Court Opinion

ID: 9381927
Source: CourtListenerOpinion
Date Created: 2023-03-24 07:08:31.49243+00
Date Added: 2024-06-11T17:17:35.813412
License: Public Domain

In The

                           Court of Appeals

               Ninth District of Texas at Beaumont

                          __________________

                         NO. 09-21-00079-CV
                          __________________

               ADRIAN RAFAEL MEJIA, Appellant

                                   V.

       MOBILOIL FEDERAL CREDIT UNION, Appellee
__________________________________________________________________

         On Appeal from the County Court of Law No. 1
                    Jefferson County, Texas
                     Trial Cause No. 135149
__________________________________________________________________

                     MEMORANDUM OPINION

     In this suit to recover a deficiency on a debt, Adrian Rafael Mejia,

the debtor, appeals from a judgment awarding Mobiloil Federal Credit

Union, the creditor, around $13,772 for the deficiency left on the loan.1

     1For  convenience, we have rounded all numbers mentioned in the
opinion other than those we have quoted from exhibits in the record to
whole numbers. Together with the contract damages award, the
judgment the trial court signed includes additional awards for attorney’s
fees, prejudgment and post-judgment interest, and costs of court.
                                    1
In his first issue, Mejia contends that in the summary judgment

proceeding that led to the trial court’s judgment, the trial court erred in

granting Mobiloil’s combined traditional and no-evidence motion for

summary judgment for two reasons. First, he claims Mobiloil failed to

prove he was in default on his loan when Mobiloil accelerated his note.

Second, Mejia argues that a genuine issue of material fact exists on his

affirmative defense that Mobiloil failed to mitigate its damages by

demanding payment from the company that insured his vehicle against

damages before selling it at an auction, which he claims would have also

reduced the outstanding balance he owed Mobiloil on his loan.

     In his second issue, Mejia argues the trial court erred in overruling

his objections to the affidavit of the president of Safety Adjusters, Inc.,

the company that repossessed and stored Mejia’s vehicle. The affidavit is

relevant to Mejia’s claim that his SUV was damaged by water due to

flooding after it was repossessed. In the affidavit, the president of Safety

Adjusters swore that while Mejia’s vehicle was in Safety Adjuster’s

possession, “[t]he condition of the vehicle, when it left Safety Adjusters,

Inc., was the same as when it was recovered by Safety Adjusters, Inc.”

                                     2
       Because the trial court did not err in granting Mobiloil’s combined

motion for summary judgment, we will affirm.

                               Background

       After signing a Retail Installment Contract to obtain a loan, Adrian

Rafael Mejia bought a used SUV from Energy Country Ford. Mejia

financed $39,687 of the vehicle’s cost. Under his loan, Energy Country

Ford had the right to assign the Note to Mobiloil. No one disputes that

Mobiloil acquired the Note from the dealership where Mejia bought his

car.

       The terms of Mejia’s loan required him to repay the loan (with

interest) in seventy-two monthly installments. Mobiloil also acquired a

security interest in Mejia’s SUV, and the loan’s provisions gave Mobiloil

a security interest in Mejia’s SUV to secure “all your promises in it.”

Under the loan, Mejia was in default upon failing to make an installment

payment “when it is due[.]” Mobiloil had other rights under the loan’s

provisions too, including the right to accelerate the loan on Mejia’s

default, demand payment in full, and repossess and sell the SUV.

       The summary-judgment evidence shows that Mejia signed the

Retail Sales Contract in October 2018. The terms of the Retail Sales

                                     3
Contract required Mejia to make monthly loan payments of $683, with

the first payment due on November 22, 2018. A payment was late if not

received by Mobiloil fifteen days after it was due. If more than fifteen-

days late, the agreement required Mejia to pay a late charge of five

percent of the scheduled payment.

     Mejia made his first payment under the Retail Sales Contract—

which was due on November 22—on December 10, 2018. That made his

first payment late. Mejia’s payment history over the life of the loan before

Mobiloil accelerated the debt reflects that Mejia sometimes made his

payments outside the fifteen-day grace period and sometimes paid less

than the scheduled payment he owed on the debt.

