Court Opinion

ID: 3121513
Source: CourtListenerOpinion
Date Created: 2015-10-16 14:09:26.77147+00
Date Added: 2024-06-11T12:12:30.514105
License: Public Domain

COURT OF APPEALS
                                 EIGHTH DISTRICT OF TEXAS
                                      EL PASO, TEXAS

 BLUEBONNET FINANCIAL ASSETS,                   §
                                                                No. 08-07-00282-CV
                   Appellant,                   §
                                                                  Appeal from the
 v.                                             §
                                                             County Court at Law No. 5
                                                §
 MARVIN MILLER,                                               of Collin County, Texas
                                                §
                   Appellee.                                    (TC# 005-3458-06)
                                                §

                                          OPINION

       Bluebonnet Financial Services appeals a take-nothing judgment entered in favor of its

debtor, Mr. Marvin Miller. Because we conclude the trial court erred by determining Mr. Miller

filed an answer, we will reverse the take-nothing judgment and render judgment for Bluebonnet

as to liability and liquidated damages.

       Bluebonnet Financial Assets (“Bluebonnet”) filed suit against Marvin Miller in December

2006, for breach of contract, accounts stated, quantum merit, and unjust enrichment, claiming

Mr. Miller was in default on a credit card account the company purchased from Chase Manhattan

Bank. Mr. Miller was cited to appear, but failed to file an answer. On January 29, 2007,

Bluebonnet obtained a default judgment for $15, 256.23, plus reasonable attorney’s fees and

costs, and post judgment interest. Approximately one month later, the trial court set aside the

default judgment by granting an agreed motion for new trial, in which Mr. Miller was ordered to

pay Bluebonnet $750.

       Thereafter the parties exchanged discovery. The case was tried to the bench on July 5,
2007. Mr. Miller appeared through his attorney, but did not offer any evidence in opposition to

the claims. Bluebonnet called one witness during trial, its manager, Steve Niermann.

Mr. Niermann testified that Bluebonnet purchased Mr. Miller’s delinquent credit card account

and was attempting to collect the balance. Mr. Miller’s attorney raised objections to the

documents offered by Bluebonnet as evidence of the account’s chain of title and to

Mr. Niemann’s testimony. At the trial’s close, the court requested briefing from both parties on

the admissibility of the chain of title documents and affidavits.

       On July 31, 2007, Bluebonnet filed a motion to “Strike Defendant’s Post-Trial Original

Answer.” In the motion, Bluebonnet represents Mr. Miller attempted to file an Original Answer

following trial and the post-trial briefing. Other than Bluebonnet’s statement, there is no

evidence of Mr. Miller’s answer contained in the appellate record. There is also no record of any

action on Bluebonnet’s motion to strike. The trial court entered a take-nothing judgment on

August 3, 2007. On August 22, 2007, the trial court entered findings of fact and conclusions of

law in response to Bluebonnet’s request. Contrary to the judgment, however, the trial court’s

findings stated that Mr. Miller owed Bluebonnet over $15,000 on a past due account and $750

for attorney’s fees. Alternatively, the findings stated that Bluebonnet established its right to

recover under its quantum merit and unjust enrichment claims.

       Bluebonnet filed its notice of appeal on August 28, 2007.1 On that same date, Mr. Miller

filed an emergency motion to set aside the trial court’s August 22 findings, or to amend or file

additional findings. The trial court granted Mr. Miller’s motion and set aside its findings on

August 30. On September 5, Bluebonnet filed a second request for findings. According to

       1
           Mr. Miller has not appeared in this appeal.

                                                 -2-
Bluebonnet’s motion, Mr. Miller’s emergency motion was granted without notice or hearing.

When the trial court failed to respond to Bluebonnet’s second request for findings, the entity

timely filed a notice of past due findings. The trial court did not respond to Bluebonnet’s past

due notice.

        This Court abated the appeal for entry of the requested findings on May 1, 2009. We

filed a copy of the court’s findings July 16, 2009, by a supplemental clerk’s record. According to

the trial court’s findings:

                                      FINDINGS OF FACT

        1.      Defendant did file an answer prior to trial.

        2.      Defendant, represented by counsel, did appear at trial.

        3.      On June 5, [sic] 2007, this cause was tried before the Court.

        4.      Plaintiff offered into evidence records which Plaintiff contended
                established the chain of title, the cardholder agreement between Defendant
                and the original creditor and the copies of statements purported to
                establish an amount due and owing. Defendant objected to these
                documents based upon hearsay and that the documents had not been
                authenticated. Defendant’s objections were taken under advisement by the
                Court. After review and reflection, the Court sustains Defendant’s
                objections.

