Legal sufficiency of evidence to support credit card debt claim: Proof of contract terms required

CREDITOR MUST PROVE AGREEMENT ON SPECIFIC TERMS OF GOVERNING EXTENSION OF CREDIT 

In a bench trial in which no findings of fact or conclusions of law are requested by the parties or filed by the trial court, we imply all findings of fact necessary to support the judgment. See, e.g., BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002). When the appellate record includes the reporter's and clerk's records, these implied findings are not conclusive and may be challenged for legal and factual sufficiency in the appropriate appellate court. Id. We review the sufficiency of the evidence supporting the findings by applying the same standards that we use in reviewing the legal or factual sufficiency of the evidence supporting jury findings. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994); see Dittman v. Cerone, No. 13-11-00196-CV, 2013 WL 5970356, at *3 (Tex. App.-Corpus Christi Oct. 31, 2013, no pet.) (mem. op. on reh'g).

The test for legal sufficiency is "whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review." City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). In making this determination, we credit favorable evidence if a reasonable fact-finder could, and disregard contrary evidence unless a reasonable fact-finder could not. Id. So long as the evidence falls within the zone of reasonable disagreement, we may not substitute our judgment for that of the fact-finder. Id. at 822. The trier of fact is the sole judge of the credibility of the witnesses and the weight to give their testimony. Id. at 819. Although we consider the evidence in the light most favorable to the challenged findings, indulging every reasonable inference that supports them, we may not disregard evidence that allows only one inference. Id. at 822.

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. Woodhaven Partners, Ltd. v. Shamoun & Norman, LLP, 422 S.W.3d 821, 837 (Tex. App.-Dallas 2014, no pet.); Williams v. Unifund CCR Partners Assignee of Citibank, 264 S.W.3d 231, 235-36 (Tex. App.-Houston [1st Dist.] 2008, no pet.); McLaughlin, Inc. v. Northstar Drilling Tech., Inc., 138 S.W.3d 24, 27 (Tex. App.-San Antonio 2004, no pet.).

Thus, in this case, Pharia 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).

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, 264 S.W.3d at 236. 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; the interest rate is a material term. Id.

SOURCE: Court of Appeals of Texas, Thirteenth District,Corpus Christi, Edinburg. - No. 13-13-00551-C - 7/17/2014

ASSIGNEE OF CREDIT CARD ISSUER FAILED TO PROVE THE CONTRACT TERMS

As noted, the only evidence offered by Pharia of a valid contract was two pages reflecting a copy of a Bank of America cardholder agreement in print so small that the copies are rendered illegible. 

Although the "Affidavit of Indebtedness and Assignment" by Halpin states that the balance due on Uribe's account is "$2,789.70 plus interest per the terms of the agreement between the defendant and the original creditor at the rate of 28.99% per annum," there is no evidence establishing Uribe's specific obligations under the agreement or that Uribe agreed to the interest rate asserted by Halpin. 

Also, there is no evidence explaining how the $2,789.70 balance stated by Halpin became the $4,285.31 balance claimed by Pharia. The several account statements and several pages of text that appear to be a card member agreement were in Spanish, and Pharia provided no translation of the documents. See TEX. R. EVID. 1009(a) (providing that English translations of foreign-language documents are admissible in certain circumstances, not applicable here). 

