Court Opinion

ID: 4072456
Source: CourtListenerOpinion
Date Created: 2016-09-30 02:52:21.595973+00
Date Added: 2024-06-11T14:32:27.600919
License: Public Domain

ACCEPTED
                                                                                                  01-15-00210-CV
                                                                                       FIRST COURT OF APPEALS
                                                                                               HOUSTON, TEXAS
                                                                                            10/23/2015 3:29:52 PM
                                                                                            CHRISTOPHER PRINE
                                                                                                           CLERK

                                      Case No. 01-15-00210-CV

                                                                                 FILED IN
                                                                          1st COURT OF APPEALS
                                 IN THE FIRST COURT OF APPEALS                HOUSTON, TEXAS
                                        HOUSTON, TEXAS                    10/23/2015 3:29:52 PM
                                                                          CHRISTOPHER A. PRINE
                                                                                   Clerk
                                  Francisco Calleja-Ahedo, Appellant

                                                    v.

                                       Compass Bank, Appellee

                                      From Cause No. 2014-22168
                            55th Judicial District Court, Harris County, Texas

                                            Appellee’s Brief

                                                 HIRSCH & WESTHEIMER, P.C.

                                                 By: /s/ Michael D. Conner
                                                   Michael D. Conner
                                                   State Bar No. 04688650
                                                   mconner@hirschwest.com
                                                   William P. Huttenbach
                                                   State Bar No. 24002330
                                                   phuttenbach@hirschwest.com
                                                   1415 Louisiana, 36th Floor
                                                   Houston, Texas 77002
                                                   Telephone: (713) 220-9162
                                                   Facsimile: (713) 223-9319

                                                 Attorneys for Appellee, Compass Bank

       Appellant requested oral argument. Appellee also request to be heard.

930505.20140273/2253328.1
                                         TABLE OF CONTENTS

TABLE OF AUTHORITIES ................................................................................... iii

Statement of the Case.................................................................................................1

Appellant’s Issues [Restated].....................................................................................2

Statement of Facts ......................................................................................................2

Standard of Review ....................................................................................................7

  Summary Judgment ................................................................................................7
   A. Generally .......................................................................................................7
   B. Traditional Summary Judgment ....................................................................7
   C. Evidentiary Rulings .......................................................................................8
   D. Contract Interpretation ..................................................................................8
   E. Harmless Error ............................................................................................10

Summary of Argument ............................................................................................10

Argument and Authorities........................................................................................13

     I.           Appellant’s Failure to Inquire for 18 Months Is Negligent
                  as a Matter of Law ...............................................................................13

     II.          The Deposit Contract and Section 4.406.............................................22

                  The February 2012 Deposit Agreement Governs the Account. ..........24

                  Compass Bank made statements available in accordance with the
                  contract. ...............................................................................................27

     III.         As Prevailing Party Compass Bank is Entitled to Recover
                  Attorneys’ Fees....................................................................................32

     IV.          Appellant Failed to Conclusively Establish Entitlement to
                  Summary Judgment .............................................................................36

                                                             i
Conclusion ...............................................................................................................38

Prayer .......................................................................................................................40

Certificate of Compliance ........................................................................................41

Certificate of Service ...............................................................................................41

Appendix ..................................................................................................................42

                                                              ii
                                   TABLE OF AUTHORITIES
Cases
Aetna Life & Casualty Co. v. Hampton State Bank
 497 S.W.2d 80 (Tex. Civ. App.—Dallas 1973, no pet.) ......................................20

Am. Airlines Employees Fed. Credit Union v. Martin,
 29 S.W.3d 86 (Tex. 2000).............................................................................. 31, 33

Am. Tobacco Co., Inc. v. Grinnell,
 951 S.W.2d 420 (Tex. 1997) ..................................................................................8

Bank of Tex. v. VR Elec., Inc.,
 276 S.W.3d (Tex. App.—Houston [1st Dist.] 2008, pet. denied) ..... 16, 19, 20, 22

Barfield v. Howard M. Smith Co. of Amarillo,
 426 S.W.2d 834 (Tex. 1968) ......................................................................... 10, 14

Berry v. Encore Bank
 2015 WL 3485970
 (Tex. App.—Houston [1st Dist.] June 2, 2015, no. pet. h.)..............................7, 38

Canfield v. Bank One, Tex., N.A.,
 51 S.W.3d 828 (Tex. App.—Texarkana 2001, pet. denied) .................................21

Carpenter v. Cimarron Hydrocarbons Corp.,
 98 S.W.3d 682 (Tex. 2002).....................................................................................8

Cathey v. Booth,
 900 S.W.2d 339 (Tex. 1995) ..................................................................................8

City of Laredo v. Montano,
 414 S.W.3d 731 (Tex. 2013) ................................................................................35

Coker v. Coker,
 650 S.W.2d 391 (Tex. 1983) ..................................................................................8

                                                      iii
Coleman v. Bhd. State Bank,
 3 Kan. App. 2d 162, 592 P.2d 103 (1979) ............................................................15

Compton, Ault & Co. v. Marshall,
 88 Tex. 50, 29 S.W. 1059 (Tex. 1895) .................................................................21

Contractors Source, Inc. v. Amegy Bank Nat’l Ass’n,
 462 S.W.3d 128 (Tex. App.—Houston [1st Dist.] 2015, no pet.) ................. 21, 22

Derr Constr. Co. v. City of Houston,
 846 S.W.2d 854 (Tex. App.—Houston [14th Dist.] 1992, no writ) .......................9

Downer v. Aquamarine Operators, Inc.,
 701 S.W.2d 238 (Tex. 1985) ..................................................................................8

E.I. Du Pont De Nemours & Co. v. Shell Oil Co.,
  259 S.W.3d 800 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) .................35

El Apple I, Ltd. v. Olivas,
  370 S.W.3d 757 (Tex. 2012) ........................................................................ 35, 36

El Paso Field Services, L.P. v. MasTec N. Am., Inc.,
  389 S.W.3d 802 (Tex. 2012) ............................................................................9, 31

Fullick v. City of Baytown,
 820 S.W.2d 943 (Tex. App.—Houston [1st Dist.] 1991, no writ) .......................27

Gramen Farm, LLC v. Huyen Nguyen,
 01-13-00569-CV, 2014 WL 4374120
 (Tex. App.—Houston [1st Dist.] Sept. 4, 2014, no pet.) ......................................31

HECI Exploration Co. v. Neel,
 982 S.W.2d 881 (Tex. 1998) ................................................................................14

Highland Capital Mgmt., L.P. v. Ryder Scott Co.,
 402 S.W.3d 719 (Tex. App.—Houston [1st Dist.] 2012, no pet.) ..........................8

                                                      iv
Howard v. Faberge, Inc.,
 679 S.W.2d 644 (Tex. App.—Houston [1st Dist.] 1984, writ refused n.r.e.) ......10

Italian Cowboy Partners v. Prudential Ins. Co.,
  341 S.W.3d 323 (Tex. 2011) ..................................................................... 9, 10, 31

J.M. Davidson, Inc. v. Webster,
  128 S.W.3d 223 (Tex. 2003) ................................................................................31

Kennamer v. Estate of Noblitt,
 332 S.W.3d 559 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) ...............7, 8

Khalilnia v. Fed. Home Loan Mortg. Corp.,
 01-12-00573-CV, 2013 WL 1183311
 (Tex. App.—Houston [1st Dist.] Mar. 21, 2013, pet. denied)..............................27

K-Mart Corp. v. Honeycutt,
 24 S.W.3d 357 (Tex. 2000).....................................................................................8

Leax v. Leax,
  305 S.W.3d 22 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) .....................8

Long v. Griffin
 442 S.W.3d 253 (Tex. 2014) ......................................................................... 35, 36

Lyle v. Jane Guinn Revocable Trust,
  365 S.W.3d 341 (Tex. App.—Houston [1st Dist.] 2010, pet. denied) .................10

McCraw v. Maris,
 828 S.W.2d 756 (Tex. 1992) ................................................................................10

Mid-Century Ins. Co. v. Ademaj,
 243 S.W.3d 618 (Tex. 2007) ..................................................................................7

Miller v. Raytheon Aircraft Co.,
 229 S.W.3d 358, 365-66 (Tex. App.—Houston [1st Dist.] 2007, no pet.) ..........26

                                                       v
Myrick v. Nat'l Sav. & Trust Co.,
 268 A.2d 526 (D.C. 1970) ....................................................................................15

RGS, Cardox Recovery, Inc. v. Dorchester Enhanced Recovery Co.,
 700 S.W.2d 635, 638 (Tex. App.—Corpus Christi 1985, writ ref’d n.r.e.) ...........9

Rogers v. Rogers,
 01-90-00852-CV, 1991 WL 179620
 (Tex. App.—Houston [1st Dist.] Sept. 12, 1991, writ denied)...............................9

Schlumberger Tech. Corp. v. Swanson,
  959 S.W.2d 171 (Tex. 1997) ................................................................................14

Seagull Energy E & P, Inc. v. Eland Energy, Inc.,
  207 S.W.3d 342 (Tex. 2006) ................................................................................31

Sonerra Resources Corp. v. Helmerich & Payne Int’l Drilling Co.,
  01-11-00459-CV, 2012 WL 3776428
  (Tex. App.—Houston [1st Dist.] Aug. 30, 2012, no pet. h.) ...........................9, 10

Stauffer v. Henderson,
  801 S.W.2d 858 (Tex. 1990) ................................................................................31

Stucki v. Noble,
  963 S.W.2d 776 (Tex. App.—San Antonio 1998, pet. denied)............................26

Terry v. Puget Sound Nat. Bank,
  80 Wash. 2d 157, 492 P.2d 534 (1972) ................................................................15

