Court Opinion

ID: 3117131
Source: CourtListenerOpinion
Date Created: 2015-10-16 07:49:11.413046+00
Date Added: 2024-06-11T11:52:53.328406
License: Public Domain

Fourth Court of Appeals
                                     San Antonio, Texas

                                 MEMORANDUM OPINION
                                        No. 04-12-00029-CV

                           HIS INDUSTRIES, INC. d/b/a Technovations,
                                        Appellant

                                                v.
                                    Richard KEIGER and Leticia
                                Richard KEIGER and Leticia Keiger,
                                             Appellees

                     From the 225th Judicial District Court, Bexar County, Texas
                                  Trial Court No. 2010-CI-06066
                             Honorable Richard Price, Judge Presiding

Opinion by:       Karen Angelini, Justice

Sitting:          Karen Angelini, Justice
                  Patricia O. Alvarez, Justice
                  Luz Elena D. Chapa, Justice

Delivered and Filed: June 5, 2013

AFFIRMED

           HIS Industries, Inc. d/b/a Technovations appeals a summary judgment granted in favor of

Richard Keiger and Leticia Keiger.          The summary judgment was granted on the basis of

limitations.     On appeal, HIS Industries contends the trial court erred in granting summary

judgment because the Keigers’ motion did not address each of its claims and the Keigers did not

conclusively establish their limitations defense. We affirm the trial court’s judgment.
                                                                                     04-12-00029-CV

                                          BACKGROUND

       On December 12, 2003, Mr. Keiger signed a contract for the equipment and labor HIS

Industries agreed to provide in installing a custom audio/visual/home entertainment system in the

Keigers’ home, which was under construction. The total cost for the equipment and labor was

$42,436.96. The contract included a line item for programming which stated, “not included —

awaiting final decision on equipment.”

       On December 18, 2003, HIS Industries sent Mr. Keiger an invoice, which included the

costs for the equipment and labor listed in the contract, plus an additional cost of $5,900 for

programming.    The invoice included a credit for a pre-payment, leaving a balance due of

$26,769.50. The job number on the invoice was 0203023, and the invoice stated that it was due

on receipt. On April 2, 2008, HIS Industries sent Mr. Keiger a duplicate invoice.

       On June 23, 2008, HIS Industries sent Mr. and Mrs. Keiger a new invoice for job number

0208359. The invoice contained charges for a service call and programming on June 16, 2008.

The total for this invoice was $413.58.

       On April 8, 2010, HIS Industries filed a lawsuit against the Keigers. HIS Industries

alleged that it performed work for the Keigers in 2003, 2004, 2005 and 2008, for which it was

owed $27,183.08. HIS Industries alleged claims for: (1) breach of contract – suit on sworn

account; (2) breach of contract – substantial performance; and (3) quantum meruit.

       As proof of its sworn account claim, HIS Industries attached the affidavit of Marguerite

Haley, one of the owners of HIS Industries, to its petition. Haley’s affidavit referred to the 2003

contract and the 2008 invoices, which were attached to her affidavit. Haley also referred to a job

register as evidence of the work performed by HIS Industries for the Keigers. The job register

listed entries beginning on August 19, 2003 and included numerous entries throughout 2004 and

a few entries in 2005, ending in June of 2005. The job register also included entries for mileage
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                                                                                      04-12-00029-CV

paid on June 18 & 19, 2008, and salary and wages paid on June 27, 2008. Finally, a letter Haley

sent to the Keigers dated April 2, 2008, was attached to her affidavit. In the letter, Haley referred

to a business reorganization that HIS Industries had undertaken and stated:

               Our records show your account has an outstanding balance which we
       would like to address at your earliest convenience. The project documentation
       indicates that the final walk-through was completed and all punch list items were
       resolved, however, we never received final payment. While our new procedures
       would normally prohibit additional services for you until the account has been
       settled, we will make an exception due to your project being a legacy account
       from our original business entity. Of course, we will expect payment
       arrangements to be made in reciprocation.

       The Keigers subsequently filed a traditional motion for summary judgment. The motion

asserted that the Keigers “will conclusively demonstrate that Plaintiff’s claims against [them] are

barred by the statute of limitations.” The Keigers alleged that the work on their home pursuant

to the contract was completed in 2004. In addition to the December 2003 contract and invoice,

the Keigers attached deposition excerpts from the deposition of Haley to their motion. In her

deposition, the following exchange occurred regarding when the work was complete:

       Q.      …. And as you’ve testified earlier, all of that work was completed in
       2004, correct?
       A.      The equipment was installed in 2004.
       Q.      And that was the purpose of the contract, was to install the equipment,
       correct?
       A.      Yes.
       Q.      Okay. So the contract was completed, everything was done in 2004?
       A.      The contract was not completed as far as the — We didn’t receive
       payment, and we continued to go out and to service the clients with their
       programming changes in hope that they would pay us.
       Q.      In 2005?
       A.      Yes. And also in 2008.
       Q.      Okay. But not in 2006 or 2007?
       A.      No.