We conclude that, although there is evidence of a credit-card agreement of some kind, there was no evidence proving the terms of that agreement or Uribe's intent to be bound by a specific agreement. See Williams, 264 S.W.3d at 236 (holding evidence was insufficient to establish the terms of a valid contract as a matter of law where creditor failed to produce actual credit-card agreement or any other document that established the agreed terms, including the applicable interest rate or method for determining finance charges); Tully v. Citibank (S.D.), N.A., 173 S.W.3d 212, 216-17 (Tex. App.-Texarkana 2005, no pet.) (holding evidence insufficient to show interest rate charged was agreed on where the only evidence was the rates specified in monthly statements); Jordan, 692 S.W.2d at 744 (holding evidence insufficient to establish a contract where creditor failed to introduce contract or its terms and conditions); see also Hooper v. Generations Cmty. Fed. Credit Union, No. 04-12-00080-CV, 2013 WL 2645111, at *3 (Tex. App.-San Antonio June 12, 2013, no pet.) (mem. op.) (reversing judgment for creditor where cardholder agreement was not offered into evidence and there was no evidence establishing debtor's specific obligations under an agreement); Colvin v. Tex. Dow Employees Credit Union, No. 01-11-00342-CV, 2012 WL 5544950, at *6 (Tex. App.-Houston [1st Dist.] Nov. 15, 2012, no pet.) (mem. op.) (reversing summary judgment for creditor where creditor failed to offer the original agreement, monthly statements, or other evidence establishing how it calculated its alleged damages); Martin v. Federated Capital Corp., No. 01-12-00116-CV, 2012 WL 4857835, at **2-3 (Tex. App.-Houston [1st Dist.] Oct. 11, 2012, no pet.) (mem. op.) (reversing summary judgment for creditor where creditor's evidence failed to explain how it calculated its damages); Ayers v. Target Nat'l Bank, No. 14-11-00574-CV, 2012 WL 3043043, at **2-4 (Tex. App.-Houston [14th Dist.] July 26, 2012, no pet.) (mem. op.) (reversing summary judgment for creditor where creditor failed to present cardholder agreement and a portion of the form language on the credit-card application was illegible and form language was in Spanish); Wande v. Pharia, No. 01-10-00481-CV, 2011 WL 3820774, at *5 (Tex. App.-Houston [1st Dist.] Aug. 25, 2011, no pet.) (mem. op.) (reversing summary judgment for creditor where creditor presented the cardholder agreement but important portions of the agreement were illegible, including a section entitled "Finance Charges," and creditor presented no evidence regarding the calculations it used to arrive at claimed outstanding balance); Jaramillo v. Portfolio Acquisitions, LLC, No. 14-08-00938-CV, 2010 WL 1197669, at **5-6 (Tex. App.-Houston [14th Dist.] March 30, 2010, no pet.) (mem. op.) (holding evidence insufficient to establish a valid contract where card member agreement was entered into evidence, but many of its material terms were missing; "This court and its sister court have drawn a distinction between cases where a card member agreement is entered into evidence and where there is no card member agreement.").

Considering the evidence in the light most favorable to the challenged finding, see City of Keller, 168 S.W.3d at 822, we conclude that no reasonable fact-finder could have found the evidence sufficient to establish the existence of a valid contract. See Williams, 264 S.W.3d at 236; T.O. Stanley Boot Co., 847 S.W.2d at 221. The evidence was therefore legally insufficient to establish the existence of a valid contract. We sustain Uribe's second issue.

CONCLUSION

Because we hold the evidence insufficient to establish the existence of a valid contract, we reverse the trial court's judgment and render judgment that Pharia take nothing.  

SOURCE: CORPUS CHRISTI COURT OF APPEALS - 13-13-00551-C - 7/17/2014 (Uribe v Pharia) 

Suit on sworn account is not a cause of action, but a different way to plead a common-law suit on account

San Antonio Court of Appeals reiterates that a sworn account is not a cause of action in its own right, but instead a procedural vehicle to present a prima facie case. The benefit of a prime facie case under Rule 185 are lost when the defendant files a sworn denial. When that happens, the plaintiff must prove the suit on account under the ordinary evidentiary standards (i.e. those applicable to a trial on the merits, or for summary judgment).  

NATURE OF SWORN ACOUNT SUIT (TRCP 185)

A suit on a sworn account is not an independent cause of action. Southern Mgmt. Servs., Inc. v. SM Energy Co., No. 14-12-00377-CV, 2013 WL 793153, at *2 (Tex. App.-Houston [14th Dist.] Mar. 5, 2013, no pet. h.). "It is based instead on Rule 185, which affords a procedural right of recovery in certain contract disputes." Id.; see also Pine Trail Shores Owners Ass'n v. Aiken, 160 S.W.3d 139, 144 (Tex. App.-Tyler 2005, no pet.) (noting Rule 185 is not a rule of substantive law and suit on sworn account is not a cause of action).
   

SOURCE: SAN ANTONIO COURT OF APPEALS - 04-12-00029-CV – 6/5/2013
   

ADDITIONAL SWORN ACCOUNT CLIPS:

 

Under rule 185 of the Texas Rules of Civil Procedure, when an action is founded on an open account on which a systematic record has been kept and is supported by an affidavit, the account shall be taken as prima facie evidence of the claim, unless the party resisting the claim files a written denial under oath. See Tex. R. Civ. P. 185; Panditi v. Apostle, 180 S.W.3d 924, 926 (Tex. App.-Dallas 2006, no pet.).

SUBSTANTIVE ELEMENTS OF SWORN ACCOUNT (common-law suit on account) 
   

 

SUBSTANTIVE SWORN ACCOUNT ELEMENTS

 

The essential elements to prove a sworn account are: (1) that there was a sale and delivery of merchandise or performance of services; (2) that the amount of the account is just, that is, that the prices were charged in accordance with an agreement or were customary and reasonable prices; and (3) that the amount is unpaid. Adams v. H & H Meat Prods., Inc., 41 S.W.3d 762, 773 (Tex. App.-Corpus Christi 2001, no pet.). See also Cass v. Stephens, 156 S.W.3d 38, 70 (Tex. App.-El Paso 2004, pet. denied); Burch v. Hancock, 56 S.W.3d 257, 264 (Tex. App.-Tyler 2001, no pet.); Tex. R. Civ. P. 185.   

