their motion to transfer venue. We overrule appellants' third issue.

C. Summary Judgment

By their second issue, appellants contend the trial court erred in granting appellee's motion for summary judgment because there were numerous unresolved fact issues on the sworn account and on their affirmative defenses. Appellants also contend that because they filed a verified denial appellee cannot rely on the pleadings to support its motion for summary judgment. We disagree.

1. The Law

To prevail in a traditional motion for summary judgment, the moving party has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995) (per curiam); Tweedell v. Hochhiem Prairie Mut. Ins. Ass'n, 1 S.W.3d 304, 306 (Tex. App.-Corpus Christi 1999, no pet.). When a defendant fails to file a sworn denial supported by an affidavit, a court of appeals is limited in what it can consider to set aside a summary judgment on a sworn account because the defendant will not be permitted to dispute the plaintiff's claim. Panditi v. Apostle, 180 S.W.3d 924, 926-927 (Tex. App.-Dallas 2006, no pet.) (citing Price v. Pratt, 647 S.W.2d 756, 757 (Tex. App.-Corpus Christi 1983, no writ)). "However, it is within the province of the court of appeals to determine, as a matter of law, whether the pleadings are sufficient on their face to constitute a sworn account." See id. (citing Price, 647 S.W.2d at 757).

Finally, when a plaintiff files a traditional motion for summary judgment in an action in which the defendant has pleaded an affirmative defense, the plaintiff is entitled to summary judgment if he demonstrates that there is no material factual issue regarding the elements of his claim, unless the defendant shows there is a disputed fact issue regarding the affirmative defense. Bauer v. Jasso, 946 S.W.2d 552, 555 (Tex. App.-Corpus Christi 1997, no pet.). We review summary judgments de novo, Natividad v. Alexis, Inc., 875 S.W.2d 695, 699 (Tex. 1994); Tex. Commerce Bank-Rio Grande Valley, N.A. v. Correa, 28 S.W.3d 723, 726 (Tex. App.-Corpus Christi 2000, pet. denied), taking as true all evidence favorable to the non-movant and indulging every reasonable inference in the non-movant's favor. Trigo v. Munoz, 993 S.W.2d 419, 421 (Tex. App.-Corpus Christi 1999, pet. denied).

2. Sworn Account

This case involves a suit on a sworn account arising out of the use of an engraving machine provided to appellants by appellee. Rule 185 of the Texas Rules of Civil Procedure sets out the criteria for a suit on account and defines an open account to include "any claim . . . for personal services rendered." See Tex. R. Civ. P. 185. "[I]t is a rule of procedure regarding the evidence necessary to establish a prima facie right of recovery." Panditi, 180 S.W.3d at 926. Under rule 185, a plaintiff's petition on a sworn account must (1) contain a systematic, itemized statement of the goods or services sold, (2) reveal offsets made to the account, and (3) be supported by an affidavit stating the claim is within the affiant's knowledge, and that it is due and "just and true." Tex. R. Civ. P. 185; Powers v. Adams, 2 S.W.3d 496, 498 (Tex. App.-Houston [14th Dist.] 1999, no pet.); see PennWell Corp. v. Ken Assocs., 123 S.W.3d 756, 765 (Tex. App.-Houston [14th Dist.] 2003, pet. denied). Such a petition with its supporting affidavit creates an evidentiary presumption in favor of the plaintiff. See Powers, 2 S.W.3d at 498. However, when a defendant files a sworn denial of the plaintiff's account supported by an affidavit denying the account as required by rule 93(10), see Tex. R. Civ. P. 93(10), the evidentiary presumption is destroyed and the plaintiff is forced to introduce proof of its claim. Powers, 2 S.W.3d at 498 (citing Roberts Express, Inc. v. Expert Transp., Inc., 842 S.W.2d 766, 770 (Tex. App.-Dallas 1992, no writ)).

In this case, appellee's petition on a sworn account was supported by the affidavit of Mark Bregar. In his affidavit, Bregar set out (1) that the accounting records showed a principal balance of $25,042.51, (2) that the account was just and true within his knowledge, (3) that the claim was due to appellee from appellants, and (4) that all just and lawful offsets, payments, and credits had been allowed. Appellants' accounting records and the agreement at issue were attached to Bregar's affidavit and supported as business records. We conclude that appellee's petition with its supporting affidavit provided prima facie proof of the sworn account and created an evidentiary presumption in favor of appellee. See Powers, 2 S.W.3d at 498; Copeland v. Hunt, 434 S.W.2d 156, 158 (Tex. App.-Corpus Christi 1968, writ ref'd n.r.e.). As a matter of law, the pleadings were sufficient on their face to constitute a sworn account. See Price, 647 S.W.2d at 757.