Tex. Workers’ Comp. Comm’n v. Patient Advocates,
  136 S.W.3d 643 (Tex. 2004) ............................................................................7, 38

Union Planters Bank, Nat. Ass'n v. Rogers,
 912 So. 2d 116 (Miss. 2005) .................................................................................15

Valence Operating Co. v. Dorsett,
 164 S.W.3d 656 (Tex. 2005) ..................................................................................8

                                                      vi
Vega v. Compass Bank,
 04-13-00383-CV, 2014 WL 953466
 (Tex. App.—San Antonio Mar. 12, 2014, no pet.) ...............................................35

Via Net v. TIG Ins. Co.,
  211 S.W.3d 310 (Tex. 2006) ................................................................................14

Wagner & Brown, Ltd. v. Horwood,
 58 S.W.3d 732 (Tex. 2001)...................................................................................14

Waite v. BancTexas-Houston, N.A.,
 792 S.W.2d 538 (Tex. App.—Houston [1st Dist.] 1990, no writ) .......................26

Westport Bank & Trust Co. v. Lodge,
 164 Conn. 604, 325 A.2d 222 (1973) ...................................................................15

Whitney Nat. Bank v. Baker,
 122 S.W.3d 204 (Tex. App.—Houston [1st Dist.] 2003, no pet.) ........................31

Statutes
Tex. Bus. & Com. Code § 1.201(b)(20) ..................................................................21

Tex. Bus. & Com. Code § 3.406 (a) ................................................................ passim

Tex. Bus. & Com. Code 4.103(a) ..................................................................... 23, 28

Tex. Bus. & Com. Code 4.406 ......................................................................... passim

Tex. Bus. & Com. Code §§ 3.101–605 ....................................................................22

Tex. Civ. Prac. & Code § 37.009 .............................................................................36

Tex. Civ. Prac. & Code § 38.001 .............................................................................36

                                                     vii
Tex. Fin. Code Ann. § 34.302 (a) ..................................................................... 24, 25

Tex. Fin. Code § 34.301 (a) ........................................................................ 14, 29, 31

Rules
Tex. R. App. P. 44.1.................................................................................................10

Tex. R. App. P. 9.4(e) ..............................................................................................41

Tex. R. App. P. 9.4(i) ...............................................................................................41

Tex. R. Civ. P. 166a (c) .............................................................................................7

Tex. R. Evid. 902(10)........................................................................................ 26, 27

Other Authority

Black’s Law Dictionary 284 (7th ed. 2001) ............................................................35

                                                         viii
                             Statement of the Case

Nature of the Case          Appellant Calleja-Ahedo sued Compass Bank because
                            it did not refund payment of an allegedly forged check
                            that Appellant did not report to Compass Bank for
                            more than 18 months

Trial Court                 55th Judicial District Court, Harris County, Texas, the
                            honorable Jeff Shadwick presiding

Course of Proceedings       The case was decided in favor of Compass Bank on
                            cross motions for summary judgment

Trial Court’s Disposition   In its Final Summary Judgment On All Claims By and
                            Between Plaintiff and Compass Bank signed
                            December 8, 2014 (CR735-37) the trial court entered
                            a take nothing judgment on all of Appellant’s claims
                            and awarded judgment in favor of Compass Bank for
                            attorneys’ fees, contingent attorneys’ fees, costs and
                            expenses.

                                        1
                          Appellant’s Issues [Restated]

       In eight issues Appellant argues that, despite the undisputed fact that

Appellant did not examine statements or inquire into his bank account for more

than eighteen months, Compass Bank was not entitled to summary judgment, was

not entitled to the attorneys’ fees awarded, and that Appellant rather than Compass

Bank should have been granted summary judgment on Appellant’s claim against

Compass for declining to reimburse him.

                                Statement of Facts

       This dispute involves an allegedly forged check and subsequent transactions.

Appellant claims these transactions were not authorized and resulted in charges

against a deposit account (#------3759) with Compass Bank. (The “Account”).

Appellant did not report any unauthorized activity to Compass Bank for more than

18 months.

       In 1988, Appellant opened an Account with Compass. CR50, 230.

Appellant, his wife, Elizabeth Haller de Calleja, and his father, Francisco Calleja

Cajigas, all were signatories on the Account from its opening to its closing in 2014.

CR46, 50. Sra. de Calleja and Sr. Cajigas are not parties to this suit and neither

gave testimony or other evidence. See, e.g., CR420, et seq. The Account signature

card, signed by all three owners, includes Appellant’s Mexico City address. CR50,

230.

                                          2
       At all times from 1988 to 2014, Account statements were available upon

request at any Compass Bank branch and, since long before 2012, Account

statements were accessible on-line. CR397. For four out of the more than 24 years

of the relationship, Compass Bank also mailed monthly statements of the Account.

According to Appellant, for convenience and security because he lives in a “suburb

of Mexico City” (CR 46), “prior to July 2012, [he] directed the bank statements for

the Account be mailed by the Bank to the address of [his] brother” in The

Woodlands, Texas. CR46.

       The statement for May 2012 activity is the last statement mailed to

Appellant’s brother’s address. At the request of someone who provided sufficient

identifying information regarding Appellant’s account to identify himself as

Appellant, Compass Bank mailed the statement for the period May 31 through

June 28, 2012 to an address in Cupertino, California. CR246. The next several

statements were mailed to Sacramento (CR249-57) and, thereafter, to an address in

Georgia. CR 258, et seq. Although Appellant claims he did not tell Compass Bank

to change the mailing address (see, e.g., CR46), Appellant presented no affidavit

testimony or other evidence from the other two owners of the Account.1 And, there

1
        Co-signatories on the Account, Ana Elizabeth Haller de Calleja and Francisco Calleja
Cajigas, each also had the right to change the mailing address. See CR202, CR212; see also
CR412, et seq. (Compass’s motion to strike); CR685 (Order at ¶ 6, overruling Compass’s
objection).

                                             3
is no evidence that anyone—not Appellant, either of the other Account owners, or

Appellant’s brother—ever contacted Compass Bank to notify it that Account

statements were no longer being received at the Texas address.

      On June 26, 2012, the account was debited $33.23 for checks – this charge

appeared on the June statement. CR246. Appellant alleges that this charge was

unauthorized. On July 30, 2012, a check in the amount of $38,700.00 was paid

from the Account. CR249. The transaction appears on the July statement. Id. From

July 30, 2012 until January 2014, Compass received no notice that Appellant had

any complaint with his Account.

      Eighteen months later, in January 2014, Appellant alleges he “discovered a

problem” when “an acquaintance” to whom he had written a check told him that

check was returned marked “account closed.” CR47. When Appellant finally

contacted Compass Bank in the last week of January 2014, he was shown a copy of

the $38,700.00 check (id.) posted to the Account and listed on the Account

statement a year and one-half earlier. CR71. For the first time, he claimed the

check was forged. CR47. When asked by Compass what he did to monitor the

Account after January 2012 (6 months before the alleged forgery), Appellant

answered under oath, “There was no need to ‘keep track’ of banking information

because no authorized checks (except perhaps two checks described in response to

Interrogatory No. 10) would be shown in statements after May 2012.” CR321-22.

                                        4
Plaintiff failed to provide any evidence or other testimony that he regularly

reviewed his account statements as required by the deposit agreement.

       The deposit agreement applicable to the Account (CR202, 205, et seq.)2

provides, “If we have a deliverable address on file for you, we will mail or deliver

to you periodic statements for your account at approximately monthly intervals

….” CR212. These materials “may be mailed to … the address shown in our

records.” Id. “Our records regarding [the Account] will be deemed correct unless

you timely establish with us that we made an error.” Id. The agreement also

instructs Appellant to “Notify us promptly if you do not receive your statement by

the date you normally would expect to receive it.” Id. The agreement further

provides:

       … We may make statements, cancelled checks (if applicable to your
       account), notices or other communications available to you by holding
       all or any of these for you or delivering all or any of these items to
       you in accordance with your request or instructions. If we hold
       statements or notices to you at your request or because you fail to
       provide us with a current address, they will be deemed delivered to
       you when they are prepared (for held statements), mailed (for returned
       mail) or otherwise made available to you.
2
        Appellant disputes that the February 2012 edition of the deposit agreement applies. The
2008 deposit agreement (the one Appellant advocates) permits amendment and provides
Compass will notify Appellant of amendment of the agreement by either mailing notice to “the
last address shown on our records” … “or by posting the amendment in our offices.” CR68. The
2008 agreement also provides: “By continuing to maintain your account or obtaining services or
products relating to this Agreement or your account after the amendment becomes effective, you
agree to the amendment of this Agreement.” Id. The 2012 deposit agreement includes
substantially similar language. CR219. There is no dispute that Appellant maintained the
Account after February 2012. See CR228.

                                              5
Id. Appellant did not report any unauthorized transactions, nor did he inform

Compass Bank he was not receiving mailed monthly statements, at any time before

January 2014.

      The deposit agreement includes Appellant’s (and the other account owners’)

promise to “carefully examine each account statement ….” CR212. It includes the

owners’ “agree[ment] to act in a prompt and reasonable manner in reviewing your

statement or notice and reporting any exceptions to us.” Id. “This means that, if

you do not report exceptions to us within thirty (30) days after we send or make the

statement or notice available to you, we will not reimburse you for any such

disputed amounts or any loss you suffer, including, but not limited to, any amounts

lost as a result of paying any unauthorized, forged, or altered item ….” Id.

      Compass Bank paid a check on July 30, 2012. Appellant waited 18 months

to tell Compass Bank he believed the check was forged. Likewise, Appellant did

not tell Compass Bank for 18 months that statements sent to his brother’s address

every month for four years stopped showing up after June of 2012. Appellant made

no effort to obtain copies of statements from any Compass Bank branch, via the

internet or otherwise, at any time between July 2012 and January 2014. See

CR397.