SALES TRANSACTION REQUIRED

A "sale and delivery of merchandise or performance of services" is one of the elements essential to prove a sworn account. Adams, 41 S.W.3d at 773.

A "sale" consists in the passing of title from the "seller" to the "buyer" for a price. Tex. Bus. & Com. Code Ann. § 2.106(a) (Vernon 1994). "Buyer" means a person who buys or contracts to buy goods. Tex. Bus. & Com. Code Ann. § 2.103(a)(1) (Vernon Supp. 2006). "Seller" means a person who sells or contracts to sell goods. Id. § 2.103(a)(4). Unless otherwise agreed by the parties, title to goods passes to the buyer at the time and place of delivery. Tex. Bus. & Com. Code Ann. § 2.401(b) (Vernon Supp. 2006).

SOURCE: DALLAS COURT OF APPEALS - 05-06-00216-CV - 2/23/2007

Credit card debt claim as breach of contract (breach of cardmember or account agreement) in Texas courts

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.
 

Winchek v. American Express: Proof requirements for Breach of contract (breach of credit card agreement)

Winchek v. Amex is a much-cited case for the elements of a breach of contract claim under Texas law, and the elements of contract formation. The case involved a credit card account, but the articulation of the relevant law applies generally, whether contracts are signed or not. American Express cardmember agreements typically have a Utah choice-of-law provision, but that rarely becomes an issue in debt collection litigation in Texas courts, which are routinely resolved under Texas law. 
  

To prove a claim for breach of contract, a party must establish: (a) a valid contract; (b) the party performed or tendered performance; (c) the opposing party breached the contract; and (d) the party was damaged as a result of that breach. Winchek v. Am. Express Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.-Houston [1st Dist.] 2007, no pet.); Hackberry Creek Country Club, Inc. v. Hackberry Creek Home Owners Ass'n, 205 S.W.3d 46, 55 (Tex. App.-Dallas 2006, pet. denied).

To prevail on a breach of contract claim, a plaintiff must prove the following essential elements: (1) the existence of a valid contract, (2) performance or tendered performance by the plaintiff, (3) breach of the contract by the defendant, and (4) damages sustained as a result of the breach. Winchek v. Am. Express Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.-Houston [1st Dist.] 2007, no pet.).

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) meeting of the minds, (4) each party's consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding. Id. at 202. To be enforceable, a contract must be sufficiently certain to enable a court to determine the rights and responsibilities of the parties. Id. (citing T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992)).

Suit to enforce guaranty agreement upon default on promissory note or other contract by maker or obligor

 
NATURE OF GUARANTY AND ELEMENTS OF CLAIM BASED ON IT

WHAT IS A GUARANTY AGREEMENT?
  
“A guaranty creates a secondary obligation whereby the guarantor promises to answer for the debt of another and may be called upon to perform once the primary obligor has failed to perform.” Dann v. Team Bank, 788 S.W.2d 182, 183 (Tex. App.-Dallas 1990, no writ).
 
ELEMENTS OF PROOF
 
To recover under a guaranty, a claimant must prove (1) the existence and ownership of the guaranty agreement, (2) the terms of the underlying contract by the holder, (3) the occurrence of the conditions upon which liability is based, and (4) the guarantor's failure or refusal to perform the promise. Marshall v. Ford Motor Co., 878 S.W.2d 629, 631 (Tex. App.-Dallas 1994, no writ).
 
SOURCE: DALLAS COURT OF APPEALS - 05-10-00693-CV - 5/8/2012

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.   
  
SUIT ON A SWORN ACCOUNT
   
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).
 
SOURCE: HOUSTON COURT OF APPEALS - FIRST DISTRICT - 01-11-00027-CV - 1/12/12
 
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.”).
 
SOURCE: HOUSTON COURT OF APPEALS - FIRST DISTRICT - 01-11-00027-CV - 1/12/12

What is "Money Had and Received"? It does not sound like a cause of action, but ...