     Mejia made ten payments on the loan before August 29, 2019, when

Mobiloil declared the loan in default. As mentioned, Mejia’s December

2018 payment was more than fifteen-days late, but that payment didn’t

include the five percent late-charge penalty. Mejia’s April 2019 payment

was also late, and when he made that payment, he paid less than half his

regularly scheduled payment that month. While Mejia’s made his May

2019 payment on time, he didn’t pay the $683 under his payment

schedule for that month. Instead, he paid around half that amount. Had

                                     4
Mejia made timely payments of $683 in the ten months before Mobiloil

accelerated the debt, Mejia would have paid around $6830 in principal

and interest on the loan, not including late charges and fees. When

Mobiloil accelerated the loan Mejia had paid Mobiloil just $6193 in

principal and interest on the loan, not including late charges and fees.

     After Mejia failed to cure the deficiency, Mobiloil repossessed the

SUV. Mobiloil advised Mejia the SUV would be sold “sometime after

09/27/2019[,]” and that if Mejia needed to remove anything from the

vehicle, he should contact Safety Adjusters and arrange to remove his

possessions from the vehicle before it was sold. Mejia arranged to remove

his property from the SUV, and in an affidavit that Mejia filed just four

days before the trial court granted Mobiloil’s motion, Mejia swore:

     When I reached the vehicle, I personally observed a water line
     indicating the vehicle had been partially submerged in water.
     In addition, when I observed the interior of the vehicle, the
     vehicle had moldy, wet smell and the interior of the vehicle
     was damp. My personal belongings had also been damaged by
     water.

     In November 2019, Mobiloil advised Mejia that although it had sold

the SUV, it received less money from the sale than he owed on his loan.

According to Mobiloil’s letter, Mejia owed Mobiloil $13,797 after Mobiloil

                                    5
had accounted for the proceeds from the sale ($23,200), the expenses

Mobiloil incurred for repossessing and selling the SUV ($750), and the

refund Mobiloil received from Energy Country Ford for the premium

Mejia paid on a GAP and Extended Warranty policy ($1,781), which

Mejia bought when he purchased the SUV from Energy Country Ford.

     In March 2020, Mobiloil sued Mejia for breaching the Retail Sales

Contract. It sought to recover the amount it claimed Mejia owed it on the

loan ($13,772), prejudgment interest under the contract on that amount,

and attorney’s fees. 2 After Mejia answered, Mobiloil moved for summary

judgment, alleging the evidence showed Mejia defaulted on the loan and

that as of January 3, 2020, he owed Mobiloil $13,772 plus 7.5 percent

interest as provided by the contract. Mobiloil filed exhibits to support its

motion, including the affidavit of Shellye Kimler, Mobiloil’s records

custodian, and eight pages of records that Mobiloil kept in the regular

course of business on Mejia’s loan. Kimler swore that Mejia failed to pay

Mobiloil as agreed under the terms that applied to Mejia’s loan. She also

     2It’snot clear from the record why Mobiloil told Mejia his deficiency
was $13,797 in its letter of November 2019 but then sued him for $13,772,
twenty-five dollars less, in March 2020.
                                    6
swore that as of January 3, 2020, the outstanding balance on Mejia’s loan

was $13,772.

     Although Mejia responded to Mobiloil’s motion, he didn’t file

evidence to support his response. Mejia also amended his answer, raised

two affirmative defenses, and filed counterclaims. As affirmative

defenses, Mejia alleged Mobiloil breached the Retail Sales Contract first

and failed to mitigate its damages by notifying Mejia’s GAP insurer that

his SUV had been damaged in a flood. As counterclaims, Mejia alleged

Mobiloil (1) breached the contract by “unilaterally modifying the

contract’s repayment terms,” (2) negligently failed to ensure that his

vehicle was protected from being damaged by water due to flooding while

it was in Safety Adjusters’ possession, (3) negligently entrusted the

vehicle to Safety Adjusters, (4) negligently failed to notify his GAP

insurer of damage caused by the flood so the insurance proceeds under

the GAP policy could offset the outstanding balance that he owed Mobiloil

on the loan, and (5) engaged in unfair debt collection practices (a) by

collecting interest, fees, charges or expenses that were not authorized by

the Retail Sales Contract, (b) by modifying the terms of the agreement,

                                    7
and (c) by accelerating the debt based on his alleged noncompliance with

the change Mobiloil unilaterally made in the contract’s terms.