                                          6
                               Standard of Review

Summary Judgment

      A.    Generally

      The standard of review for summary judgments is “de novo.” Mid-Century

Ins. Co. v. Ademaj, 243 S.W.3d 618, 621 (Tex. 2007).

      When both parties move for summary judgment and the trial court grants

one motion and denies the other, this Court determines all questions presented and

renders the judgment that the trial court should have rendered. See Berry v. Encore

Bank, 01-14-00246-CV, 2015 WL 3485970, at *4 (Tex. App.—Houston [1st Dist.]

June 2, 2015, no. pet. h.) (citing Tex. Workers’ Comp. Comm’n v. Patient

Advocates, 136 S.W.3d 643, 648 (Tex. 2004)).

      B.    Traditional Summary Judgment

      The moving party bears the burden of showing both no genuine issue of

material fact and entitlement to judgment as a matter of law. Tex. R. Civ. P. 166a

(c); Am. Tobacco Co., Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997);

Kennamer v. Estate of Noblitt, 332 S.W.3d 559, 563 (Tex. App.—Houston [1st

Dist.] 2009, pet. denied). In deciding whether there is a genuine issue of material

fact, the Court takes evidence favorable to the non-movant as true and, all

reasonable inferences benefit and all doubts are resolved in favor of the non-

movant. Am. Tobacco Co., Inc. v. Grinnell, supra; Kennamer v. Estate of Noblitt,

                                        7
332 S.W.3d at 563 (citing Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661

(Tex. 2005)).

      Summary judgment for a defendant is proper if the defendant disproves at

least one element of each of the plaintiff’s claims or affirmatively establishes each

element of an affirmative defense to each claim. Kennamer v. Estate of Noblitt,

supra (citing Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995)).

      C.     Evidentiary Rulings

      The admission or exclusion of summary judgment evidence is reviewed for

abuse of discretion. Highland Capital Mgmt., L.P. v. Ryder Scott Co., 402 S.W.3d
719, 747 (Tex. App.—Houston [1st Dist.] 2012, no pet.) (citing K-Mart Corp. v.

Honeycutt, 24 S.W.3d 357, 360 (Tex. 2000)). A trial court abuses its discretion

when it acts without reference to guiding rules or principles. Id. (citing Carpenter

v. Cimarron Hydrocarbons Corp., 98 S.W.3d 682, 687 (Tex. 2002). If the trial

court acts in an arbitrary or unreasonable manner, it abuses its discretion. See Leax

v. Leax, 305 S.W.3d 22, 32 (Tex. App.—Houston [1st Dist.] 2009, pet. denied)

(citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 242 (Tex. 1985).

      D.     Contract Interpretation

      The interpretation of an unambiguous contract is properly the subject of a

motion for summary judgment. See, e.g., Coker v. Coker, 650 S.W.2d 391, 393-94

(Tex. 1983); Derr Constr. Co. v. City of Houston, 846 S.W.2d 854, 862 (Tex.

                                         8
App.—Houston [14th Dist.] 1992, no writ) (citing RGS, Cardox Recovery, Inc. v.

Dorchester Enhanced Recovery Co., 700 S.W.2d 635, 638 (Tex. App.—Corpus

Christi 1985, writ ref’d n.r.e.)); Rogers v. Rogers, 01-90-00852-CV, 1991 WL
179620 (Tex. App.—Houston [1st Dist.] Sept. 12, 1991, writ denied) (not

designated for publication).

      When interpreting unambiguous contracts courts are bound to “ascertain the

true intentions of the parties as expressed in the writing itself.” Italian Cowboy

Partners v. Prudential Ins. Co., 341 S.W.3d 323, 333 (Tex. 2011); see also

Sonerra Resources Corp. v. Helmerich & Payne Int’l Drilling Co., No. 01-11-

00459-CV, 2012 WL 3776428,*4 (Tex. App.—Houston [1st Dist.] Aug. 30, 2012,

no pet. h.) (mem. op.). The Court construes the contract as a whole in order to

“harmonize and give effect to all the provisions of the contract so that none will be

rendered meaningless.” El Paso Field Services, L.P. v. MasTec N. Am., Inc., 389
S.W.3d 802, 805 (Tex. 2012) (citing Italian Cowboy Partners, Ltd. v. Prudential

Ins. Co. of Am., supra).When a contract is unambiguous, courts may not consider

the parties’ interpretations or extraneous evidence to determine the meaning of the

instrument. Italian Cowboy Partners v. Prudential Ins. Co., supra; Sonerra

Resources Corp. v. Helmerich & Payne Int’l Drilling Co., supra.

                                         9
      In reviewing a summary judgment ruling that interprets a contract, the

Court’s review is de novo. See Lyle v. Jane Guinn Revocable Trust, 365 S.W.3d
341, 350 (Tex. App.—Houston [1st Dist.] 2010, pet. denied).

      E.     Harmless Error

      In the event this Court determines the trial court committed an error of law,

this Court should reverse the judgment only if “the error complained of: (1)

probably caused the rendition of an improper judgment; or (2) probably prevented

the appellant from properly presenting the case to the court of appeals.” Tex. R.

App. P. 44.1. The test is not a “but for” test, nor is it one of mere possibility;

rather, this Court’s inquiry is whether the error probably caused rendition of an

improper judgment. See McCraw v. Maris, 828 S.W.2d 756, 758 (Tex. 1992)

(citing Howard v. Faberge, Inc., 679 S.W.2d 644, 648 (Tex. App.—Houston [1st

Dist.] 1984), writ refused n.r.e.)).

                               Summary of Argument

      The material facts in this case are undisputed. First, Compass Bank paid a

check on July 30, 2012. Despite agreeing to report any unauthorized activity within

thirty days, Appellant waited 18 months to inform Compass Bank he believed the

check was forged. Likewise, Appellant failed to notify Compass Bank for 18

months that he and/or his brother were no longer receiving bank statements.

Appellant made no effort to obtain copies of statements from any Compass Bank

                                        10
branch, via the internet or otherwise, at any time between July 2012 and January

2014. See CR397.

      This Court should affirm the trial court’s judgment that Appellant recover

nothing against Compass because the undisputed facts demonstrate as a matter of

law that (1) Appellant failed to exercise the required diligence by waiting more 18

months to examine or inquire into the status of his account, and (2) at all times,

Appellant’s account statements were “made available” to him had he requested

them from Compass.

      First, based on the lapse of time from July 30, 2012, when a supposedly

forged check was cashed, until January of 2014, when Appellant first reported the

alleged fraud, the trial court concluded that, “as a matter of law Plaintiff has failed

to exercise diligence in protecting himself from fraud regardless of any

shortcomings in sending bank statements.” CR735. The conclusion is based on

undisputed facts and supported by Compass Bank’s Business and Commerce Code

article 3 arguments. See CR193-98.

      Additionally, based on uncontroverted evidence, much of it from Appellant

himself, that Appellant ignored his Account for 6 months before and 18 months

after the alleged forgery, the trial court also determined that “Plaintiff’s focus on

the word ‘sends’ as used in section 4-406 of the Texas Business and Commerce

                                          11
Code is too exclusive and ignores the equally important and relevant ‘or makes

available’ language of that section.” Id.

      These determinations, the operative contract between Appellant and

Compass Bank, and the terms of sections 3.406 and 4.406 of the Business and

Commerce Code preclude Appellant’s claim.

      Properly applying rules of contract construction and giving effect to all parts

of the written agreement in evidence, the trial court correctly concluded that the

periodic statements of the Account were “made available.” The trial court correctly

applied the law, e.g., Business and Commerce Code section 4.406 and the written

contract, to conclude that Appellant failed to timely report any problem revealed

on available Account statements. Accordingly, Appellant’s claim was precluded.

      The contract includes a signature card in which Appellant agreed to be

bound by the agreement and all amendments. By terms of the agreement as

amended, and consistent with statute, Compass Bank complied with its obligation

to make statements of the Account available to Appellant.

      Appellant failed to comply with his corresponding obligation to timely alert

Compass Bank that he was no longer receiving monthly account statements. He

failed to comply with his statutory and contractual duties to timely notify Compass

Bank of any exception to activity reflected on statements of the Account.

                                            12
Accordingly, the trial court’s judgment in favor of Compass Bank should be

affirmed.

        Similarly, the trial court’s denial of Appellant motion for summary judgment

should be affirmed. Appellant did not conclusively prove payment of the check or

any other transaction was unauthorized. Neither of two co-owners of the Account

gave evidence. And, Appellant failed to conclusively prove his satisfaction of

conditions precedent to any right to recover.

        Finally, the trial court’s award of attorneys’ fees to Compass Bank pursuant

to the contract between the Parties should be affirmed.

                            Argument and Authorities

   I.       Appellant’s Failure to Inquire for 18 Months Is Negligent as a
            Matter of Law.

        It is undisputed that Appellant failed to examine his bank statements or

otherwise inquire into the status of his bank account for more than 18 months.

Because this fact was not disputed, the trial court concluded that, “as a matter of

law Plaintiff has failed to exercise diligence in protecting himself from alleged

fraud ….” CR735. No reasonable person could disagree: failure to reconcile bank

statements for months on end is unreasonable; failure to look at an account

statement month after month is unreasonable; failure to even alert the bank that

statements have stopped showing up when and where expected is unreasonable.

                                         13
      The 2012 deposit agreement provides that Appellant (and the other Account

owners) “agree(s) to act in a prompt and reasonable manner in reviewing your

statement or notice and reporting any exceptions to us.” CR212. Further, the

deposit agreement directs Appellant to “[n]otify us promptly if you do not receive

your statement by the date you normally would expect to receive it.” Id. It is

undisputed that Appellant neither reviewed the status of his account nor notified

Compass that he had not received statements for at least 18 months. CR47.