 
...it functions as one under Texas case law precedents:
  
ASSUMPSIT - MONEY HAD AND RECEIVED [MHnR] AS A THEORY OF RECOVERY / REIMBURSEMENT  / RESTITUTION
 
Assumpsit For Money Had And Received
 
According to legal historians, assumpsit was developed to redress circumstances involving unjust enrichment or an implied promise to pay what in good conscience defendant was bound to pay the plaintiff. Tri-State Chem., Inc. v. Western Organics, Inc., 83 S.W.3d 189, 193-94 (Tex. App.-Amarillo 2002, pet. denied). Over time, assumpsit was divided into various categories. Id. at 194.
 
Money had and received is a category of general assumpsit to restore money where equity and good conscience require refund. Amoco Prod. Co. v. Smith, 946 S.W.2d 162, 164 (Tex. App.-El Paso 1997, no writ). “The question, in an action for money had and received, is to which party does the money, in equity, justice, and law, belong.
 
All plaintiff need show is that defendant holds money which in equity and good conscience belongs to him.” Staats v. Miller, 150 Tex. 581, 584, 243 S.W.2d 686, 687-88 (1951) (quoting 58 C.J.S., Money Received § 4a). A cause of action for money had and received is “less restricted and fettered by technical rules and formalities than any other form of action. It aims at the abstract justice of the case, and looks solely to the inquiry, whether the defendant holds money which . . . belongs to the plaintiff.” Id. (quoting United States v. Jefferson Elec. Mfg. Co., 291 U.S. 386, 402-03 (1934)).
  
AN EQUITABLE REMEDY
  
A cause of action for money had and received is not premised on wrongdoing, but “looks only to the justice of the case and inquires whether the defendant has received money which rightfully belongs to another.” Amoco, 946 S.W.2d at 164. Such an action may be maintained to prevent unjust enrichment when a party obtains money which in equity and good conscience belongs to another. Everett v. TK-Taito, L.L.C., 178 S.W.3d 844, 860 (Tex. App.-Fort Worth 2005, no pet.); J.C. Penney Co., Inc. v. Pitts, 139 S.W.3d 455, 457 n.4 (Tex. App.-Corpus Christi 2004, no pet.) (citing Staats, 243 S.W.2d at 687). In short, it is an equitable doctrine applied to prevent unjust enrichment. Everett, 178 S.W.3d at 860; Hunt v. Baldwin, 68 S.W.3d 117, 132 (Tex. App.-Houston [14th Dist.] 2001, no pet.).
 
To prove a claim for money had and received, a plaintiff must show that a defendant holds money which in equity and good conscience belongs to him. Edwards v. Mid- Continent Office Distrib., L.P., 252 S.W.3d 833, 837 (Tex. App.-Dallas 2008, pet. denied). In defending against such a claim, a defendant may present any facts and raise any defenses that would deny a claimant's right under this theory. Best Buy Co. v. Barrera, 248 S.W.3d 160, 162 (Tex. 2007) (per curiam); Hunter v. PriceKubecka, PLLC, 339 S.W.3d 795, 807 (Tex. App.-Dallas 2011, no pet.).
 
A recovery under assumpsit for money had and received does not “depend on the parties' agreement or intent but rather the law's presumption of a promise of compensation if one receiving another's money would thereby be unjustly enriched.”Amoco, 946 S.W.2d at 164.
  
EXPRESS CONTRACT NORMALLY PRECLUDES RECOVERY UNDER ALTERNATIVE EQUITABLE THEORIES
   
Generally, when a valid, express contract covers the subject matter of the parties' dispute, there can be no recovery under a quasi-contract theory. Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000); McAfee, Inc. v. Agilysys, Inc., 316 S.W.3d 820, 828 (Tex. App.-Dallas 2010, no pet.). The quasi-contractual action for money had and received is a cause of action for a debt not evidenced by a written contract between the parties. See Edwards, 252 S.W.3d at 836; see also Amoco, 946 S.W.2d at 164.
  
SOURCE: DALLAS COURT OF APPEALS - 05-10-00410-CV - 1/10/12

Sworn Account suit requires more than a verified general denial to destroy prime-facie case if the petition conforms with TRCP 185

    
An answer in the form of a general denial does not controvert a prima-face case under Rule 185 (Suit on [sworn] Account) even if it puts all claims and facts in issue in other civil suits in Texas courts. Because the evidentiary presumption in favor of the plaintiff created by the sworn account rule is not destroyed, judgment may be had on the pleadings without the need for additional summary judgment evidence. Rule 185 provides an exception to the general rule that pleadings are not evidence and cannot support a judgment, standing alone. 
     