In response to appellee's petition, appellants filed a verified denial urging various defenses. Appellants generally claimed that the sworn account was defective. However, appellants did not file a supporting affidavit denying the account. See Tex. R. Civ. P. 93(10), 185. The two affidavits appellants filed with the verified denial addressed only venue issues. The evidentiary effect of the itemized account, as set out in appellee's original petition with supporting affidavit, was not, therefore, destroyed. See PennWell Corp., 123 S.W.3d at 765; Powers, 2 S.W.3d at 498. Because appellants did not support their claims with an affidavit, appellee, as plaintiff/summary judgment movant, was not forced to put on proof of its claim in the summary judgment proceeding, but rather was entitled to summary judgment on the pleadings. See PennWell Corp., 123 S.W.3d at 765; Powers, 2 S.W.3d at 498. Moreover, appellee informed the trial court in its motion that it was relying on the pleadings on file. Therefore, based on appellee's prima facie proof, we conclude that appellee established that there is no genuine issue of material fact and that it is entitled to the summary judgment as a matter of law on its sworn account claim. See Tex. R. Civ. P. 166a(c).

3. Affirmative Defenses

Appellants also contend, in their second issue, that fact issues remain on their failure of consideration and fraud affirmative defenses. In support of these assertions, appellants attached to their response to appellee's motion for summary judgment the affidavit of appellant Jose C. Cespedes. See Bauer, 946 S.W.2d at 555 (providing that appellants must establish there is a disputed fact issue regarding their affirmative defenses). Cespedes's affidavit provides the following, in relevant part:

Prior to the transaction which forms the basis of this litigation, extensive discussions were made with Plaintiff's agent that participated in the sale of the subject machine in question. Particularly, said agent materially misrepresented the contact in question, misrepresented how the payment schedule was to be applied against the principal balance, which in fact, it was not to be applied against the principal balance, but rather, was simply rental, misrepresented that the subject contract allowed for early payoff, which in fact, does not, and misrepresented the overall transaction made the basis of this litigation. The misrepresentation of these material facts negates in whole or in part any consideration, if any, that was exchanged between the parties. There was lack of meeting of the minds, and we would not have ever entered into a transaction in question, in which we would be prohibited from paying off the principal balance;

 

Plaintiff has overcharged us, and failed to provide credit for insurance on the subject unit made the basis of this litigation.

 

As we concluded above, appellee has demonstrated that there is no material fact issue regarding its sworn account claim. Based on Joel Cespedes's affidavit, we cannot conclude that appellants have shown that there is a disputed fact issue as to their affirmative defenses. See id. The affidavit states conclusions only and sets out no facts concerning claims or defenses. See Alvarado v. Old Republic Ins. Co., 951 S.W.2d 254, 261 (Tex. App.-Corpus Christi, 1997, no pet.). "Legal conclusions in affidavits are insufficient to raise fact issues in response to motions for summary judgments." Id. (citing Mercer v. Daoran Corp., 676 S.W.2d 580, 583 (Tex. 1984).

4. Attorney's Fees

Finally, in their second issue, appellants assert that the trial court erred in awarding appellee attorney's fees as part of the judgment because the fees were not supported by the evidence and because a contingency fee is insufficient to support an award of attorney's fees in a breach of contract case. "A person may recover reasonable attorney's fees from an individual or corporations, in addition to the amount of a valid claim and costs, if the claim is for . . . a sworn account." Tex. Civ. Prac. & Rem. Code Ann. 38.001 (Vernon 1997). However, the claimant must be represented by counsel, the claim must be presented to the opposing party, and payment must not have been tendered before the expiration of the thirtieth day after the claim was presented. Id. 38.002 (Vernon 1997); see Doncaster v. Hernaiz, 161 S.W.3d 594, 606 (Tex. App.-San Antonio 2005, no pet.). Moreover, "[i]t is presumed that the usual and customary attorney's fees for a claim of the type described in Section 38.001 are reasonable . . . [although] [t]he presumption may be rebutted." Tex. Civ. Prac. & Rem. Code Ann. 38.001 (Vernon 1997).