      The deposit contract between Compass Bank and Appellant is “a contract in

writing for all purposes.” Tex. Fin. Code § 34.301 (a). As the Texas Supreme

Court has written:

      Contracting parties are generally not fiduciaries. See Schlumberger Tech.
      Corp. v. Swanson, 959 S.W.2d 171, 177 (Tex. 1997). Thus, due diligence
      requires that each protect its own interests. See Barfield v. Howard M.
      Smith Co. of Amarillo, 426 S.W.2d 834, 840 (Tex. 1968) (“As a party to
      arm’s length business transactions, respondent had a duty to use
      ordinary care for the protection of its own interests”). Due diligence
      may include asking a contract partner for information needed to
      verify contractual performance. See [Wagner & Brown, Ltd. v.
      Horwood, 58 S.W.3d 732 (Tex. 2001)] at 736; [HECI Exploration Co. v.
      Neel, 982 S.W.2d 881 (Tex. 1998)] at 886. If a contracting party
      responds to such a request with false information, accrual may be delayed
      for fraudulent concealment. Wagner & Brown, 58 S.W.3d at 737; HECI,
982 S.W.2d at 886. But failing to even ask for such information is not
      due diligence. See Wagner & Brown, 58 S.W.3d at 736; HECI, 982
S.W.2d at 886.

Via Net v. TIG Ins. Co., 211 S.W.3d 310, 314 (Tex. 2006) [emphasis added].

                                       14
       In this case, it is undisputed that Appellant failed to even inquire about his

account for more than 18 months. Id.; see also, e.g., Union Planters Bank, Nat.

Ass’n v. Rogers, 912 So. 2d 116, 122 (Miss. 2005) (A 4.406 case in which the

court said, “A reasonable person who has not received a monthly statement from

the bank would promptly ask the bank for a copy of the statement.”).3 Thus, apart

from Appellant’s obligations pursuant to 4.406 (see infra), Appellant’s admitted

and unjustified failure to have discovered irregularities in the Account because

“[t]here was no need to ‘keep track’” (CR321) precludes his claims. 4 Assuming

without conceding that an imposter was involved, Appellant’s failure to “keep

track” permitted the alleged imposter to access and make use of Appellant’s

account information. Had Appellant routinely reviewed the account activity, he

3
        See also, e.g., Myrick v. Nat'l Sav. & Trust Co., 268 A.2d 526, 528 (D.C. 1970)
(unjustified failure to inquire as to lack of receipt of monthly statements and cancelled checks
held negligent as a matter of law); Coleman v. Bhd. State Bank, 3 Kan. App. 2d 162, 169, 592
P.2d 103, 111 (1979) (citing Myrick); Westport Bank & Trust Co. v. Lodge, 164 Conn. 604, 611-
12, 325 A.2d 222, 226 (1973) (reasonably prompt and careful examination of the altered
statements would have disclosed the forgeries many months before they ultimately were
discovered and that the lack of effort on the part of the defendants to make such examination
constituted negligence.); Terry v. Puget Sound Nat. Bank, 80 Wash. 2d 157, 159-60, 492 P.2d
534, 535 (1972) (Monthly statements were intercepted by wrongdoer and not received by
plaintiffs; plaintiffs did not inquire of the bank nor discuss between themselves this unusual
absence of statements; and, only after they received notice that the account was overdrawn did
they go to the bank and discover forgeries, such “facts constitute substantial evidence of
negligence on the part of the plaintiffs.”).
4       It appears that Appellant is arguing, without citation to authority, that an exception
should apply to his obligation to monitor the Account if he does not use the Account for some
period. There should be no such exception. Even if a depositor does no banking for an extended
period, when he fails to monitor the account, he opens the door for a fraudster to engage in
unauthorized activity without detection.

                                              15
would have discovered the allegedly unauthorized charge of $33.23 for new checks

(CR246), thereby alerting him to the potential for the alleged unauthorized activity

that appeared on subsequent statements. But, his failure to monitor the Account

for more than 18 months permitted the alleged imposter to purchase blank checks

with Account funds and to then use those checks undetected. Assuming the truth of

Appellant’s allegations, the alleged imposter’s forgery (using check stock

Appellant claims he did not purchase) was made possible by Appellant’s negligent

failure to examine Account statements—or even to inquire about them—for 6

months before and 18 months after the alleged forgery. 5 See Tex. Bus. & Com.

Code § 3.406 (a).

       In addition to the 4.406 arguments discussed below, Compass Bank moved

for summary judgment pursuant to section 3.406. 6 Tex. Bus. & Com. Code §

3.406; CR193-98. Section 3.406(a) provides:

5
        Rewarding Appellant’s admitted lack of diligence would undermine the UCC’s “discrete
fault scheme, specifically allocating responsibility among parties to a banking relationship” and
create untold uncertainty. See Bank of Tex. v. VR Elec., Inc., 276 S.W.3d 671, 683 (Tex. App.—
Houston [1st Dist.] 2008, pet. denied). A customer could willfully ignore his accounts, have a
third person conspire to change the address and drain the account then months or years later sue
to hold the bank liable.
6
        Compass also argued section 3.405 but does not advance any 3.405 arguments here,
except by analogy. For example, Appellant entrusted his brother with responsibility to receive
and hold statements in Texas. The brother failed for 18 months to inform Appellant that
statements were no longer arriving as they had. Appellant is responsible for his brother’s failure
to discharge the responsibility he was given, just as if the brother had been Appellant’s
employee.

                                               16
      (a) A person whose failure to exercise ordinary care substantially
          contributes to an alteration of an instrument or to the making of a
          forged signature on an instrument is precluded from asserting the
          alteration or the forgery against a person who, in good faith, pays the
          instrument or takes it for value or for collection.

Tex. Bus. & Com. Code § 3.406 (a).

      The trial court correctly concluded that, as a matter of law, Appellant failed

to exercise ordinary care. See CR735. That failure substantially contributed to the

making of the claimed forged instrument. See Tex. Bus. & Com. Code § 3.406.

Appellant testified about his routine for examining bank statements. For at least

four years before the alleged forgery and 18 months after, rather than receiving or

requesting statements for review personally, Appellant expected account

statements to be sent to his brother’s apartment in Texas, even though his brother is

not an Account owner. See CR46; CR 50; CR230-31; CR320. Appellant testified

he visited his brother “from time-to-time and retrieve[d] bank statements ….”

CR46. Although Appellant made it a point to say he kept statements in a “locked

drawer” in Mexico City, he offered no evidence that his brother in Texas kept the

statements in a locked drawer or that his brother’s multi-unit apartment complex

and mailbox were safe and secure. CR47. Appellant’s testimony conclusively

establishes his “from time-to-time” visits to Texas did not include any visit during

the period from July 2012 until January 29, 2014. Id. He did not disclose when,

prior to July 2012, he had last come to Texas to retrieve bank statements. In fact, in

                                         17
answer to an interrogatory asking what he did to monitor the Account after January

2012 (6 months before the alleged forgery), Appellant answered under oath,

“There was no need to ‘keep track’ of banking information because no authorized

checks (except perhaps two checks described in response to Interrogatory No. 10)

would be shown in statements after May 2012.” CR321-22.

       It is undisputed that Appellant was not requesting or reviewing account

statements in 2012 or 2013. Appellant’s admitted, willful ignorance of the activity

in his Account allowed the alleged theft to go undetected and unreported for more

than 18 months. Thus, even if Compass Bank had continued to send statements to

the brother’s apartment, Appellant still would not have discovered and reported the

alleged forgery prior to 2014. Appellant’s own testimony negates any connection

between the non-receipt of statements and his admitted inattention to Account

activity, i.e., his negligence contributing to an alleged interloper’s forgery. Tex.

Bus. & Com. Code §3.406(a). Appellant willfully left his banking information

outside his control for extended periods of as much as two years. And, his no need

to keep track rationale ignores the very basis for a customer’s duty to examine

account statements: to ensure that activity reflected on each statement is authorized

activity.

       Appellant also offered no explanation why his brother, whom he trusted to

receive copies of his bank documents, never told him statements of the Account

                                         18
were no longer arriving as they had for four years. See CR46-47. Based on

undisputed evidence—mostly Appellant’s sworn statements—the trial court

concluded:

       In particular, but not the sole reason for [the October 28, 2014 order
       granting Compass Bank’s motion for summary judgment; CR539-40],
       the Court noted that where the check at issue was cashed on July 30,
       2012, and the Plaintiff did not notify the bank until January 29, 2014, as a
       matter of law Plaintiff has failed to exercise diligence in protecting
       himself from alleged fraud regardless of any shortcomings in sending
       bank statements. … Further, duties found in the deposit agreement
       attached to Compass Bank’s Motion for Summary Judgment which
       include a requirement that the depositor “act in a prompt and reasonable
       manner” relating to his account statements are also important and weigh
       against Plaintiff’s position.

CR735-36. Appellant’s decision to forgo any diligence regarding his Account —

ignoring the Account altogether for months before and after July 2012 (see CR321-

22)—at a minimum, substantially contributed7 to the alleged forgery as a matter of

law. Tex. Bus. & Com. Code § 3.406 (a). Accordingly, the trial court’s judgment

should be affirmed.

       Appellant does not directly attack the trial court’s conclusion that, as a

matter of law, he failed to exercise diligence in protecting himself. Taking a wholly

different tack, Appellant misreads this Court’s opinion in Bank of Texas v. VR

Elec, Inc., 276 S.W.3d 671 (Tex. App.—Houston [1st Dist.] 2008, pet. denied). See

7
       “The ‘substantially contributes’ test is meant to be less stringent than a ‘direct and
proximate cause’ test. Under the less stringent test the preclusion should be easier to establish.”
Tex. Bus. & Com. Code § 3.406, Cmt 2.

