Texas Causes of Action & Affirmative Defenses

Texas Causes of Action & Affirmative Defenses

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Thursday, January 12, 2012

Sworn account suit under TRCP 185 not available for any and all types of claims involving an unpaid account

Suit for unpaid electrical power service may be brought as sworn account, but claim for early termination fee required proof of breach of the underlying contract, according to an opinion issued by Houston's First Court of Appeals today.   
Rule 185 of the Texas Rules of Civil Procedure, entitled Suit on Account, provides:
When any action or defense is founded upon an open account or other claim for goods, wares and merchandise, including any claim for a liquidated money demand based upon written contract or founded on business dealings between the parties, or is for personal service rendered, or labor done or labor or materials furnished, on which a systematic record has been kept, and is supported by the affidavit of the party, his agent or attorney taken before some officer authorized to administer oaths, to the effect that such claim is, within the knowledge of affiant, just and true, that it is due, and that all just and lawful offsets, payments and credits have been allowed, the same shall be taken as prima facie evidence thereof, unless the party resisting such claim shall file a written denial, under oath. A party resisting such a sworn claim shall comply with the rules of pleading as are required in any other kind of suit, provided, however, that if he does not timely file a written denial, under oath, he shall not be permitted to deny the claim, or any item therein, as the case may be. No particularization or description of the nature of the component parts of the account or claim is necessary unless the trial court sustains special exceptions to the pleadings.
The elements of a suit on a sworn account claim are thus (1) the sale and delivery of merchandise or performance of services; (2) that the amount of the account is “just,” that is, the prices charged are pursuant to an express agreement, or in the absence of an agreement, that the charges are usual, customary, or reasonable; and (3) that the outstanding amounts remain unpaid. E.g., Powers v. Adams, 2 S.W.3d 496, 499 (Tex. App.—Houston [14th Dist.] 1999, no pet.).
Rule 185 is a procedural tool that limits the evidence necessary to establish a prima facie right to recovery on certain types of accounts.” Williams v. Unifund CCR Partners Assignee of Citibank, 264 S.W.3d 231, 234 (Tex. App.—Houston [1st Dist.] 2008, no pet.). “Rule 185 applies only to ‘transactions between persons, in which there is a sale upon one side and a purchase upon the other, whereby title to personal property passes from one to the other, and the relation of debtor and creditor is thereby created by general course of dealing . . . .’” Id. (quoting Meaders v. Biskamp, 316 S.W.2d 75, 78 (Tex. 1958) (emphasis in original)). “It does not apply to transactions between parties resting upon a special contract.” Id. (quoting Meaders, 316 S.W.2d at 78).
The trial court’s $29,615.04 award was made up of $12,994.18 for unpaid electrical service and a $16,620.86 early termination fee. A suit on a sworn account applies to the sale of electric service. See generally Rimco Enters., Inc. v. Texas Elec. Serv. Co., 599 S.W.2d 362, 365 (Tex. Civ. App.—Fort Worth 1980, writ ref’d n.r.e.).
While the defendants dispute here that the electric service charges were reasonable, accurate, or just, Affordable Power’s petition attached an affidavit, made on the affiant’s personal knowledge, attesting that:
Attached to this affidavit is the final bill and/or invoice that was sent to the listed customer. The final invoice was based on an open account with the customer for goods and/or services rendered. The final invoice is part of our systematic records, based on goods and/or services provided to the customer. A true and correct copy of the Contract Agreement with the listed customer and Terms of Service is attached as Exhibit “1” of this Petition.
The final invoice accurately reflects charges for goods and/or services provided. The amount of the account is just and true, it is due, the prices were charged according to a written contract with the customer and the charges are usual, customary and reasonable. The just and true amount of $29,615.04 plus interest, is currently due having been unpaid by the customer. This amount includes all lawful offsets, payments and credits.
Because this affidavit meets the requirements to establish a prima facie case under Rule 185, the defendants’ failure to file a verified denial would have precluded them from disputing the $12,994.18 charges for electrical service on Affordable Power’s suit on a sworn account at trial. See Vance v. Holloway, 689 S.W.2d 403, 404 (Tex. 1985).
For the reasons further explained below, however, we nonetheless remand Affordable Power’s claim based on unpaid electrical services to the trial court because judgment on that claim is not “separable without unfairness to the parties” from the judgment on Affordable Power’s breach of contract claim related to the termination fee, which is not supported by legally sufficient evidence. Tex. R. App. P. 44.1(b); Iron Mountain Bison Ranch, Inc. v. Easley Trailer Mfg., Inc., 42 S.W.3d 149, 162 (Tex. App.—Amarillo 2000, no pet) (“Given the intertwined nature of appellee’s promissory estoppels theory and its other theories, we remand the promissory estoppel issue for a new trial in the interest of justice.”).

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