Haley testified that work was performed in 2005 in response to the Keigers’ requests for changes

which Haley agreed could be likened to service calls. Haley stated that the work was not

included in the original contract; however, no new invoices were issued for that work.
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                                                                                     04-12-00029-CV

       In their motion, the Keigers asserted that even if the work performed in 2005 extended

the statute of limitations, the four year limitations period would have run at least by the end of

2009, before HIS Industries filed its lawsuit. The Keigers further asserted that the 2008 service

call was not performed pursuant to the December 2003 contract as evidenced by a separate

invoice being sent containing a separate job number. The Keigers prayed for their motion to be

granted as to all three of the claims asserted by HIS Industries.

       In its response to the Keigers’ motion, HIS Industries asserted that the Keigers failed to

address all of their causes of action and failed to file a verified denial of the sworn account. HIS

Industries further asserted that its cause of action was not barred by limitations because the

parties’ dealings continued at least until mid-2008, and the contract was not terminated by either

party before that date. In Haley’s deposition testimony attached to the response to the summary

judgment motion, Haley stated:

       Q.      Okay. Well, your company, HIS Industries, is suing Ricky and Leticia
       Keiger. Can you tell the jury just generally what your allegations are against Mr.
       Keiger and Mrs. Keiger?
       A.      Well, very simple. We performed the service; they didn’t pay.
       Q.      The service you performed was done in 2003, 2004, correct?
       A.      And continued in — Yes, and it continued.
                                                 ***
       Q.      Okay. So this is the invoice that was sent for the equipment that you guys
       installed in 2004?
       A.      Correct.
       Q.      And you said the job was completely finalized and finished out in 2004?
       A.      That’s not what I said. I said the equipment was installed in 2004. We
       continued to go out and service change requests and programming to
       accommodate the Keigers.
       Q.      And that continued through 2005, correct?
       A.      It continued up until 2008.
       Q.      Ma’am, are you testifying here today that every year from 2004 to 2008,
       you and your company — or people from your company were going out to the
       Keiger residence?
       A.      We were there in 2005, and we were there again in 2008.
       Q.      Is there a separate contract for the service?
       A.      No. This is a continuation of the existing installation that was done
       beginning in 2003.
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                                                                                    04-12-00029-CV

Finally, with regard to quantum meruit, HIS Industries asserted, “it is undisputed that the mid-

2008 work [is] within the four year limitations period.”

       The trial court granted summary judgment in favor of the Keigers as to the 2003 contract

and any payment due thereunder; however, the trial court severed the claims by HIS Industries

for payment due under the June 2008 invoice. HIS Industries appeals.

                                     STANDARD OF REVIEW

       We review a ruling on a traditional motion for summary judgment de novo. Valance

Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005); Capital One Bank (USA), N.A. v.

Conti, 345 S.W.3d 490, 491 (Tex. App.—San Antonio 2011, no pet.). A defendant moving for

summary judgment on the affirmative defense of limitations has the burden to conclusively

establish when the cause of action accrued. KPMG Peat Marwick v. Harrison County Hous. Fin.

Corp., 988 S.W.2d 746, 748 (Tex. 1999); Capital One Bank (USA), N.A., 345 S.W.3d at 491. In

reviewing the granting of a traditional summary judgment, we consider all the evidence in the

light most favorable to the respondent, indulging all reasonable inferences in favor of the

respondent, and determine whether the movant proved that there were no genuine issues of

material fact and that it was entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt.

Co., 690 S.W.2d 546, 548-49 (Tex. 1985).

                             SWORN ACCOUNT V. OPEN ACCOUNT

       “As an initial matter, we note that a suit on a sworn account is not an independent cause

of action.” Southern Mgmt. Servs., Inc. v. SM Energy Co., No. 14-12-00377-CV, 2013 WL
793153, at *2 (Tex. App.—Houston [14th Dist.] Mar. 5, 2013, no pet. h.). “It is based instead on

Rule 185, which affords a procedural right of recovery in certain contract disputes.” Id.; see also

Pine Trail Shores Owners Ass’n v. Aiken, 160 S.W.3d 139, 144 (Tex. App.—Tyler 2005, no pet.)

(noting Rule 185 is not a rule of substantive law and suit on sworn account is not a cause of
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                                                                                     04-12-00029-CV

action). Accordingly, the contention by HIS Industries that the Keigers failed to address this

claim is overruled.

       HIS Industries also contends that the trial court erred in granting summary judgment

because the Keigers failed to file a verified denial in response to their sworn account allegations.

The affirmative defense of limitations, however, can be raised even in the absence of a verified

denial. Rizk v. Fin. Guardian Ins. Agency, Inc., 584 S.W.2d 860, 863 (Tex. 1979); Cooper v.