                                                19
Appellant’s Brief (“Br.”), p. 27. That case acknowledges that for 3.406 to preclude

the customer, a bank “must prove that (1) [the customer] failed to exercise ordinary

care that substantially contributed to the alteration of the check [or the forgery] and

(2) it paid the check in good faith.” VR Elec, Inc., 276 S.W.3d at 678.

        Appellant fails to appreciate how “good faith” was established in VR Elec.

After discussing Aetna Life & Casualty Co. v. Hampton State Bank, 8 a Dallas

Court of Appeals case in which “the record ‘failed to show any lack of honesty’”

and “‘contains no evidence tending to show that [the] employee … connived with

the forger or had reason to believe that he check was not genuine,’” the Court

observed in VR Elec that “[n]o evidence was developed at trial suggesting the Bank

knew of the forgery or had reason to believe it was not genuine.” See VR Elec, Inc.,
276 S.W.3d at 679-80. Similarly, Appellant does not direct the Court to any

evidence presented to the trial court suggesting a lack of good faith by Compass

Bank – there is no evidence in the record “tending to show that [Compass] …

connived with the [alleged] forger or had reason to believe that the check was not

genuine.” 9 See id.

8
       497 S.W.2d 80, 87 (Tex. Civ. App.—Dallas 1973, no pet.).
9
       Like the parties in VR Elec, Appellant “conflate[s] the concepts of good faith and
ordinary care.” Bank of Texas v. VR Elec., Inc., 276 S.W.3d at 679; see also Br., pp. 31-32.
Again citing the Aetna case out of Dallas, the Court explained that “neither ‘failure to exercise
ordinary care [n]or even gross negligence is equivalent to lack of good faith.’” Id. (quoting Aetna
Life & Casualty Co. v. Hampton State Bank, 497 S.W.2d at 87). It is well to note that the deposit
agreement permits payment of checks “mechanically based on the information encoded on the
Footnote continued.

                                               20
        As the Court has recently written, UCC “good faith” means “‘honesty in fact

and the observance of reasonable commercial standards of fair dealing.’”

Contractors Source, Inc. v. Amegy Bank Nat’l Ass’n, 462 S.W.3d 128, 135 (Tex.

App.—Houston [1st Dist.] 2015, no pet.) (citing Tex. Bus. & Com. Code §

1.201(b)(20)). As the party alleging lack of good faith, Appellant bears the burden

of proof :

        It is well-settled in Texas that “[t]he law presumes, in the absence of
        proof to the contrary, that the business transactions of every man are
        done in good faith, and for an honest purpose; and any one who alleges
        that such acts are done in bad faith, or for a dishonest and fraudulent
        purpose, takes upon himself the business of showing the same.”
        Compton, Ault & Co. v. Marshall, 88 Tex. 50, 29 S.W. 1059, 1059 (Tex.
        1895); see also Canfield v. Bank One, Tex., N.A., 51 S.W.3d 828, 837
        (Tex. App.—Texarkana 2001, pet. denied).

Id. Compass Bank’s good faith in paying the subject check is presumed and there

is no evidence rebutting the presumption. See id. Appellant does not direct the

Court to any record reference that shows or raises an issue of fact regarding a lack

of good faith. Compass Bank’s good faith and the trial court’s unchallenged

conclusion that Appellant failed, as a matter of law, to exercise diligence, together

establish the preclusion set forth in section 3.406 (a) of the Business and

Commerce Code. Tex. Bus & Com. Code § 3.406 (a). Appellant’s claims are

Previous footnote continued.
item” and the parties’ agreement that “reasonable commercial standards do not require” visual
review of checks. CR213.

                                             21
precluded and this Court should affirm the trial court’s judgment on that basis

alone.

     II.      The Deposit Contract and Section 4.406.

           Compass Bank also moved for summary judgment pursuant to Business and

Commerce Code section 4.406 and corresponding contract provisions. Tex. Bus. &

Com. Code § 4.406 10; see CR166, et seq. Section 4.406 provides, in part:

                  (a) A bank that sends or makes available to a customer a
           statement of account showing payment of items for the account shall
           either return or make available to the customer the items paid or
           provide information in the statement of account sufficient to allow the
           customer reasonably to identify the items paid. The statement of
           account provides sufficient information if the item is described by
           item number, amount, and date of payment. …
                                             ***
                  (b) If a bank sends or makes available a statement of account
           or items pursuant to Subsection (a), the customer must exercise
           reasonable promptness in examining the statement or the items to
           determine whether any payment was not authorized because of an
           alteration of an item or because a purported signature by or on behalf
           of the customer was not authorized. If, based on the statement or items
           provided, the customer should reasonably have discovered the
           unauthorized payment, the customer must promptly notify the bank of
           the relevant facts.

                 (d) If the bank proves that the customer failed, with respect to

10
        The Uniform Commercial Code regulates a bank’s relationship with its customers. See
generally Tex. Bus. & Com. Code §§ 3.101–605 (negotiable instruments); id. §§ 4.101–.504
(bank deposits and collections); Contractors Source, Inc. v. Amegy Bank Nat’l Ass’n, 462
S.W.3d 128, 133 (Tex. App.—Houston [1st Dist.] 2015, no pet.) (citing Bank of Tex. v. VR Elec.,
Inc., 276 S.W.3d 671, 683 (Tex. App.—Houston [1st Dist.] 2008, pet. denied) (the UCC creates
“a discrete fault scheme, specifically allocating responsibility among parties to a banking
relationship”)). As the Court also recognizes, the bank/customer relationship may also be
governed in part by the agreement between them. Id. (citing Bank of Tex., 276 S.W.3d at 677).

                                              22
      an item, to comply with the duties imposed on the customer by
      Subsection (c), the customer is precluded from asserting against the
      bank:

             (1) the customer's unauthorized signature or any alteration on
      the item, if the bank also proves that it suffered a loss by reason of the
      failure; and

             (2) the customer's unauthorized signature or alteration by the
      same wrongdoer on any other item paid in good faith by the bank if
      the payment was made before the bank received notice from the
      customer of the unauthorized signature or alteration and after the
      customer had been afforded a reasonable period of time, not
      exceeding 30 days, in which to examine the item or statement of
      account and notify the bank.
                                        ***
             (f) Without regard to care or lack of care of either the customer
      or the bank, a customer who does not within one year after the
      statement or items are made available to the customer (Subsection (a))
      discover and report the customer’s unauthorized signature on or any
      alteration on the item is precluded from asserting against the bank the
      unauthorized signature or alteration. If there is a preclusion under this
      subsection, the payor bank may not recover for breach of warranty
      under Section 4.208 with respect to the unauthorized signature or
      alteration to which the preclusion applies.

Tex. Bus. & Com. Code § 4.406.

      As Appellant correctly states, section 4.103(a) of the Business and

Commerce Code permits a bank and its customer to contractually modify the rights

and duties embodied in section 4.406. Tex. Bus. & Com. Code § 4.103(a).

Appellant concedes the parties did so in this case. See Br., p. 4. Therefore, the

transactions in issue are governed by section 4.406 and the operative deposit

agreement.

                                         23
The February 2012 Deposit Agreement Governs the Account.

       In his motion for summary judgment, Appellant sought to recover attorney’s

fees pursuant to the 2012 deposit agreement. CR44 (Appellant’s motion for

summary judgment). Reversing course, Appellant now argues that the 2012

agreement does not apply to this case, but that an earlier, 2008 agreement, applies

instead.

       “A bank and its account holder may amend the deposit contract by

agreement or as permitted by Subsection (b) or other law.” Tex. Fin. Code Ann. §

34.302 (a). The signature card includes Appellant’s agreement to any amendments

of the deposit contract. CR50; CR230. The 2008 deposit agreement (the one

Appellant advocates) also contemplates amendment and expressly provides that

notice of the amendment may be mailed or may be posted in Compass Bank’s

offices. CR298-99. 11 The 2008 deposit agreement, “effective August 22, 2008”

(CR51), provides further, “By continuing to maintain your account … after the

amendment becomes effective, you agree to the amendment of this Agreement.”

CR68. The 2012 deposit agreement includes substantially similar terms, i.e., notice

by posting and acceptance of the amendment by continuing to keep the Account.

11
        The “Amendments to this Agreement” provision appears at pages 20-21 of the 2008
deposit agreement. As appended to Appellant’s motion for summary judgment, the provision
begins at the lower left of CR69 and is continued beginning at the upper right of CR68. A more
legible copy of the 2008 “Consumer Disclosure” (deposit agreement) is appended at Tab 1 for
the Court’s reference. A more legible copy of the 2012 deposit agreement is appended as Tab 2.
.

                                             24
CR219. Thus, as permitted by statute, as expressly provided in the signature card

and the both deposit agreements in evidence, and because Appellant indisputably

maintained the Account after February 2012—the events about which Appellant

complains all occurred in or after June of 2012—Appellant agreed to the February

2012 amendment. CR228; see also Tex. Fin. Code § 34.302. 12 In fact, Appellant

himself invoked the 2012 deposit agreement in an attempt to recover attorney’s

fees. CR44 (Appellant’s motion for summary judgment). The 2012 deposit

agreement is the operative deposit agreement.

      As Compass Bank’s custodian testified, Appellant agreed to be bound by a

deposit agreement; the 2012 deposit agreement governing the relationship is

attached to her summary judgment affidavit; that deposit agreement contains rights

and obligations of the parties; and the attached 2012 deposit agreement “evidences

the agreement in effect between [Appellant] and Compass Bank.” CR202-03. The

trial court’s reference to “the deposit agreement attached to Compass Bank’s

Motion for Summary Judgment” correctly gives effect to the operative contract,

the 2012 deposit agreement.