A SUIT ON SWORN ACCOUNT UNDER TEX. R. CIV. P. 185 IS DIFFERENT FROM OTHER CIVIL LAWSUITS

  

Under rule 185, a suit on a sworn account must contain a systematic record of the goods sold or services rendered and be supported by an affidavit stating that the “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.” Tex. R. Civ. P. 185. This is a rule of procedure regarding the evidence necessary to establish a prima facie right of recovery.. Panditi v. Apostle, 180 S.W.3d 924, 926 (Tex. App.--Dallas 2006, no pet.). An open account .on which a systematic record has been kept and is supported by an affidavit. is prima facie evidence of a claim. Id. A plaintiff claiming a suit on a sworn account is not required to formally introduce the account as evidence of the debt. Brown Found. Repair & Consulting, Inc. v. Friendly Chevrolet Co., 715 S.W.2d 115, 116 (Tex. App.--Dallas 1986, writ ref'd n.r.e.).

The evidentiary presumption can be defeated, and the plaintiff forced to introduce proof of its claim, if the defendant files a sworn denial of the plaintiff's account supported by an affidavit denying the account as required by rule 93(10). See Tex. R. Civ. P. 93(10); Powers v. Adams, 2 S.W.3d 496, 498 (Tex. App.--Houston [14th Dist.] 1999, no pet.). But a sworn general denial does not constitute a denial of the account and is insufficient to remove the evidentiary presumption created by a properly worded and verified suit on an account. See Panditi, 180 S.W.3d at 927; Andrews v. East Tex. Med. Ctr., 885 S.W.2d 264, 268 (Tex. App.--Tyler 1994, no writ); Cooper v. Scott Irrigation Const., Inc., 838 S.W.2d 743, 746 (Tex. App.--El Paso 1992, no writ); Huddleston v. Case Power and Equipment Co., 748 S.W.2d 102, 103 (Tex. App.--Dallas 1988, no writ). Moreover, the defendant's written denial must state more than a .broad generalization that he .specially denies' each and all of the allegations . . . [and must] address the facts on which he intends to rebut the plaintiff's affidavit.. Andrews, 885 S.W.2d at 268. A defendant is not required to file a sworn denial if the plaintiff's suit on a sworn account was not properly pleaded. Panditi, 180 S.W.3d at 927.        
   

In this case, appellee sued appellant based on a sworn account for liquidated damages under rule 185. Appellee alleged that it delivered “certain goods, wares and merchandise and/or personal services” to appellant, that appellant agreed to pay appellee the sums charged, and that, after all “just and lawful offsets, payments and credits,” the sum of $775.68 was past due and owing. In addition, appellee sought $300 in reasonable attorney's fees. Appellee's petition included an affidavit from Bong Hoe Kim, president of Everbeauty, Inc. d/b/a Hair to Go, alleging that appellant's account, which was attached to the affidavit and incorporated by reference, was true and correct. Appellant's last responsive pleading, a verified “Fifth Amended Answer and Petition for Declaratory Judgement,” in addition to containing a general denial, included the following list of matters that were designated as defenses:

1. Defendant affirmatively claims defense of estoppel.

2. Defendant affirmatively claims defense of accord and satisfaction.

3. Defendant affirmatively claims defense of latches.

4. Defendant affirmatively claims defense of statute of limitations.

5. Defendant pleads defense of waiver.

6. Defendant pleads defense of satisfaction.

7. Defendant pleads defense of offsets for the returned merchandises to Plaintiff.

8. Defendant pleads defense of credit for the returned merchandises to Plaintiff.

9. Defendant pleads that he was always willing and able to pay Plaintiff any amount that was owed to Plaintiff.

10. Defendant pleads that attorney's fees requested by Plaintiff be denied because Defendant was always willing and able to pay the appropriate amount that was owed to Plaintiff.

11. Any demands for payment by Plaintiff was excessive and in bad faith. Therefore, attorney's fees for Plaintiff should be denied.

    

Attached to appellant's answer was a business records affidavit from Chu Chang Shu, the custodian of records for Q Hair Beauty Supply II, that included two collection notices, a UPS merchandise return receipt, an invoice, and a translated statement signed by appellee's salesperson on June 27, 2006.

  

At the trial held before the court on July 12, 2010, appellee's counsel requested judgment based on the rule 185 pleading and appellant's failure to file a verified denial of the account. The trial court discussed with counsel for both parties the sufficiency of appellant's answer and defenses. The court told appellant's trial counsel that appellant's answer and accompanying business records affidavit were insufficient to remove the evidentiary presumption because they did not allege any facts rebutting appellee's affidavit. The trial court heard argument from both parties before granting judgment for appellee, after which it listened to testimony from appellee's counsel regarding attorney's fees. The court did not enter findings of fact and conclusions of law.