        5.      Plaintiff attempted to authenticate a cardmember agreement through a
                business records affidavit from the custodian of records for Ariel Financial
                Services, a company with no apparent connection to any issue in this
                lawsuit. Defendant’s [sic] objected to the authentication of this
                cardmember agreement by a third-party with no knowledge of the records
                keeping practices of the original creditor. Defendant’s objection was taken
                under advisement by the Court. After review and reflection, the Court
                sustains Defendant’s objection.

        6.      Plaintiff attempted to establish chain of title through two bills of sale,
                neither of which included the Defendant’s name or alleged account
                number. Both bills of sale stated that the accounts that were purchased

                                                 -3-
      were included as Exhibit ‘A’ to the bills of sale, but no Exhibit ‘A’ was
      attached to either bill of sale, making the bills of sale unreliable on their
      face. Further, these bills of sale refer to papers that are not attached
      thereto or served therewith as required by the Texas Rules of Civil
      Procedure. Defendant’s objection was taken under advisement by the
      Court. After review and reflection, the Court sustains Defendant’s
      objection.

7.    Plaintiff called Stephen Niermann, manager of Plaintiff, to testify.

8.    Witness Niermann testified that Defendant Miller opened a credit card
      account with Direct Merchant’s Bank. Defendant objected that Witness
      Niermann did not have personal knowledge of this testimony and that
      there was a lack of foundation. Defendant’s objection was taken under
      advisement by the Court. After review and reflection, the Court sustains
      Defendant’s objection.

9.    Witness Niermann testified that Defendant Miller used Direct Merchant’s
      Banks credit card to make charges on credit. Defendant objected that
      Witness Niermann did not have personal knowledge of this testimony and
      that there was a lack of foundation. Defendant’s objection was taken
      under advisement by the Court. After review and reflection, the Court
      sustains Defendant’s objection.

10.   Witness Niermann testified that Defendant Miller made payments and
      stopped making payments on the account. Defendant objected that witness
      Niermann did not have personal knowledge of this testimony and that
      there was a lack of foundation. Defendant’s objection was taken under
      advisement by the Court. After review and reflection, the Court sustains
      Defendant’s objection.

                          CONCLUSIONS OF LAW

11.   To the extent any of the foregoing findings of fact can be construed to be
      conclusions of law, it is intended that said findings of fact be considered
      conclusions of law and are incorporated herein by reference.

12.   The evidence offered by Plaintiff at trial that was purportedly a
      cardmember agreement was hearsay and was not authenticated by Plaintiff
      at trial and as such was inadmissible evidence. After review and reflection
      of Defendant’s objections to the cardmember agreement, the Court
      sustains Defendant’s objection.

                                        -4-
       13.     The evidence offered by Plaintiff at trial that purportedly established the
               chain of title was unreliable on its face and did not establish ownership of
               the alleged account. Further, the bills of sale refer to papers that are not
               attached thereto or served therewith. After review and reflection of
               Defendant’s objections to the chain of title documents, the Court sustains
               Defendant’s objections.

       14.     The documents offered into evidence by Plaintiff at trial were hearsay and
               were not authenticated by Plaintiff at trial and as such were inadmissible
               evidence.

       15.     The testimony of Witness Niermann was not based upon personal
               knowledge and there was a lack of foundation and as such was
               inadmissible evidence. After review and reflection, the Court sustains
               Defendant’s objections to Witness Niermann’s testimony.

       16.     Plaintiff failed to establish that Defendant owed to Plaintiff any amount
               under a breach of contract or account stated theory.

       17.     Plaintiff further fails to establish that Defendant owed to Plaintiff any
               amount under a Quantum Meruit or unjust enrichment theory.

       18.     Plaintiff has failed to establish that Defendant owed to Plaintiff or that
               Plaintiff was entitled to recover attorney’s fees or court costs.

       19.     Plaintiff failed to establish that Plaintiff is entitled to any pre-judgment or
               post-judgment interest.

       20.     As such, it is ordered that Plaintiff take nothing on all of its claims.

       Signed this 10 day of July, 2009.