      Attempting to avoid the very agreement he tried to use as a basis for fees,

Appellant argues that Compass Bank’s custodian’s affidavit was conclusory. See

12
       “A bank and its account holder may amend the deposit contract by agreement or as
permitted by Subsection (b) or other law.” Tex. Fin. Code Ann. § 34.302 (a).

                                          25
Br., pp. 7-9. Ms. Mueller identified herself as a Compass Bank employee and

custodian of its records and testified that “in this capacity, I have personal

knowledge of accounts held at Compass Bank.” CR202-03. This “shows how [s]he

gained personal knowledge.” See, e.g., Waite v. BancTexas-Houston, N.A., 792
S.W.2d 538, 540 (Tex. App.—Houston [1st Dist.] 1990, no writ); see also Miller v.

Raytheon Aircraft Co., 229 S.W.3d 358, 365-66 (Tex. App.—Houston [1st Dist.]

2007, no pet.) (“The personal knowledge requirement is satisfied if the affidavit

sufficiently describes the relationship between the affiant and the case so that it

may be reasonably assumed that the affiant has personal knowledge of the facts

stated in the affidavit.”) (quoting Stucki v. Noble, 963 S.W.2d 776, 780 (Tex.

App.—San Antonio 1998, pet. denied)). Ms. Mueller identified Appellant’s

account as a “regular bank account” and governed by the attached 2012 account

agreement governing such accounts. Id. Specifically she said, “Attached as Tab 1

is a copy of the written contract governing the deposit relationship between

[Appellant] and Compass Bank.” CR202. Ms. Mueller properly identified the 2012

deposit agreement as a Compass Bank business record of which she had personal

knowledge and as the agreement “in effect between” the parties. CR203.

      Evidence rule 902(10) sets out a form of affidavit to be used with business

records under rule 803(6). Tex. R. Evid. 902(10). The rule also provides that the

form set out is not exclusive. Id. As the Court has written, “An affidavit that

                                        26
substantially complies with the form of affidavit set out in the rule will suffice.”

Khalilnia v. Fed. Home Loan Mortg. Corp., 01-12-00573-CV, 2013 WL 1183311,

at *2 (Tex. App.—Houston [1st Dist.] Mar. 21, 2013, pet. denied) (citing Fullick v.

City of Baytown, 820 S.W.2d 943, 944 (Tex. App.—Houston [1st Dist.] 1991, no

writ)). Ms. Mueller’s affidavit complies with rule 902(10). See CR202-03. 13 That

the 2012 deposit agreement is the operative agreement is conclusively established.

Compass Bank made statements available in accordance with the contract.

       The complaint begins with a $38,700.00 check paid from Appellant’s

Account in July 2012.14 See CR420 (First Amended Petition). The questioned

transaction appears on the Account statement for the period June 29-July 30, 2012,

addressed to an allegedly unauthorized address in California. CR249. It is

undisputed that Appellant did not notify Compass Bank of the alleged forgery or

any other exception until more than 18 months later on January 24, 2014. See

CR240; see also CR47 (Appellant’s affidavit). Therefore, if Compass Bank sent or

made Account statements available to Appellant more than 30 days before January

13
        Appellant’s argument regarding Ms. Mueller’s second affidavit is unfounded. See Br., p.
8. In her second affidavit Ms. Mueller adds factual basis for her earlier statement that the 2012
document is the agreement that “evidences the agreement in effect between [Appellant] and
Compass Bank.” CR202-03. She explains the revision date in relation to Appellant’s claim that
an imposter appeared after that date and she links the 2012 amendment to the signature card
permitting such amendments. CR396. The testimony provides additional foundation facts.
14
        The allegedly unauthorized debit of $33.23 for checks ordered appears on the previous
statement. CR246. Appellant, likewise, did not notify Compass of this debit for more than 18
months.

                                               27
24, 2014, Appellant’s claims in this case are precluded, as a matter of law, under

section 4.406 (in addition to the 3.406 preclusion) just as the trial court determined.

Tex. Bus. & Com. Code § 4.406 (d), (f).

       As noted above, a bank and its customer may modify the rights and duties

embodied in section 4.406. Tex. Bus. & Com. Code § 4.103(a). There is no dispute

that the parties did so. See Br., p. 4. Among other things, the parties agreed to the

meaning of “make available.” For example, the 2012 deposit agreement provides

that Compass Bank “may make statements, cancelled checks (if applicable …),

notices or other communications available to you by holding all or any of these

items for you, or delivering all or any of these items to you, in accordance with

your request or instructions.” CR212. The 2012 deposit agreement also provides,

“[i]f we hold statements or notices to you at your request …, they will be deemed

delivered to you when they are prepared ….” CR212. Compass Bank’s Ms.

Mueller testified that copies of statements were available at any branch and were

available on-line for viewing or for ordering copies. CR397.15 Her uncontroverted

testimony was that Compass Bank’s records contain no indication that Appellant

ever called about a missing statement and no indication that Compass Bank ever

15
       Appellant suggests that because he was in Mexico he could not simply go to his local
bank. Appellant’s location does not affect and should not alter his obligation to timely notify
Compass Bank. Plus, because, as Ms. Mueller testified, Appellant’s post June 2012 statements
were available on-line, he could easily have accessed them from wherever he was.

                                              28
refused a request to provide copies of any statements. Id. Ms. Mueller also testified

that statements Appellant did receive include several alternative methods for

contacting the bank to alert it to any perceived problem. 16 Id. Thus, as the trial

court correctly concluded on the established facts of this case, Account statements

were “otherwise made available” within the meaning of section 4.406 of the

Business and Commerce Code.

       The deposit agreement also provides that statements “may be mailed to you

at the address shown in our records ….” CR212.17 The contract provides and

Appellant agreed that Compass Bank’s “records regarding your accounts will be

deemed correct unless you timely establish with us that we made an error.” CR212.

“Timely” means within 30 days. Id. Appellant said nothing about any error from

July of 2012 until the end of January 2014. Because Appellant admittedly failed to

“keep track” of the Account from as early as January 2012 through January of

2014, the successive addresses “shown in our records” are “deemed correct” as

16
        Appellant’s brother got the statements through May of 2012, each of which had, among
other things, a 1-800 number for contacting Compass Bank. When the expected next statement
allegedly did not appear, Appellant (and/or his brother) had more than adequate information to
have timely contacted Compass Bank.
17
        The signature card, evidence both parties presented to the trial court, part of the contract
in writing for all purposes (Tex. Fin. Code § 34.301 (a)), and expressly incorporated into the
deposit agreement (CR207; CR735) is Appellant’s “address shown in our records” and did not
change:

CR50; CR230.

                                                29
provided by the clear terms of the deposit agreement. Because Appellant did not

“timely establish with us that we made an error” (CR212), Account statements

were “otherwise made available” within the meaning of section 4.406 of the

Business and Commerce Code.

      Appellant failed to make any timely report about the allegedly unauthorized

activity. He did not timely report that his brother was no longer receiving Account

statements, even though the deposit agreement says, “[n]otify us promptly if you

do not receive your statement by the date you normally would expect to receive it.”

CR212. Appellant cavalierly ignored the Account for at least two years. See

CR321-22 (“There was no need to ‘keep track’ of banking information because no

authorized checks … would be shown in statements after May 2012.”). Neither the

Business and Commerce Code nor the deposit agreement places the risk of loss on

Compass Bank for Appellant’s unilateral decision to ignore his financial affairs.

Rather, Appellant had contractual obligations regarding the oversight of his

Account, including the obligation to timely review account activity and report

exceptions. CR212. The summary judgment record conclusively establishes

Appellant’s failure to satisfy these obligations. Accordingly, Compass Bank’s

records are deemed correct, including the records of successive addresses to which

statements were sent. See id.

                                        30
       Upon this record, having construed the written contract governing the

Account as a whole, giving effect to all its provisions so that none is rendered

meaningless,18 the trial court correctly and sustainably concluded that Compass

Bank made statements of the Account available and Appellant waited far too long

to report any unauthorized transaction. See El Paso Field Services, L.P. v. MasTec

N. Am., Inc., 389 S.W.3d 802, 805 (Tex. 2012) (citing Italian Cowboy Partners,

Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d at 333); see also Am. Airlines

Employees Fed. Credit Union v. Martin, 29 S.W.3d 86, 94 (Tex. 2000).19 Account

statements were “sent or otherwise made available” within the meaning of the

deposit agreement and section 4.406 of the Business and Commerce Code.

Appellant’s claims in this case are precluded and, the judgment of the trial court

should be affirmed.

18
         Both parties submitted the Account signature card as evidence. This Account record
includes the phrase, “Hold All Correspondence” in the address field. Neither party focused on
the import of the term in the trial court. But, in order to construe the deposit agreement, the trial
court (and this Court) must “ascertain the true intentions of the parties as expressed in the writing
itself.” Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex.
2011) (citing J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003)). This means
examining and considering “the entire writing in an effort to harmonize and give effect to all the
provisions of the contract so that none will be rendered meaningless.” Id.; Seagull Energy E & P,
Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006); Gramen Farm, LLC v. Huyen
Nguyen, 01-13-00569-CV, 2014 WL 4374120, at *3 (Tex. App.—Houston [1st Dist.] Sept. 4,
2014, no pet.); see also Whitney Nat. Bank v. Baker, 122 S.W.3d 204, 208 (Tex. App.—Houston
[1st Dist.] 2003, no pet.) (“[t]he signature card for a bank account is a type of contract.”);
Stauffer v. Henderson, 801 S.W.2d 858, 869 (Tex. 1990); Tex. Fin. Code § 34.301 (a).
19
         “[T]he purpose of section 4.406 is to place the burden on those best able to detect
unauthorized transactions so that further unauthorized transactions can be prevented, and this
burden includes the risk of nonreceipt of account statements.”