   

Appellant now argues that the trial court “refused to hear [appellant's] defenses,” and that “failure to comply with the rule requiring sworn denials . . . does not foreclose assertion of other defenses that are not inconsistent with a true and just account for goods as delivered.” But appellant's written denial did not comply with rule of civil procedure 93(10), “which requires a special verified denial of the account to put plaintiff's claim at issue.. Huddleston, 748 S.W.2d at 103; see Tex. R. Civ. P. 93(10). Appellant denied .each and every allegation of [appellee's] [p]etition” and demanded “strict proof thereof.” This general denial, however, even though sworn to, did not constitute a denial of the account, and it was insufficient to rebut the evidentiary effect of appellee's pleadings. See Tex. R. Civ. P. 185, 93(10); Andrews, 885 S.W.2d at 268; Cooper, 838 S.W.2d at 746; Huddleston, 748 S.W.2d at103-04; see also Panditi, 180 S.W.3d at 927; Nguyen v. Short, How, Frels & Heitz, P.C., 108 S.W.3d 558, 562 (Tex. App.--Dallas 2003, pet. denied); Seisdata, Inc. v. Compagnie Generale de Geophysique, 598 S.W.2d 690, 692 (Tex. App.--Houston [14th Dist.] 1980, writ ref'd n.r.e.). As we have observed, “[a] defendant resisting a suit on a sworn account must comply with the rules of pleading and timely file a verified denial or he will not be permitted to dispute the receipt of the services or the correctness of the charges.” Panditi, 180 S.W.3d at 927 (citing, in part, rules 185 and 93(10)). “In other words, a defendant's noncompliance with rule 185 conclusively establishes that there is no defense to the suit on the sworn account.” Nguyen, 108 S.W.3d at 562.

Pursuant to the rules that govern sworn accounts, appellee presented a prima facie case and was not required to offer additional proof. The record also shows that appellant never offered evidence regarding any affirmative defenses, nor did it seek evidentiary rulings from the court, and it did not make an offer of proof or file a bill of exception. We further note that although appellant cites Cooper and Seisdata to support its argument, neither case suggests a party is free to argue that a trial court “refused to hear” its defenses when, as in this case, no effort was made to prove those defenses. See Cooper, 838 S.W.2d at 747; Seisdata, 598 S.W.2d at 691-92; see also Heggy v. Am. Trading Employee Ret. Account Plan, 123 S.W.3d 770, 778 (Tex. App.--Houston [14th Dist.] 2003, pet. denied) (“an affirmative defense does not rebut the factual proposition of the plaintiffs' pleading, but instead, allows the defendant to introduce evidence to establish an independent reason why the plaintiff should not prevail”). Accordingly, the trial court did not err by entering judgment against appellant.

   

We overrule appellant's issue.

 

We affirm the trial court's judgment.

   

SOURCE: DALLAS COURT OF APPEALS - 05-10-01268-CV -  11/22/11

Elements of Quantum Meruit Claim

QUANTUM MERUIT CLAIM IN TEXAS 

Quantum meruit is an equitable theory of recovery based on an implied agreement to pay for benefits received and knowingly accepted. Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992); Tricon Tool & Supply, Inc. v. Thumann, 226 S.W.3d 494, 502 (Tex. App.—Houston [1st Dist.] 2006, pet. denied).

A party can recover in quantum meruit when non-payment for the services rendered would result in an unjust enrichment to the party benefited by the work. Speck v. First Evangelical Lutheran Church of Houston, 235 S.W.3d 811, 815 (Tex. App.—Houston [1st Dist.] 2007, no pet.). To recover in quantum meruit, the plaintiff must establish that: (1) valuable services and/or materials were furnished, (2) to the party sought to be charged, (3) which were accepted by the party sought to be charged, and (4) under such circumstances as reasonably notified the recipient that the plaintiff, in performing, expected to be paid by the recipient. Heldenfels Bros., 832 S.W.2d at 41 (citing Vortt Exploration Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990)). The plaintiff must also demonstrate that its efforts “were undertaken for the person sought to be charged; it is not enough to merely show that [its] efforts benefitted the defendant.” Hester v. Friedkin Cos., 132 S.W.3d 100, 106 (Tex. App.—Houston [14th Dist.] 2004, pet. denied) (emphasis in original).

SOURCE: Houston Court of Appeals - 01-10-00610-CV - 8/11/11

Sworn Account Pleading Requirements & How to Respond - TRCP 185 and 93(10)(verified denial)

  
SUIT ON SWORN ACCOUNT UNDER RULE 185

  
Pleading requirements for petition and answer - A general denial is insufficient to controvert a prima-facie case created by proper sworn account pleading, but the Plaintiff must comply with Rule 185 to take advantage of evidentiary benefits of the sworn account rule.  