     Months later, Mobiloil filed an amended combined traditional and

no-evidence motion for summary judgment. The exhibits filed to support

the combined motion include Kimler’s affidavit, Mobiloil’s business

records, the Retail Sales Contract, Mejia’s Answers to Mobiloil’s

Interrogatories and Requests for Admission, the affidavit of Mobiloil’s

attorney, and the affidavit of Lawrence Ray (the president of Safety

Adjusters, Inc.).

     Four days before the trial court conducted the hearing on Mobiloil’s

combined motion for summary judgment, Mejia responded to Mobiloil’s

amended motion. In his response, Mejia objected to Ray’s affidavit,

claiming the statements Ray made in his affidavit were not based on his

personal knowledge and constituted hearsay because Ray didn’t

personally observe the flood that Mejia alleged had damaged his car and

because Ray failed to state he had personally inspected Mejia’s SUV.

Mejia also asked the trial court to allow more time for discovery, arguing

that by objecting to the discovery he served on Mobiloil, Mobiloil had

interfered with his ability to show whether the GAP insurance on his

                                    8
SUV would have covered the damages to his SUV when it was on Safety

Adjusters’ lot. According to Mejia, any payments Mobiloil might have

received under his GAP policy would have reduced the remaining balance

on his loan after it was sold at auction had Mobiloil notified the GAP

insurer of the flood event that had damaged his SUV while it was on

Safety Adjusters’ lot.

     Mejia also argues the discovery he wanted and was entitled to have

Mobiloil produce would have revealed facts that were relevant to his

counterclaims and affirmative defenses, specifically his claim that

Mobiloil breached the contract first and his claim that Mobiloil engaged

in unlawful debt collection practices in collecting the debt. Finally, in the

unsworn declaration attached to his response, Mejia states that on the

day Mobiloil repossessed his vehicle, he “had made all payment that had

become due on the vehicle.” As to the alleged damage to his SUV from

the flood, he declared that while retrieving personal items from the SUV

on Safety Adjusters’ lot, he “observed a water line indicating that the

vehicle had been partially submerged in water.” Mejia also stated in his

declaration that when he saw the SUV in Safety Adjusters’ lot, the

interior of the SUV was “damp” and it had “a moldy, wet smell.”

                                     9
     On January 11, 2021, the trial court heard Mobiloil’s combined

traditional and no-evidence motion for summary judgment by

submission. It found $13,772 was due and owing under the Retail Sales

Contract on Mejia’s loan. In its judgment, the court awarded Mobiloil

$13,772 on its breach of contract claim, attorney’s fees, prejudgment

interest, post-judgment interest, and court costs. The judgment states”

[a]ll relief not expressly given is denied,” and the judgment contains

language indicating the trial court intended its judgment to be final.

Mejia filed a motion for new trial, but it was overruled by operation of

law. This appeal followed.

                           Standard of Review

     Mobiloil’s traditional motion for summary judgment addressed its

breach of contract claim. The no-evidence section of its motion for

summary judgment addressed Mejia’s affirmative defenses and

counterclaims.

     We apply a de novo standard to review rulings granting motions for

summary judgment. 3 When, as here, the trial court didn’t specify the

     3Lightning Oil   Co. v. Anadarko E&P Onshore, LLC, 520 S.W.3d 39,
45 (Tex. 2017).
                                   10
exact basis for its ruling, we must affirm the “summary judgment if any

of the grounds asserted are meritorious.” 4 In our review, we are restricted

to considering the arguments the nonmovant presented to the trial court

in its written motion or response. 5

     Mobiloil combined their traditional and no-evidence motions into a

single hybrid motion for summary judgment. 6 In one section of its hybrid

motion, Mobiloil asserted that Mejia could produce no evidence to support

his affirmative defenses of prior material breach and his claim that

Mobiloil failed to mitigate its damages. In another, it alleged Mejia could

produce no evidence to support his counterclaims alleging Mobiloil

breached the contract by modifying its terms, negligently failed to protect

the SUV, negligently entrusted the SUV to Safety Adjusters, or

negligently failed to act on his behalf to contact his GAP insurer since it

     4Id.
     5McConnell    v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 343
(Tex. 1993).
      6Motions for traditional summary judgment, filed under Rule