                                                31
   III.   As Prevailing Party Compass Bank is Entitled to Recover Attorneys’
          Fees.

      The 2012 deposit agreement includes the parties’ agreement regarding the

recovery of attorneys’ fees:

      Attorneys’ Fees. In any action between you and us in court, the
      prevailing party shall be entitled to recover its reasonable attorneys’ fees
      expended in the prosecution or defense of the court action from the other
      party.

CR209. Because Compass Bank prevailed, it is entitled to recover its reasonable

fees expended.

      Appellant concedes the parties’ agreement that the trial court could

determine the reasonableness and necessity of Compass Bank’s fees. See Br., p.

31; CR714. The correspondence referenced at CR714 is memorialized in

[Appellant’s] Supplemental Response to Defendant’s Claim for Attorney’s Fees,

CR698, et seq. “Both parties agreed that an evidentiary hearing would be

unnecessary and that the Court could rule on whether attorney’s fees were

reasonable and necessary based on affidavits and argument.” CR698. Consistent

with the agreement, the trial court’s determination of the recoverability and amount

of fees awarded in favor of Compass Bank was accomplished separately from the

summary judgment hearing on liability. See CR539-40; CR541; CR735. Thus, by

agreement the parties effectively requested and participated in a bench trial on

attorneys’ fees and did so on counsel’s respective affidavits.

                                         32
      Despite previously arguing that the 2012 deposit agreement entitled him to

an award of attorneys’ fees, Appellant now argues that the 2012 deposit agreement

was not the deposit agreement in effect. As above, the signature card includes

Appellant’s agreement to any amendments of the deposit contract. CR50; CR230.

The 2008 deposit agreement—Appellant’s preferred agreement—similarly

contemplates amendments to the parties’ agreement. See CR68. Among the

pertinent provisions is that the bank may notify the account owner of an

amendment by mailing notice or by posting notice at the bank. Id.; see also CR219

(2012 deposit agreement); CR50 (signature card). Appellant implicitly argues he

did not “receive” the 2012 deposit agreement. But receipt is not material. By terms

of both the 2008 and 2012 deposit agreements, the successive amendments also

were effective because Appellant continued to maintain the Account after August

2008 and after February 2012. CR68; CR219.20 The 2012 deposit agreement

applies including the agreement that a “prevailing party” in litigation “shall be”

entitled to recover its reasonable fees. CR209.

      Appellant next complains that attorney Huttenbach’s first affidavit is

insufficient because the affidavit “states that the Bank is entitled to recover

$28,840.19 of fees and costs, but the attached fee statements only total

20
       The agreement enforced by the Texas Supreme Court in Am. Airlines Employees Fed.
Credit Union v. Martin was an amended agreement which customer Martin did not obtain at the
time but, nevertheless, “continued to maintain his account.” See Martin, 29 S.W.3d at 96.

                                            33
$22,722.69.” Br., p. 33. First, the math is incorrect; the invoices attached to the

first affidavit total $25,201.69—Appellant omitted to include the $2,479.00

appearing at CR335.21 Those invoices reflect time spent only through August 28,

2014. See CR361. Second, Mr. Huttenbach’s fee opinion on September 19, 2014

was for “at least” $28,840.19 and he allowed for another 12 hours in the event

there was a reply to prepare or a hearing to attend. CR331. There is no unexplained

discrepancy in connection with the first affidavit.

       Appellant argues that all the fee bills attached to the three affidavits “still do

not add up to the $49,186.65 awarded.” Br., p. 34. This is true: the attached fee

bills add to $51,728.05. See CR575; CR579; CR588; CR597; CR602; CR612;

CR619; CR724. Again, Mr. Huttenbach’s testimony was that reasonable and

necessary fees were “at least” $49,186.65, the amount awarded. CR716. Any error

in awarding the amount that counsel opined instead of the sum of all invoices is

harmless—actually beneficial— as to Appellant.

21
        Likewise, Appellant’s assertion that “all of his affidavits” state Mr. Huttenbach’s hourly
rate as $345.00 is not consistent with the record. See Br., p. 33. The September 19, 2014 affidavit
recites a $330.00 rate. CR331. The November 21, 2014 and December 5, 2014 affidavits both
recite a rate of $345.00. CR604; CR716. In any event, the parties agreed and expressly requested
the trial court to determine the reasonableness and necessity of Compass’s claim for fees based
on affidavits and argument. See Br., p. 31; CR698, et seq.; CR714.

                                               34
       Appellant also suggests the Mr. Huttenbach’s affidavits were “conclusory.”

Br., p. 34. 22 As the Court has written: “The term ‘conclusory’ is defined as

‘[e]xpressing a factual inference without stating the underlying facts on which the

inference is based.’” E.I. Du Pont De Nemours & Co. v. Shell Oil Co., 259 S.W.3d
800, 809 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (citing Black’s Law

Dictionary 284 (7th ed. 2001)). The argument is patently unavailing. Attorney

Huttenbach, an expert witness, gave his opinion. The opinion is based on personal

knowledge, the experience and factors set forth in three successive affidavits, and

is supported by authenticated, attached detailed billings to the client. See CR331, et

seq.; CR604, et seq.; CR716, et seq.

       Appellant further argues that Compass Bank’s evidence does not comply

with Long v. Griffin. 23 See 442 S.W.3d 253 (Tex. 2014). The Long case is

distinguishable but Compass Bank’s evidence, nevertheless, surpasses the stated

minimum standard. Not all claims asserted in Long would support an award of

fees; only those on which the Griffins prevailed within the scope of chapters 37 or

22
        The Vega case cited does not say any affidavit was conclusory, rather only that the
nonmovant created a fact issue. See Vega v. Compass Bank, 04-13-00383-CV, 2014 WL 953466,
at *3 (Tex. App.—San Antonio Mar. 12, 2014, no pet.).
23
        Appellant also cites City of Laredo v. Montano, 414 S.W.3d 731 (Tex. 2013). Montano,
like Long, references the same “basic proof” standard articulated in the El Apple I case (see p.
36, infra). 414 S.W.3d at 736. Compass’s expert provided more than “time estimates based on
generalities.” See id. He offered his qualifications, described certain tasks performed, and
assuming these were mere generalities, attorney Huttenbach referenced the attached pages with
time entries disclosing the dates, the timekeeper and his or her rate, the tasks performed, and
time billed in increments of 1/10th of an hour. See, e.g., CR334-62; CR608-19; CR718-24.

                                              35
38 of the Civil Practice and Remedies Code. Id. at 255; Tex. Civ. Prac. & Code §§

37.009, 38.001. Recoverability of fees in this case is based on the prevailing party

clause in a contract. And unlike Long, Mr. Huttenbach attached redacted invoices

to his affidavits; no such records were presented in Long. See Long, 442 S.W.3d at

255. Quoting its previous decision in El Apple I, Ltd. v. Olivas, the Long court

again described the minimum of sufficient evidence as “evidence ‘of the services

performed, who performed them and at what hourly rate, when they were

performed, and how much time the work required.’” Id. (quoting El Apple I, Ltd. v.

Olivas, 370 S.W.3d 757, 764 (Tex. 2012)). Compass Bank’s invoices include each

of these categories of information. See, e.g., CR334-62; CR608-19; CR718-24.

The trial court’s judgment should be affirmed.

   IV.   Appellant Failed to Conclusively Establish Entitlement to Summary
         Judgment

      For the reasons above, the trial court’s judgment should be affirmed.

Nevertheless, Compass Bank addresses Appellant’s argument that he should have

prevailed.

      Appellant failed to conclusively prove that he was entitled to summary

judgment on his breach of contract claim. See CR34 et seq. As set forth above,

Appellant did not conclusively establish the terms of “the” contract he alleges was

breached. He omitted to give effect to terms included in the signature card; he

failed to conclusively establish any factual basis for avoiding terms permitting

                                        36
amendments; he argued that the 2008 agreement applies, then tried in the same

motion to take advantage of the 2012 attorneys’ fees provision. On the other hand,

assuming without conceding and for purposes of argument only, that Compass

Bank did not conclusively prove that the 2012 deposit agreement applies, it at least

raised an issue of fact. For example, Ms. Mueller testified as custodian and on

personal knowledge that the 2012 deposit agreement is the correct agreement, in

effect between the parties. CR202.

      Even if not conclusively established (Compass Bank maintains it was),

Compass Bank did far more than merely raise a fact issue regarding the preclusion

in 4.406 of the Business and Commerce Code. See CR372, et seq. Compass Bank

made available the Account statements by (1) sending them to addresses of record

“deemed correct” by terms of the deposit agreement, (2) holding the statements

and never refusing any request from Appellant to provide copies, and (3) informing

Appellant of several different methods of contacting the bank to report any

problem, including that statements were no longer arriving as expected. Statements

of the Account were made available and Appellant’s corresponding section 4.406

duties were triggered. CR212; CR230.

      It is undisputed that Appellant did not report any exceptions. He did not

satisfy the condition precedent to maintaining a suit. Without conclusive proof of a

deposit contract that permits Appellant to completely ignore his Account for

                                        37
months on end, Appellant did not and cannot show himself entitled to summary

judgment. Without conclusive proof of a deposit contract that precludes Compass

Bank from relying on its unchallenged and deemed correct records to make

account statements available, Appellant did not and cannot show himself entitled

to summary judgment.

      Because the record conclusively proves that Appellant utterly ignored the

Account beginning at least 6 months before the first supposed unauthorized

transaction until 18 months after that transaction, his affirmative claims are also

precluded by section 3.406(a) of the Business and Commerce Code. Appellant was

negligent as a matter of law. That negligence substantially contributed to the

claimed forgery and Compass Bank was and remains entitled to the judgment

granted by the trial court. The judgment should be affirmed.