  
Texas Rule of Civil Procedure 185 applies to “any claim for a liquidated money demand . . . [for] labor done or labor or materials furnished . . . .” Tex. R. Civ. P. 185. This rule is not a rule of substantive law; rather, “it is a rule of procedure regarding the evidence necessary to establish a prima facie right of recovery” on certain types of contractual account claims. See Rizk v. Fin. Guardian Ins. Agency, Inc., 584 S.W.2d 860, 862 (Tex. 1979); Smith v. CDI Rental Equipment, Ltd., 310 S.W.3d 559, 566 (Tex. App.—Tyler 2010, no pet.); Panditi v. Apostle, 180 S.W.3d 924, 926 (Tex. App.—Dallas 2006, no pet.).

Rule 185 provides that “when an action is founded on an open account on which a systematic record has been kept and is supported by an affidavit, the account shall be taken as prima facie evidence of the claim, unless the party resisting the claim files a written denial under oath.” Panditi, 180 S.W.3d at 926; see Tex. R. Civ. P. 185.

To establish a prima facie case in a suit on a sworn account, the plaintiff must strictly comply with the requirements of Rule 185. Nguyen v. Short, How, Frels & Heitz, P.C., 108 S.W.3d 558, 562 (Tex. App.—Dallas 2003, pet. denied).

The plaintiff’s petition “must contain a systematic itemized statement of the services rendered, reveal offsets made to the account, and be supported by an affidavit stating the claim is within the affiant’s knowledge and that it is ‘just and true.’” Id.; see also Panditi, 180 S.W.3d at 926 (stating requirements for sworn account petition and accompanying affidavit). If there is a deficiency in the plaintiff’s sworn account, the account will not constitute prima facie evidence of the debt. Panditi, 180 S.W.3d at 927; Nguyen, 108 S.W.3d at 562.

The defendant resisting the sworn account must also strictly comply with the requirements of Rule 185, “or he will not be permitted to dispute the receipt of the services or the correctness of the charges.” See Panditi, 180 S.W.3d at 927; see also Vance v. Holloway, 689 S.W.2d 403, 404 (Tex. 1985) (per curiam) (“Holloway failed to file a sworn denial and he has, therefore, waived his right to dispute the amount and ownership of the account.”).

Rule 185 requires the defendant to “comply with the rules of pleading” and “timely file a written denial, under oath,” or else the defendant “shall not be permitted to deny the claim, or any item therein.” Tex. R. Civ. P. 185; Panditi, 180 S.W.3d at 927 (noting that Rule 185 requires sworn denial to be written and verified by affidavit). To place the plaintiff’s sworn account claim at issue, the defendant must file a “special verified denial of the account” in accordance with Texas Rule of Civil Procedure 93. See Huddleston v. Case Power & Equip. Co., 748 S.W.2d 102, 103 (Tex. App.—Dallas 1988, no writ); see also Tex. R. Civ. P. 93(10) (“A pleading setting up any of the following matters, unless the truth of such matters appear of record, shall be verified by affidavit[:] A denial of an account which is the foundation of the plaintiff’s action . . . .”).

This sworn denial must be included in the defendant’s answer; a sworn denial in a response to a summary judgment motion does not satisfy Rule 185. See Cooper v. Scott Irrigation Constr., Inc., 838 S.W.2d 743, 746 (Tex. App.—El Paso 1992, no writ); see also Rush v. Montgomery Ward, 757 S.W.2d 521, 523 (Tex. App.—Houston [14th Dist.] 1988, writ denied) (“Only in the affidavit accompanying his response to Ward’s motion for summary judgment did appellant dispute the correctness and fairness of the charges, and demand additional proof of his liability. Because the combined effect of Texas Rule of Civil Procedure 185 and Texas Rule of Civil Procedure 93(10) required appellant to raise those claims in his answer, we hold that appellant raised his assertions too late.”).

If the defendant fails to file a verified denial to the sworn account, the sworn account is received as prima facie evidence of the debt, and the plaintiff, as summary judgment movant, is entitled to summary judgment on the pleadings. Nguyen, 108 S.W.3d at 562; see Livingston Ford Mercury, Inc. v. Haley, 997 S.W.2d 425, 430 (Tex. App.—Beaumont 1999, no pet.) (holding that when plaintiff files proper sworn account petition but defendant does not comply with Rule 185, the petition will support summary judgment and “additional proof of the accuracy of the account is unnecessary”).

“In other words, a defendant’s noncompliance with rule 185 conclusively establishes that there is no defense to the suit on the sworn account.” Nguyen, 108 S.W.3d at 562; see Whiteside v. Ford Motor Credit Corp., 220 S.W.3d 191, 194 (Tex. App.—Dallas 2007, no pet.) (“When the defendant fails to file a sworn denial and the trial court enters summary judgment on a sworn account, appellate review is limited because the defendant will not be allowed to dispute the plaintiff’s claim.”).