166a(a) or (b), may be combined with Rule 166a(i) no-evidence motions in
what are often called hybrid motions for summary judgment. Binur v.
Jacobo, 135 S.W.3d 646, 650-51 (Tex. 2004); see also City of Magnolia 4A
Econ. Dev. Corp. v. Smedley, 533 S.W.3d 297, 299 (Tex. 2017) (per
curiam).
                                  11
was not Mejia’s agent and since the SUV was not damaged in a flood.

Mobiloil also alleged there was no evidence that it engaged in any unfair

debt collection practices by charging interest, a fee, a charge, or an

expense that was not authorized under the Retail Sales Contract.

     In appeals from hybrid motions, we first decide whether the trial

court’s ruling on the no-evidence part of the hybrid motion may be

sustained before addressing the trial court’s ruling on the traditional

section of the motion. 7 In no-evidence motions, the motion must allege

that no evidence supports one or more of the essential elements of a

party’s defense. 8 Thus, the motion must state “the elements as to which

there is no evidence.” 9 When the motion contains the required no-

evidence allegations, the burden of proof shifts to the defendant to

produce evidence “raising an issue of material fact as to the elements

     7Crescent  Terminals, LLC v. Saybolt, LP, No. 09-16-00386-CV, 2018
Tex. App. LEXIS 1109, at *9 (Tex. App.—Beaumont Feb. 8, 2018, no pet.);
Flores v. City of Liberty, 318 S.W.3d 551, 553 (Tex. App.—Beaumont
2010, no pet.).
      8Tex. R. Civ. P. 166a(i).
      9Id.

                                   12
specified in the motion.” 10 When deciding the no-evidence motion, the

trial court must grant the motion if

     (a) there is a complete absence of evidence of a vital fact, (b)
     the court is barred by rules of law or of evidence from giving
     weight to the only evidence offered to prove a vital fact, (c) the
     evidence offered to prove a vital fact is no more than a mere
     scintilla, or (d) the evidence conclusively establishes the
     opposite of the vital fact. 11

     “A traditional motion for summary judgment requires the moving

party to show that no genuine issue of material fact exists and that it is

entitled to judgment as a matter of law.” 12 In reviewing summary-

judgment evidence, we “take as true all evidence favorable to the

nonmovant, and we indulge every reasonable inference and resolve any

doubts in the nonmovant’s favor.” 13

                                 Analysis

     We begin with Mejia’s arguments challenging the trial court’s no-

evidence rulings. Under Rule 166a(i), the Rule of Procedure that applies

to no-evidence motions, a party may file a no-evidence motion for

     10Mack    Trucks v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006).
      11King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003).
      12City of Richardson v. Oncor Elec. Delivery Co. LLC, 539 S.W.3d

252, 258 (Tex. 2018); see also Tex. R. Civ. P. 166a(c).
      13Hillis v. McCall, 602 S.W.3d 436, 440 (Tex. 2020) (cleaned up).

                                    13
summary judgment after there has been “adequate time for

discovery[.]” 14 The record shows that when Mobiloil sued, it designated

the case as a Level 1 discovery case. 15 The case had been on file for over

eight months when Mobiloil filed its hybrid motion for summary

judgment. Because Mobiloil first served Mejia with discovery on April 14,

2020, the discovery period in the case ended on October 11, 2020. The

Clerk’s Record doesn’t show that Mejia filed a motion asking the trial

court to rule on Mobiloil’s objections or to compel Mobiloil to answer the

discovery that Mejia complains Mobiloil failed to answer.