                                     Conclusion

      This case was disposed on cross motions for summary judgment. Therefore,

the Court determines all questions presented and renders the judgment that the trial

court should have rendered. See Berry v. Encore Bank, 01-14-00246-CV, 2015 WL
3485970, at *4 (Tex. App.—Houston [1st Dist.] June 2, 2015, no. pet. h.) (citing

Tex. Workers’ Comp. Comm’n v. Patient Advocates, 136 S.W.3d 643, 648 (Tex.

2004)). The trial court reached the correct result.

                                          38
      No reasonable person could possibly find that completely ignoring the

Account from January 2012 through January 2014 was anything other than

negligence, the antithesis of ordinary care. Appellant’s conclusively established

failure to exercise ordinary care for at least 24 months substantially contributed to

the making of the claimed forged signature.

      The contract between the parties required Appellant to review his account

information and to timely report all exceptions. Timely is contractually defined as

30 days. The deposit agreement provides that Appellant “[n]otify us promptly if

you do not receive your statement by the date you normally would expect to

receive it.” With the obligation to report exceptions within 30 days, Appellant

waited over 18 months to notify Compass Bank of anything. The agreement and

common sense required Appellant to speak up if he did not receive account

statements when he expected them. The agreement and common sense require that

Appellant keep track of his own financial affairs.

      Based on Appellant’s lack of diligence as a matter of law and its correct

interpretation of “make available” under the operative contract and the Business

and Commerce Code, the trial court properly and sustainably determined that

Compass Bank was entitled to summary judgment in its favor.

                                         39
                                       Prayer

      For at least the reasons set forth above, Appellee Compass Bank respectfully

asks this Court to affirm the judgment of the trial court.

                                        Respectfully submitted,

                                        HIRSCH & WESTHEIMER, P.C.

                                        By: /s/ Michael D. Conner
                                          Michael D. Conner
                                          State Bar No. 04688650
                                          mconner@hirschwest.com
                                          William P. Huttenbach
                                          State Bar No. 24002330
                                          phuttenbach@hirschwest.com
                                          1415 Louisiana, 36th Floor
                                          Houston, Texas 77002
                                          Telephone: (713) 220-9162
                                          Facsimile: (713) 223-9319

                                        Attorneys for Appellee, Compass Bank

                                          40
                           Certificate of Compliance

      I do hereby certify that the relevant contents of this document consist of
9,797 words, in compliance with Tex. R. App. P. 9.4(i) and this document
complies with the typeface requirements of Tex. R. App. P. 9.4(e) because it has
been prepared in a proportionally spaced typeface using Microsoft Word 2013 in
14 point Times New Roman font, except for footnotes which are in 12-point
typeface.

                                            /s/ Michael D. Conner
                                            Michael D. Conner

                             Certificate of Service

      I hereby certify that on this 22nd day of October, 2015, a true and correct
copy of the foregoing document was served as follows:

                             Michael O’Connor
                      O’CONNOR, CRAIG, GOULD & EVANS
                         2500 Tanglewilde, Suite 200
                           Houston, Texas 77063
                                Via Eservice

                                            /s/ Michael D. Conner
                                            Michael D. Conner

                                       41
                         Case No. 01-15-00210-CV

                    IN THE FIRST COURT OF APPEALS
                           HOUSTON, TEXAS

                     Francisco Calleja-Ahedo, Appellant

                                       v.

                          Compass Bank, Appellee

                         From Cause No. 2014-22168
               55th Judicial District Court, Harris County, Texas

                                 APPENDIX

Consumer Disclosure (2008 deposit agreement)                        Tab 1

Consumer Deposit Account Agreement (2012 deposit agreement)         Tab 2

                                      42
Ta
GousuMER Dlscr.osuRE

Effeetive August   21 2006

  Compass Banlç a member of the BBVA Group
Consumer Disclosure

Highllghts
    1.   Changes to Consumer Deposit Account Agreement           2
    2    Changesto Checking and SavingsAccounb                   4
Other Fees and Servlce Charges                                   I
Consumer Deposit Account Agreement                               11

    1, Definitions                                               11

    2, Account Operations                                        12
    3, Account Statements and Not'ces                            13
    4, Account Transactions                                      14
    5. Deposits, Colleetions and Payment of ltems                15
    6, Wìürdrawals                                               17
    7. Sub"accounts                                              17
    L    Arbitration                                             18
    9,   \Âhiver of Jury Trial                                   19
   10. Dormant and Abandoned/Unclaimed Accounts                  19
   11. SetOff                                                    t9
   12. Waivers                                                   19
   13. Other SeMees                                              1g
   '14. lnteres-t¡ lnterest Repoding                             20
   15. Changes to Account Status                                 20
   16, Applicable Law                                            20
   17. Additíonal Provísions                                     20
Fund¡ Arailabillty Disdosure                                     21

Elecironic F¡nd llansfer Dlsclosure St¡tement                    22
Tarpaye r ldentlf lcati o n N u m b ers (Bad Payments to nonresident aliens subject to withholding under Section 1441.
         > Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner
         > Payments of patronage dividends where the amount received is not paid in money.
         > Payments made by certain foreign organizations.
         > Payments of interest not generally subject to backup withholding include the following:
         > Payments of interest on obligations issued by individuals Note: You may be subject to backup withholding if this interest is
             $600 or more and is paid in the course of the payers trade or business and you have not provided your correct Taxpayer
             ldentification Number to the payer.
         >   Payments of tax-exempt interest (including exempfinterest dividends under Section 852)
         >   Payments described in Section 6059bX05)to nonresident aliens.
         >   Payments on taxÍree covenant bonds under Section        1451
         >   Payments made by certain foreign organizations.
         >   lf you are uncertaìn   whether you qualify as an exempt recipient, call your accountant or the lnternal Revenue Service

To avoid possible withholding, exempt recipients should complete the form(s) provided by Compass and should check the box captioned
Exempt Reclpients The form should also contain your Taxpayer ldentification Numbel and the certification statement must be signed
The form must then be returned to Compass.

PENALTIES
1.   Penalty for Failure to Furnish Taxpayer ldentification Number. lf you fail to furnish your taxpayer identification number to a payer,
     you are subject to a penalty of $50 for each such failure unless your failure ìs due to reasonable cause and not to willful neglect.

2.   Failure to Report Certain Dividend and lnterest Payments. lf you failto include any portion of an includible payment for interest,
     dividends or patronage dividends in gross income, such failure will be treated as being due to negligence and will be subject to a
     penalty of 5% on any portion of an underpayment attributable to that failure unless there ls clear and convincing evidence to the
     contrary.

3.   Civil Penalty for False lnformation With Respect to Withholding. lf you make a false statement with no reasonable basis that results
     in no imposition of backup withholding, you are subject to a penalty of 9500

4,   Criminal Penalty for Falsifying lnformation. Falsifying certifications or affirmations may subject you to criminal penalties including
     fines and/or imprisonment

20
IMPORTANT INFORMATION ABOUT YOUR CHECKING ACCOUNT (Check 21)
Substitute Checks and Your Rights

What     is a   substltute check?
To make check processing faster, federal law permits banks to replace original checks with "substitute checks" These checks are similar
in size to original checks with a slightly reduced image of the front and back of the original check. The front of a substitute check states:
"This is a legal copy of your check You can use
                                                   it the same way you would use the original check" You may use a substitute check as
proof of payment just like the original check. Some or all of the checks that you receive back from us may be substitute checks. This
notice describes rights you have when you receive substitute checks from us The rights in this notice do not apply to original checks or to
electronic debìts to your account However, you have rights under other law with respect to those transactìons.

What are mv riohts reoardino substitute checks?
ln certain cases, federal law provides a special procedure that allows you to request a refund for losses you suffer if a substitute check is
posted to your account (for example, if you think that we withdrew the wrong amount from your account or that we withdrew money
from your account more than once for the same check). The losses you may attempt to recover under this procedure may include the
amount that was withdrawn from your account and fees that were charged as a result of the withdrawal (for example, NSF fees)

The amount of your refund under this procedure is limited to the amount of your loss or the amount of the substitute check, whichever is
less. You also are entitled to interest on the amount of your refund if your account is an interest-bearing account lf your loss exceeds the

amount of the substitute check, you may be able to recover additional amounts under other law

lf you use this procedure, you may receive a refund of up to $2,500 or the amount of the substitute check, whichever is less, (plus interest
if   your account earns interest) within 10 business days after we received your claim and the remainder of your refund (plus interest   if   your
account earns interes0 not later than 45 calendar days after we received your claim

We may reverse the refund (including any interest on the refund) if we later are able to demonstrate that the substitute check was
correctly posted to your account

How do I make a claim for a refund?
lf you believe that you have suffered a loss relating to a substitute check that you received and that was posted to your account, please

contact us at:Compass Bank, Attention: Electronic Banking P0. Box 10566, Birmingham, AL 35296 or telephone number 1-BOO-
COIVPASS.

You must contact us within 40 calendar days of the date that we mailed (or otherwise delivered by a means to which you agreed) the
substitute check in question or the account statement showing that the substitute check was posted to your account, whichever is later.
We will extend this time period lf you were not able to make a timely claim because of extraordinary circumstances

Your claim must include       -
'      A description of why you have suffered a loss (for example, you think the amount withdrawn was incorrect);
.      An estimate of the amount of your loss;
'     An explanation of why the substitute check you receìved is insufficient to confirm that you suffered a loss: and
'     A copy of the substitute check or the following information to help us identify the substitute check: the check number, the name of the
      person to whom you wrote the check and the amount of the check

                                                                                                                                                21
Revision Feb,2012. Al Nova Branches Only
BBVA Compass is a trade name of Compass Bank,
a member of the BBVA Group. Compass Bank, Member FDIC.

99-36-2067