       Bluebonnet raises eight issues on appeal. Issues One and Two challenge the trial court’s

entry of judgment in favor of Mr. Miller on the basis that he never answered the suit. In Issue

Three, Bluebonnet contends the trial court erred by excluding the documentary evidence offered

at trial. As a result, in Issue Four Bluebonnet asserts the trial court erred in entering a take-

nothing judgment as the evidence in the record established Mr. Miller’s liability and the amount

of damages as a matter of law. In Issues Five and Six, Bluebonnet contends the trial court erred

                                                  -5-
by failing to comply with its timely request and reminder for findings of fact and conclusions of

law. In Issues Seven and Eight, Bluebonnet contends the trial court erred by entering judgment

for Mr. Miller on its quantum meruit, unjust enrichment, and account stated claims.

         As a preliminary matter, this appeal is before the Court following abatement for entry of

findings of fact and conclusions of law. The record has been duly supplemented and the parties

have had an opportunity to re-brief in light of the findings. Issues Five and Six are now moot,

and are accordingly overruled.

         In Issues One and Two, Bluebonnet contends the trial court erred by granting a take-

nothing judgment on the basis that Mr. Miller failed to file any answer; verified or otherwise, and

therefore admitted the allegations stated in the original petition. These arguments require us to

review the trial court’s conclusion of law number one, in which the court determined Mr. Miller

filed an answer. However, as there is not a formal answer in the record, we must infer that the

trial court determined Mr. Miller’s appearance and filings following the order granting a new

trial, served as a substitute for an answer, and therefore put all of Bluebonnet’s allegations at

issue. So the question before us is whether or not the trial court was correct in its conclusion.

Whether or not Mr. Miller’s actions can serve as an answer substitute is a question of law, which

we review de novo. See Watkins v. Debusk, 286 S.W.3d 58, 62 (Tex.App.--El Paso 2009, no

pet.).

         In its most basic form, i.e., a general denial, a defendant’s answer puts all allegations in

the plaintiff’s petition which are not required to be specially denied at issue. See TEX .R.CIV .P.

92; Shell Chem. Co. v. Lamb, 493 S.W.2d 742, 744 (Tex. 1973). The answer must be written,

signed by the party or the party’s attorney, and filed with the court clerk who issued the citation.

                                                  -6-
See TEX .R.CIV .P. 57, 99(b). Those claims that must be specially denied are defined by Rule 93.

See TEX .R.CIV .P. 93. When a case falls within one of the categories defined by this rule, a

general denial is insufficient; a defendant must provide a verified denial, supported by an

affidavit based on personal knowledge. See TEX .R.CIV .P. 93; Roark v. Stallworth Oil & Gas,

Inc., 813 S.W.2d 492, 494 (Tex. 1991). If a verified denial is required, failure to comply with the

rule relieves the plaintiff if its burden of proof. See Roark, 813 S.W.2d at 494.

        The facts of this case potentially fall into several Rule 93’s categories:2

        (4)     That there is a defect of the parties, plaintiff or defendant.

                                         .         .          .

        (7)     Denial of the execution by himself or by his authority of any instrument in
                writing, upon which any pleading is founded, in while or in part, and
                charged to have been executed by him or by his authority, and not alleged
                to be lost or destroyed. . . . In the absence of such a sworn plea, the
                instrument shall be received in evidence as fully proved.

        (8)     A denial of the genuineness of the indorsement or assignment of a written
                instrument upon which suit is brought by an indorsee or an assignee and in
                the absence of such a sworn plea, the indorsement or assignment therefore
                shall be held as fully proved.

TEX .R.CIV .P. 93(4), (7), and (8).

        By failing to file a verified denial of Bluebonnet’s claims, Mr. Miller conclusively

admitted: (1) the proper parties were before the court; (2) the validity of the credit card

agreement which was the foundation of the suit; and (3) that he was the individual who signed

the agreement creating the account. See TEX .R.CIV .P. 93(4), (7), and (8). Incident to these

        2
          Without an answer to guide us, we are forced to infer what defenses Mr. Miller intended
to assert to defeat Bluebonnet’s claims. Given the nature of the suit, and Mr. Miller’s arguments
during and after trial, we will focus on Paragraphs Four, Seven, and Eight of Rule 93.

                                                  -7-
admissions, Mr. Miller also waived evidentiary objections to the documents. See TEX .R.CIV .P.

93(7) and (8); Boyd v. Diversified Fin. Sys., 1 S.W.3d 888, 891 (Tex.App.--Dallas 1999, no pet.).

Therefore, to the extent the trial court concluded Mr. Miller’s “answer” was a verified answer

which required Bluebonnet to put on proof of the issues discussed above, the trial court erred.

Issue Two is sustained.

