Houston Business and Commercial Litigation Attorneys Bruce A. Atkins - Business and Commercial Litigation, Commercial Law, and Contracts Lawyers in Houston Texas

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Summary Judgment

UNIVERSITY OF HOUSTON LAW CENTER
COLLECTING DEBTS AND JUDGMENTS
                                  2005

                  SUMMARY JUDGMENT:
                    COLLECTION CASES
                       IN TEXAS STATE
                         TRIAL COURTS

BRUCE A. ATKINS
12826 WILLOW CENTRE DRIVE, SUITE A
HOUSTON, TEXAS 77066-3028
(832) 249-7900, telephone
(832) 249-7901, facsimile
www.lawyers.com/bruceatkinslaw

© Bruce A. Atkins, 2009

Summary judgments are frequently used procedures for accelerated final judgments in collection cases. They are second to default judgments in the disposition of collection cases.[1] Often, the amount of the debt is easily provable by documents; and defenses or counterclaims, if any, are illusory, sometimes disingenuous, and surmountable. This article discusses collection actions most amenable to summary judgment.

I. COLLECTION ACTIONS MOST AMENABLE TO SUMMARY JUDGMENT. The genres of collection actions most amenable to summary judgment are: (a) suit on account under Tex. R. Civ. P. 185 (sworn account); and (b) suit on written instrument (contracts, promissory notes, leases, or guarantys).

II. SUIT ON ACCOUNT

Summary judgment is appropriate when a suit on account under Tex. R. Civ. P. 185 (sworn account) is answered with an unsworn denial, usually a general denial, as opposed to a sworn denial that complies with Tex. R. Civ. P. 93(10).[2] Since the answer can be amended and the failure to comply with rules 185 and 93(10) can be cured, it is advisable to include two bases for summary judgment, one that can survive a curative amended answer. The two bases should be: (1) the denial is not sworn; and (2) the accompanying admissible evidence proves the plaintiffs’ claim.[3] Editors of the Texas Collections Manual state “Motions for summary judgment will help ferret out those who file answers to buy time from those with genuine defenses and are also great discovery tools. Well drawn summary judgments often require the debtors’ attorneys to have serious talks with their clients about fees, resulting in serious settlement negotiations.”[4]

In a collection case, a no-evidence motion for summary judgment has utility when the debtor defendant files a counterclaim, thereby raising issues for which the debtor defendant has the burden of proof at trial. Should the trial court grant the creditor plaintiff’s traditional motion for summary judgment on the creditor’s collection claim(s) and a debtor defendant’s counterclaim is undisposed, the resulting summary judgment is partial and the creditor cannot pursue execution thereon.[5] The successful creditor plaintiff may move to sever the party, cause or action, or issue, as appropriate, so that the otherwise interlocutory summary judgment may become separate, final and enforceable.[6]

Texas Rule of Civil Procedure 185 provides that a suit on account may be proper:

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 ...[7]

An action brought under Rule 185 is procedural and concerns the evidence necessary to establish a prima facie case of the right to recover.[8] In a suit on account, when a defendant debtor fails to file a proper answer under Rules 185 and 93(10)[9] the plaintiff creditor may secure what is essentially a summary judgment on the pleadings. In effect, noncompliance with these rules concedes that there is no defense.[10]

If the defendant in a suit on account fails to file a written denial under oath, it will not be permitted at trial to dispute the receipt of the items or services or the correctness of the stated charges.[11] As a general rule, a sworn account is prima facie evidence of a debt and the account need not be formally introduced into evidence unless the account’s existence or correctness has been denied in writing under oath.[12]

[1]. Donna Brown, Anatomy of the Collection Process; Nuts & Bolts of Collections 2008, State Bar of Texas (May 7, 2008); see generally, Daniel J. Goldberg, Texas Collections Manual, sec. 12.31–12.34 (3d ed. 2004).

[2]. TEX. R. CIV. P. 185 requires “… a written denial, under oath …”; Tex. R. Civ. P. 93.10 provides that certain matters should be verified by affidavit, including: “A denial of an account which is the foundation of the plaintiff’s action, and supported by affidavit.”

[3]. Brown at 8.

[4]. Id.

5. North East Indep. Sch. Dist. v. Aldridge, 400 S.W.2d at 895 [final judgment required].

[6]. TEX. R. CIV. P. 41 [Any claim against a party may be severed and proceeded with separately]; Guar. Fed. Sav. Bank v. Horseshoe Op. Co., 793 S.W.2d 652, 658 (Tex.1990) [A claim is properly severable if: (1) the controversy involves more than one cause of action; (2) the severed claim is one that would be the proper subject of a lawsuit if independently asserted; and (3) the severed claim is not so interwoven with the remaining action that they involve the same facts and issues].

[7]. TEX. R. CIV. P. 185.

[8]. Rizk v. Fin. Guardian Ins. Agency, Inc., 584 S.W.2d 860, 862 (Tex. 1979); Meaders v. Biskamp, 316 S.W.2d 75, 78 (Tex. 1958); Hou-Tex Printers, Inc. v. Marbach, 862 S.W.2d 188, 190 (Tex. App. - Houston [14th Dist.] 1993, no writ); Achimon v. J.I. Case Credit Corp., 715 S.W.2d 73, 76 (Tex. App. - Dallas 1986, writ ref’d n.r.e.) (noting that assignee of retail installment contact failed to state a sworn account).

[9]. TEX. R. CIV. P. 93(10) (requiring a denial of an account be verified by affidavit).

[10]. 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.); see Hidalgo v. Sur. Sav. & Loan Ass’n, 462 S.W.2d 540, 543 n.1 (Tex. 1971); Waggoners’ Home Lumber Co. v. Bendix Forest Prods. Corp., 639 S.W.2d 327, 328 (Tex. App. - Texarkana 1982, no writ); see also supra Part III.B (discussing pleadings as evidence).

[11]. Vance v. Holloway, 689 S.W.2d 403, 404 (Tex. 1985) (per curiam) (citing Tex. R. Civ. P. 185); Airborne Freight Corp. v. CRB Mktg., Inc., 566 S.W.2d 573, 574 (Tex. 1978) (per curiam) (calling the rule “settled”); Murphy v. Cintas Corp., 923 S.W.2d 663, 665 (Tex. App. - Tyler 1996, writ denied).

[12]. See Airborne Freight Corp., 566 S.W.2d at 575.

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