Scott Irr. Const., Inc., 838 S.W.2d 743, 747 (Tex. App.—El Paso 1992, no pet.); Jorrie

Furniture Co. v. Rohm, 442 S.W.2d 476, 478 (Tex. Civ. App.—San Antonio 1969, no writ).

Therefore, the absence of a verified denial did not preclude the trial court from granting

summary judgment based on limitations.

       Accepting that the Keigers cannot dispute their receipt of the equipment and services

rendered by HIS Industries or the correctness of the stated charge, see Rizk, 584 S.W.2d at 863,

the primary dispute between the parties is whether the Keigers’ contract with HIS Industries

created an open account. The elements of an open account are: (1) transactions between the

parties; (2) creating a creditor-debtor relationship through the general course of dealing, (3) with

the account still being open, and (4) with the expectation of further dealing. Capital One Bank

(USA), N.A., 345 S.W.3d at 491. In this case, the creditor-debtor relationship between HIS

Industries and the Keigers did not arise from a general course of dealing involving transactions

between the parties. Instead, HIS Industries and the Keigers entered into a contract for the

installation and programming of an audio/visual/home entertainment system to contain specified

equipment.    Although additional service or programming calls were undertaken after the

installation of the system, these calls were not made pursuant to an open account with on-going

charges but as an accommodation by HIS Industries in an effort to obtain payment under the

parties’ original contract. The absence of an open account is further evidenced by HIS Industries
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                                                                                                  04-12-00029-CV

invoicing the Keigers for a new job number in relation to the 2008 service call. Therefore, we

hold as a matter of law that no open account existed between HIS Industries and the Keigers.

                                      ACCRUAL OF CAUSE OF ACTION

        The four-year statute of limitations applies to the breach of contract/sworn account claim

asserted by HIS Industries. Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002). “A party

asserting a breach of contract claim must sue no later than four years after the day the claim

accrues.” Id. “It is well-settled law that a breach of contract claim accrues when the contract is

breached.” 1 Id.

        In this case, the Keigers breached their contract with HIS Industries when they failed to

pay the amount due after the installation and programming of the system was complete. 2 The

summary judgment evidence conclusively establishes that the installation was complete in 2004,

and the additional programming which could arguably be based on the parties’ contract was

complete in 2005 at the latest. Even assuming the breach of contract claim did not accrue until

2005, HIS Industries did not file its lawsuit until 2010. Accordingly, the lawsuit is barred by the

four-year limitations period. 3

                                              QUANTUM MERUIT

        Although HIS Industries contends the Keigers did not address its quantum meruit claim,

the Keigers alleged that limitations barred all of HIS Industries claims. A four-year limitations

period also applies to a quantum meruit claim. Quigley v. Bennett, 256 S.W.3d 356, 361 (Tex.

1
  The law cited by HIS Industries regarding a claim accruing when the dealings between the parties cease pertains to
an open account. See Capital One Bank (USA), N.A., 345 S.W.3d at 491 (discussing accrual of claim relating to
open account). For the reasons previously stated, we hold that no open account existed between HIS Industries and
the Keigers.
2
  In its brief, HIS Industries suggests that no breach occurred because the parties did not treat the contract as
terminated and no evidence was presented to establish that the Keigers refused to perform. However, the summary
judgment evidence conclusively established that the Keigers failed to pay the amount due in accordance with the
contract after receipt of an invoice stating that payment was due on receipt, and that HIS Industries undertook
additional work in an effort to convince the Keigers to make the payment due under the contract.
3
  We note the trial court severed the claims asserted by HIS Industries relating to the work it performed in 2008.

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                                                                                 04-12-00029-CV

App.—San Antonio 2008, no pet.); Pepi Corp v. Galliford, 254 S.W.3d 457, 461 (Tex. App.—

Houston [1st Dist.] 2007, pet. denied).          Since the last date HIS Industries performed

compensable work in reference to the initial installation and programming of the system was in

2005, this claim would also be barred by limitations for the reasons previously discussed. More

importantly, however, it is well-established that “[r]ecovery on an express contract and on

quantum meruit are inconsistent.” Woodward v. Southwest States, Inc., 384 S.W.2d 674, 675

(Tex. 1964). “Where there exists a valid express contract covering the subject matter, there can

be no implied contract.” Id.; see also San Antonio Masonry & Tool Supply, Inc. v. Epstein &

Sons Int’l, Inc., 281 S.W.3d 441, 445 (Tex. App.—San Antonio 2005, no pet.). In this case, both

the evidence tendered by HIS Industries and its own pleadings prove as a matter of law that an

express contract governed the installation and programming of the system. See San Antonio

Masonry & Tool Supply, Inc., 281 S.W.3d at 446. Therefore, the express contract between the

Keigers and HIS Industries barred the quantum meruit claim.

                                         CONCLUSION

       The trial court’s judgment is affirmed.

                                                       Karen Angelini, Justice

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