       Unlike verified denials, however, Texas courts have traditionally treated a wide variety of

defendants’ responses sufficient to serve as an answer for the purposes of a general denial. See

Smith v. Lippmann, 826 S.W.2d 137, 138 (Tex. 1992)(per curiam); Hock v. Salaices, 982 S.W.2d
591, 593 (Tex.App.--San Antonio 1998, no pet.)(“Indeed, the courts have gone to great lengths to

excuse defects in answers to prevent the entry of default judgments against parties who have

made some attempt, albeit deficient, unconventional, or flat out forbidden under the Rules of

Civil Procedure, to acknowledge that they have received notice of the lawsuit pending against

them.”). This policy choice in favor of construing defensive responses as “answers” is due to the

effect of a defendant’s failure to answer. A non-answering party has admitted all of the

plaintiff’s allegations, except for the amount of damages to be awarded, and is subject to a

default judgment at a time of the plaintiff’s choosing. See TEX .R.CIV .P. 239; Holt Atherton

Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992).

       The vast majority of opinions that address the sufficiency of a defendant’s answer arise

from default judgment cases in which the defendant has responded to the petition with a

document that does meet the requirements of a Rule 83 “Original Answer.” See Hughes v.

Habitat Apts., 860 S.W.2d 872, 873 (Tex. 1993)(default judgment improper as defendant’s

pauper’s affidavit was sufficient to constitute an answer); Lippmann, 826 S.W.2d at 138 (default

                                                -8-
judgment was improperly granted as defendant’s pro se letter to district clerk confirming receipt

of citation constituted an answer); Custom-Crete, Inc. v. K-Bar Servs., Inc., 82 S.W.3d 655, 658

(Tex.App.--San Antonio 2002, no pet.)(letter by non-attorney corporate representative denying

claims was sufficient to avoid default judgment, despite defects in form of answer). In this

instance, we have the reverse scenario. The record does not contain any document, filed by

Mr. Miller, titled “Original Answer.” Indeed the only documents filed by Mr. Miller were: (1)

written pretrial objections to the admission of Bluebonnet’s business records; and (2) his post

trial brief. The only other record document evidencing Mr. Miller’s contest of the claims against

him is the agreed order for new trial, which was signed by his attorney. And yet, the trial court

determined Mr. Miller did file an answer, and entered a take-nothing judgment. Because the trial

court’s conclusion could only be based on one or more of the documents filed by Mr. Miller, we

will review each one to determine if it constitutes an “answer.” See TEX .R.CIV .P. 99(b)

(requiring defendant to file a written answer)(Emphasis added).

       An “answer” is a type of pleading. Rupert v. McCurdy, 141 S.W.3d 334, 339 (Tex.App.--

Dallas 2004, no pet.). Collectively, the pleadings in a case frame the issues which will be

determined at trial, and notify the opposing party of the types of evidence it will be called upon to

produce to prove or defend its case. See id. We have been unable to locate Texas precedent that

treated either a written objection to documentary evidence, or a post-trial brief as a substitute for

an answer. There are no parallels between the purposes served by an answer, and the documents

at issue here. A brief is directed toward the court to present arguments, and aid the court in its

ruling. See generally TEX .R.APP .P. 38.1, 38.2 (outlining the required elements for a brief to the

appellate court). It has no direct impact on the issues to be determined at trial, and is not

                                                 -9-
intended to provide notice to the opposing party. Similarly, while Mr. Miller’s pretrial

evidentiary objections may have notified Bluebonnet that he disagreed about the admissibility of

its business records, the objections did not change or re-frame the ultimate issues before the

court. We conclude, therefore, that neither document can be considered an “answer” as

contemplated by the Rules of Civil Procedure.

        Similarly, we cannot consider the document purportedly sent to Bluebonnet after trial as

an answer. The only reference to Mr. Miller’s post-trial answer in the record is contained in

Bluebonnets motion to strike the same. The document was never filed with the trial court clerk,

and is absent from the appellate record. Even if Mr. Miller had produced such a document on

appeal, we could not consider it because an appellate court cannot consider documents that are

not properly part of the appellate record in its review. See Burke v. Ins. Auto Auctions Corp., 169
S.W.3d 771, 775 (Tex.App.--Dallas 2005, pet. denied).