     When a party fails to produce evidence raising a fact issue on the

elements of the claims the opposing party challenged in a no-evidence

motion, the Rules of Procedure requires the trial court to “grant the

motion[.]” 16 Even though Mejia filed a response to Mobiloil’s hybrid

motion, he filed it less than seven days before the hearing and without

     14Tex.  R. Civ. P. 166a(i).
     15See id. 190.2 (providing that in Level 1 discovery cases, the

discovery period “begins when the suit is filed and continues until 180
days after the date the first request for discovery of any kind is served on
a party”).
     16Id. 166a(i).

                                    14
leave of court. 17 As mentioned, Mejia filed his response to Mobiloil’s

hybrid motion just four days before the hearing. Nothing in the record

shows that Mejia obtained leave of court to file a late response to

Mobiloil’s hybrid motion. Furthermore, while the trial court’s judgment

reflects the court considered the evidence “supporting” Mobiloil’s motion,

the judgment is silent about whether the court considered the evidence

Mejia attached to his late-filed response. Given Mejia’s failure to obtain

the trial court’s permission to file a late response and the fact the record

does not show the trial court considered his late-filed response in ruling

on Mobiloil’s motion, we presume the trial court didn’t consider the

evidence Mejia attached to his response when it granted Mobiloil’s hybrid

motion and denied Mejia relief on his affirmative defenses and

counterclaims. 18 And since the trial court did not have to consider the

evidence Mejia attached to his late-filed response, the trial court did not

     17Id.166a(c) (“Except on leave of court, the adverse party, not later
than seven days prior to the day of the hearing, may file and serve
opposing affidavits or other written response.”).
     18See INA of Texas v. Bryant, 686 S.W.2d 614, 615 (Tex. 1985)

(where the summary-judgment response was untimely and nothing in
the record signified the late filing was with leave of court, “we must
presume that the trial court did not consider it”).
                                    15
err in granting Mobiloil’s no-evidence part of Mobiloil’s motion because

Mejia produced no evidence to support his affirmative defenses or his

counterclaims. 19

     Next, we turn to Mejia’s complaints about the trial court’s ruling

granting the traditional part of Mobiloil’s hybrid motion, which

addressed Mobiloil’s breach of contract claim. As to that part of Mobiloil’s

hybrid motion, Mejia argues that Kimler’s affidavit and the business

records she verified didn’t “conclusively establish that [he] breached the

contract.” Mejia also points to the statement in his unsworn declaration

stating he “made all payments required under the contract.” But not only

does the summary-judgment evidence show that Mejia’s unsworn

declaration is false, we must presume the trial court didn’t consider it for

the reasons already discussed. 20

     Still, to affirm the judgment, we must explain why Mejia’s

argument claiming that Mobiloil’s evidence is insufficient to prove he

breached his promises under the Retail Sales Contract lacks merit. The

evidence before the trial court shows Mejia failed to make each of the

     19Tex.   R. Civ. P. 166a(i).
     20Id.   166a(c).
                                    16
installment payments when they were due. There is no evidence that

contradicts Mobiloil’s evidence showing that some of Mejia’s payments,

including his June 2019 payment, were late. The evidence also shows

Mejia was behind on his payments when Mobiloil declared the loan in

default and accelerated the loan. The statements in Kimler’s affidavit are

supported by the business records that Mobiloil maintained on Mejia’s

loan. Mejia didn’t present any evidence to create a fact issue to show that

he was not in default when Mobiloil accelerated the loan. Mobiloil’s

business records show Mejia failed to make each scheduled payment on

time and in the amount called for in the payment schedule on his loan,

including the June 22nd payment Kimler identified in her affidavit. We

conclude Mobiloil met its summary-judgment burden to prove that Mejia

breached the payment promises he made on his loan, promises that were

material to his right to prevent Mobiloil from declaring the loan in default

and from accelerating the debt on the loan.

     Mejia raises no other arguments claiming Mobiloil didn’t prove its

breach of contract claim. For example, he doesn’t complain the Mobiloil’s

proof isn’t sufficient to prove the contract damages Mobiloil suffered

under the contract were $13,772, nor does he challenge the trial court’s

                                    17
awards for prejudgment interest, for the attorney’s fees for the trial

($7,500), or for the attorney’s fees for the appeal ($7,500).