In its petition appellee prayed for attorney's fees, and in its motion for summary judgment appellee requested fees in the amount of one-third of the principal balance sued upon. In support of this request, appellee relied on the affidavit of Paul R. Wilson wherein he stated, among other things, that "[a] usual and customary attorney fee for prosecution of a collection matter on a contingent fee basis in the county where this suit lies is one-third of the principal balance sued upon." On appeal, appellants challenge only the reasonableness of the attorney's fees, arguing that a contingency fee is insufficient to support an award of attorney's fees in a breach of contract case. (6) However, appellants have provided no evidence controverting appellee's supporting affidavit. Therefore, the presumption that the usual and customary attorney's fees for the handling of this sworn account are reasonable has not been rebutted in this case; no fact issue has been created. Based on the above, appellee has established its entitlement to the award of attorney's fees in the amount of $8,347.42. See id. 38.001, 38.002, 38.003 (Vernon 1997).

Appellant's second issue is overruled.

III. Conclusion

Accordingly, having determined we have jurisdiction to review the sworn account issues presented on appeal, we affirm the trial court's judgment to the extent it grants summary judgment in favor of appellee on the sworn account. However, having also determined that all claims have not been disposed of in this case, we reverse the judgment as to appellants' remaining claims and remand those claims to the trial court for further proceedings. See Ritzell, 87 S.W.3d at 538; Lehmann, 39 S.W.3d at 206.

NELDA V. RODRIGUEZ

Justice

 

Memorandum Opinion delivered and

filed this 10th day of May, 2007.

1. The substance of appellee's claim is breach of contract. It also asserts quantum meruit as a cause of action. However, because we dispose of the summary judgment issue in this appeal on a procedural basis, see Tex. R. Civ. P. 185 (providing for only a procedure for the presentation of specific substantive claims enumerated in the rule), we need not address appellee's substantive claims. See Tex. R. App. P. 47.1.

2. Appellants asserted the following defenses in their verified denial: (1) that appellee failed to properly give notice and proof of claim for damages; (2) that the contract/agreement failed for lack of consideration; and (3) that the contract/agreement was based upon inadequate consideration. They also asserted defenses of fraud and misrepresentation. Additionally, appellants contended that they were excused under the contract because of their mistaken belief regarding its terms.

3. We have determined that this Court has jurisdiction to review appellants' issues regarding the trial court's granting of appellee's motion for summary judgment on the sworn account. We have also determined, however, from our review of the record, that appellants' counterclaims and crossclaims against appellee and the sellers of the engraving machine were not disposed in the summary judgment proceeding and were not made moot as the result of the entry of the summary judgment. The judgment was entered, in error, as to those claims. Therefore, pursuant to Lehman and Ritzell, appellants' counterclaims and crossclaims must be remanded to the trial court for further proceedings. Ritzell v. Espeche, 87 S.W.3d 536, 538 (Tex. 2002) (per curiam); Lehmann v. Har-Con, 39 S.W.3d 191, 192-93 (Tex. 2001).

4. Although a docket entry forms no part of the record which may be considered as it is a memorandum made for the trial court and clerk's convenience, see Aguirre v. Phillips Props., 111 S.W.3d 328, 333 (Tex. App.-Corpus Christi 2003, pet. denied), we refer to it because appellants cite to the docket sheet in the clerk's record in support of their assertion that the trial court abused its discretion in refusing to set the motion to transfer venue for hearing. See generally, N-S-W Corp. v. Snell, 561 S.W.2d 798. 799 (Tex. 1977) (orig. proceeding) (holding that "a docket entry may be considered to supply facts in certain situations," specifically to supply facts in certain situations to correct clerical errors in judgments or orders); Energo Int'l Corp. v. Modern Indus. Heating, Inc., 722 S.W.2d 149, 151 n.2 (Tex. App.-Dallas 1986, no writ) (discussing N-S-W Corp., 561 S.W.2d at 799); see also Guyot v. Guyot, 3 S.W.3d 243, 246-48 (Tex. App.-Fort Worth 1999, no pet.); cf. Ross v. Arkwright Mut. Ins. Co., 892 S.W.2d 119, 129 (Tex. App.-Dallas 1994, no writ) (holding that properly authenticated docket sheets served with affidavits were proper summary judgment proof where affidavits relied in part on the docket sheets to show that no extraordinary writs or other process had been issued, and the affidavits also contained statements based on affiant's involvement in and personal knowledge of the suit).

5. Because the motion for continuance does not appear in the record, we do not know if it was filed subject to appellants' venue motion.

6. In their response, appellants also asserted that appellee failed to comply with the attorney's fee notice provisions of chapter 38 of the Texas Civil Practice and Remedies Code and PP&G Indus. v. J&B-Houston Ctrs., 41 S.W.3d 270, 285 (Tex. App.-Houston [14th Dist.] 2001), rev'd on other grounds, 146 S.W.3d 79, 82-83 (Tex. 2004). This argument, however, is not brought on appeal.