FINANCIAL INSTITUTION'S LEGAL THEORY FOR COLLECTION OF CREDIT CARD DEBT IN TEXAS COURTS: BREACH OF CONTRACT
In Texas, collection of the amount due under a credit card agreement is treated as a claim for a breach of contract. In re Tran, 351 B.R. 440, 445 (Bankr. S.D. Tex. 2006), aff'd, 369 B.R. 312 (S.D. Tex. 2007); see Tully v. Citibank (South Dakota), N.A., 173 S.W.3d 212, 215-20 (Tex. App.-Texarkana 2005, no pet.).
ELEMENTS OF BREACH OF CONTRACT CLAIM
To recover for breach of contract, a plaintiff must show (1) the existence of a valid contract, (2) the plaintiff performed or tendered performance, (3) the defendant breached the terms of the contract, and (4) the plaintiff suffered damages as a result of the defendant's breach. Transworld Leasing Corp. v. Wells Fargo Auto Fin., LLC, No. 04-12-00036-CV, 2012 WL 4578591, at *3 (Tex. App.-San Antonio 2012, pet. denied); McLaughlin, Inc. v. Northstar Drilling Tech., Inc., 138 S.W.3d 24, 27 (Tex. App.-San Antonio 2004, no pet.).
Thus, in this case, the Credit Union had the burden to prove each element of a breach of contract claim at trial. See Preston State Bank v. Jordan, 692 S.W.2d 740, 744 (Tex. App.-Fort Worth 1985, no writ) (affirming a take-nothing judgment in a suit to recover a credit card debt when the bank failed to present evidence of the contract between the bank and the credit card holder).
CONTRACT FORMATION, MATERIAL TERMS (CREDIT AND REPAYMENT TERMS), AND BREACH
Parties form a binding contract when the following elements are present: (1) an offer; (2) an acceptance in strict compliance with the terms of the offer; (3) a meeting of the minds; (4) each party's consent to the terms; and (5) the execution and delivery of the contract with the intent that it be mutual and binding. Williams v. Unifund CCR Partners Assignee of Citibank, 264 S.W.3d 231, 236 (Tex. App.-Houston [1st Dist.] 2008, no pet.).
To be enforceable, a contract must be sufficiently certain to enable a court to determine the rights and responsibilities of the parties. T.O. Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). The material terms of a contract must be agreed upon before a court can enforce the contract. Id. A breach of contract occurs when a party to the contract fails or refuses to do something he has promised to do. West v. Triple B Services, LLP, 264 S.W.3d 440, 446 (Tex. App.-Houston [14th Dist.] 2008, no pet.).
SOURCE: SAN ANTONIO COURT OF APPEALS - 04-12-00080-CV – 6/12/2013
Hooper v. Generations Community Federal Credit Union
Credit Union failed to prove breach-of-contract claim by failing to submit the contract under which it sought to hold the customer liable, and failing to show breach of specific terms.
We conclude the record discloses the complete absence of evidence of the third element of the Credit Union's breach of contract claim, i.e., that Hooper breached the terms of an agreement with the Credit Union. In the absence of evidence that Hooper failed or refused to do something he promised to do under an agreement, the Credit Union failed to prove its breach of contract claim. See Pioneer Land & Cattle Co. v. Collier, No. 07-12-00320-CV, 2013 WL 2150814, at *6 (Tex. App.-Amarillo 2013, no pet. h.) (concluding the trial court did not err in granting a no-evidence summary judgment on the plaintiff's breach of contract claim when there was no evidence of the first, third, or fourth elements of the claim). We, therefore, hold the evidence was legally insufficient to support the trial court's judgment. Hooper's second issue is sustained.