     Mejia’s last argument supporting his first issue complains the trial

court abused its discretion in denying his request for more time to

conduct discovery. Mejia suggests he needed more time to investigate the

claims and defenses he raised in his pleadings. But Mejia’s request for

more time is in his late-filed response to Mobiloil’s hybrid motion. We

have already explained why the trial court was not required to consider

his late-filed response.

     But we recognize that in August 2020, in responding to a motion for

summary judgment that Mobiloil never set for hearing and later

abandoned, Mejia complained that Mobiloil had lodged objections to his

discovery requests and had not answered his discovery. Still, all Mejia

did in responding to Mobiloil’s earlier motion for summary judgment was

complain he didn’t have the answers he needed to respond to the initial

motion for summary judgment that Mobiloil filed in August 2020, a

motion it later abandoned by amending. For instance, Mejia neither

asked the trial court to compel Mobiloil to answer his discovery in his

response, nor did he file a motion to compel and ask the court to compel

                                    18
Mobiloil to rule on Mobiloil’s objections and answer his discovery. In

December 2020, Mobiloil abandoned its earlier motion for summary

judgment by filing the hybrid motion for summary judgment, which is

the motion at issue in this appeal.

     As to the GAP policy Mejia purchased, it seems unlikely to us that

the discovery of a GAP policy would have led to relevant evidence

anyway, since “GAP Insurance is insurance to reimburse the retail buyer

for the amount computed by subtracting the proceeds of the insured’s

basic collision policy on the motor vehicle from the amount owed on the

vehicle if the vehicle has been rendered a total loss.” 21 The evidence

shows the sale of the SUV covered a substantial portion of the unpaid

balance Mejia owed on his loan. He also never alleged or argued the

damages from the flood resulted in the SUV suffering a total loss. Finally,

the discovery period for this Level 1 case ended in October 2020, so by

January 2021 when the trial court conducted the hearing on Mobiloil’s

hybrid motion, the discovery period had ended.

     21Riversv. Charlie Thomas Ford, Ltd., 289 S.W.3d 353, 355 fn 1
(Tex. App.—Houston [14th Dist.] 2009, no pet.) (citing Tex. Fin. Code
Ann. § 348.208(b)(4)).
                                19
     “When a party contends that it has not had an adequate

opportunity for discovery before a summary judgment hearing, it must

file either an affidavit explaining the need for further discovery or a

verified motion for continuance.” 22 The record does not show that Mejia

filed a motion to continue the January 2021 hearing the trial court held

on Mobiloil’s hybrid motion for summary judgment. So not only did Mejia

fail to exercise diligence in seeking to obtain the discovery he claims he

needed, he also didn’t follow the requirements of the Rules of Civil

Procedure by filing a verified motion for continuance or an affidavit

explaining why he needed a continuance of the hearing. 23

     In Mejia’s second issue, he argues the trial court erred in overruling

his objections to the affidavit of Lawrence Ray, the president of Safety

Adjusters. Mejia raised these objections in his late-filed response.

Because the record doesn’t affirmatively show the trial court considered

the late-filed response, we must presume it did not. Besides, the only

matter Ray addressed in his affidavit was whether Mejia’s SUV had been

     22Tenneco Inc.  v. Enter. Prods. Co., 925 S.W.2d 640, 647 (Tex. 1996);
see also Tex. R. Civ. P. 166a(g), 251, 252.
      23Tex. R. Civ. P. 251.

                                     20
damaged by water while on Safety Adjusters’ lot. And since Mejia’s only

evidence supporting that claim is his unsworn declaration, which he filed

with a response the trial court didn’t consider, Ray’s affidavit is

irrelevant to the facts on which the judgment is based.

                                 Conclusion

     Having addressed why Mejia’s arguments challenging the trial

court’s rulings lack merit, we overrule Mejia’s issues. For the reasons

explained above, the trial court’s judgment is

     AFFIRMED.

                                             _________________________
                                                  HOLLIS HORTON
                                                       Justice

Submitted on September 14, 2022
Opinion Delivered March 23, 2023

Before Golemon, C.J., Horton and Johnson, JJ.

                                   21