        We are left with the agreed motion for new trial. The sole purpose of a motion for new

trial is to set aside an existing order; it is not a pleading upon which a case can be tried as it does

not invoke the trial court to take action on the merits of the case. See Pardue v. Confederate Air

Force, 615 S.W.2d 233, 234 (Tex.Civ.App.--Dallas 1980, writ dism’d). For a default defendant,

the new trial presents an opportunity to present a defense. See id. In other words, while the

granting of a motion for new trial presents an opportunity for the parties to present their claims

and defenses, the motion is not a pleading that can prevent a default. See First State Bldg. &

Loan Ass’n. v. B.L. Nelson & Assoc., Inc., 735 S.W.2d 287, 289 (Tex.App.--Dallas 1987, no

writ). Therefore, the agreed motion for new trial filed in this case cannot serve as a basis for the

trial court’s conclusion that Mr. Miller filed an answer. Because none of the documents filed by

                                                 -10-
Mr. Miller constituted an “answer,” the trial court’s conclusion of law stating an answer had been

filed was in error. Mr. Miller failed to file an answer. Issue One is sustained.

       Our conclusion this is a “no-answer” case also resolves Issues Three and Four, in which

Bluebonnet challenges the trial court’s decision to exclude its business record evidence, and

argues it is entitled to judgment for the full amount of the debt based on its, “clear, convincing

and uncontroverted” evidence. Because Mr. Miller wholly failed to answer the suit, he admitted

liability as alleged in the petition, and relieved Bluebonnet of its burden of proof. See

TEX .R.CIV .P. 239; Siddiqui v. West Bellfort Prop. Owners Ass’n., 819 S.W.2d 657, 658

(Tex.App.--El Paso 1991, no pet.); Argyle Mech., Inc. v. Unigus Steel, Inc., 156 S.W.3d 685, 687

(Tex.App.--Dallas 2005, no pet.). Therefore, any potential evidentiary error is moot, and Issues

Three and Four are overruled.

       In Issues Seven and Eight, Bluebonnet contends the trial court erred by concluding it

failed to establish its accounts stated, quantum meruit, and unjust enrichment claims. As in

Issues Three and Four, our conclusion that Mr. Miller did not file an answer will control the

disposition of these points. Bluebonnet’s original petition included claims for breach of contract,

accounts stated, quantum merit, and unjust enrichment. In its conclusions of law, the trial court

held Bluebonnet failed to establish that Mr. Miller was liable to the entity for any of its causes of

action. For the same reasons, the trial court’s conclusion that Mr. Miller filed an answer was in

error, the trial court also erred by concluding Bluebonnet failed to establish its causes of action.

Regardless of whether these claims could be avoided by general or verified denial, by not

answering, Mr. Miller never put Bluebonnet’s liability allegations as to any of the claims at issue.

See Argyle Mech., Inc., 156 S.W.3d at 687. Therefore, his liability on those issues was settled,

                                                 -11-
and all that was left for Bluebonnet to prove was the amount of damages owed. See Herbert v.

Greater Gulf Coast Enters., 915 S.W.2d 866, 872 (Tex.App.--Houston [1st Dist.] 1995, no writ).

Accordingly, Issues Seven and Eight are sustained.

       Having determined the take-nothing judgment was rendered in error, and that Bluebonnet

was entitled to a default judgment, we must determine whether Bluebonnet is also entitled to

rendition on its requested damages. See TEX .R.APP .P. 43.3. Bluebonnet requests that this Court

render judgment for the full amount owing on the account, $15,256.23, plus $750 for attorney’s

fees, plus court costs, plus post judgment interest at a rate of 7.25 percent. Texas Rule of Civil

Procedure 241 provides:

               When a judgment by default is rendered against the defendant . . . if the
       claim is liquidated and proved by an instrument in writing, the damaged shall be
       assessed by the court, or under its direction, and final judgment shall be rendered
       therefore, unless the defendant shall demand and be entitled to a trial by jury.

       A claim is liquidated if the amount of damages can be accurately calculated by the court

from the factual allegations in the petition and written instruments. Aavid Thermal Tech. of

Texas v. Irving I.S.D., 68 S.W.3d 707, 711 (Tex.App.--Dallas 2001, no pet.). Unliquidated

damages are damages that cannot be accurately calculated by the court based on an instrument in

writing, and require the submission of evidence to establish the compensatory amount. See id.

Because the damages in this case are established by the factual allegations in the petition, as well

as the account statements provided by Bluebonnet, we conclude the damages are liquidated and

render judgment for the full amount owing plus attorney’s fees, costs, and post judgment interest.

       Having sustained Issues One, Two, Seven, and Eight, we reverse the trial court’s take-

nothing judgment and render for Bluebonnet in the amount of $15,256.23, plus $750 for

                                                -12-
attorney’s fees, plus court costs, plus post judgment interest at a rate of 7.25 percent.

March 31, 2010
                                               DAVID WELLINGTON CHEW, Chief Justice

Before Chew, C.J., McClure, and Rivera, JJ.

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