If, however, the plaintiff’s suit on a sworn account was not properly pleaded pursuant to Rule 185, the defendant is not required to file a sworn denial. Panditi, 180 S.W.3d at 927. In this circumstance, a general denial is sufficient to controvert the account. Tex. Dep’t of Corrs. v. Sisters of St. Francis of St. Jude Hosp., 753 S.W.2d 523, 524 (Tex. App.—Houston [1st Dist.] 1988, no writ).

SOURCE: Houston Court of Appeals - 01-10-00610-CV - 8/11/11

When can a Plaintiff recover in quantum meruit? When not?

When is quantum meruit available as a theory of recovery, when not?

EXPRESS CONTRACT VS. QUASI-CONTRACTUAL EQUITABLE THEORIES


Equitable theories are generally not available when the Plaintiff's claim involves contractual obligations, but there are exceptions to the express-contract preclusion of alternative non-contract theories. 

THE NATURE OF QUANTUM MERUIT AS A THEORY OF RECOVERY

Quantum meruit is an equitable and alternative theory of recovery intended to prevent unjust enrichment. See In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 740 (Tex. 2005). A cause of action for quantum meruit arises when a plaintiff establishes that it has provided a valuable service to the defendant, the defendant accepted the service, and the defendant had reasonable notice that the plaintiff expected to receive compensation. See Excess Underwriters at Lloyd’s v. Frank’s Casing Crew & Rental Tools, Inc., 246 S.W.3d 42, 49 (Tex. 2008). 
However, while a party may seek alternative relief under contract and quasi-contract theories, it generally cannot recover under quantum meruit when there is a valid contract covering the services or materials furnished and no exception applies. In re Kellogg Brown & Root, 166 S.W.3d at 740. 

THREE RECOGNIZED EXCEPTIONS TO PRECLUSION OF QM BY EXPRESS CONTRACT

The Texas Supreme Court has recognized only three exceptions to the general rule that an express contract bars recovery under quantum meruit: (1) “when a plaintiff has partially performed an express contract but, because of the defendant’s breach, the plaintiff is prevented from completing the contract”; (2) “when a plaintiff partially performs an express contract that is unilateral in nature”; and (3) in a construction contract, when a breaching plaintiff may recover the reasonable value of services less any damages suffered by the defendant if the defendant accepts and retains the benefits arising from the plaintiff’s partial performance. See Truly v. Austin, 744 S.W.2d 934, 936 (Tex. 1988).

SOURCE: Houston Court of Appeals - 01-10-00042-CV - 8/4/11

Sworn Account under TRCP 185 & Breach of Contract: Basic Requirements for each

How to recover on Sworn Account and for Breach of Contract:

There are differences. Rule 185 is limited to certain types of claims and imposes additional procedural requirements.

What is a sworn account? - Sworn Account Suit defined

A suit on a sworn account is “a procedural tool that limits the evidence necessary to establish a prima facie right to recover 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.); see Tex. R. Civ. P. 185.

Rule 185 Suit on Account requisites

To establish a claim under Rule 185 of the Rules of Civil Procedure, a plaintiff must allege that: it sold and performed services for the defendant; the claim is due; the charges were just and true; all lawful offsets, payments, and credits were applied; and the damages are liquidated. The plaintiff must also include in its petition a systematic record of the services provided, which shows with a reasonable degree of certainty the name, date, and charge for each item and provides details on how the total amount was determined. Meaders v. Biskamp, 316 S.W.2d 75, 78 (Tex. 1958); Hou–Tex Printers, Inc. v. Marbach, 862 S.W.2d 188, 190 (Tex. App.—Houston [14th Dist.] 1993, no writ).

Elements of Breach of Contract claim generally

To prevail on its breach of contract claim, [ Plaintiff ] must prove the essential elements of a breach of contract claim, which are: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of contract by the defendant; and (4) damages sustained as a result of the breach. Williams, 264 S.W.3d at 235–36 (citing Winchek v. Am. Express Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.—Houston [1st Dist.] 2007, no pet.)).

SOURCE: Houston Court of Appeals - 01-10-00042-CV - 8/4/11

Collection of a Promissory Note - Multiple Instruments pertaining to the obligationa

Collection of a Promissory Note: Essential elements the creditor must prove 

To collect on a promissory note, a plaintiff m ust establish: (1) that the note exists; (2) that the defendant signed the note; (3) that the plaintiff is the owner and holder of the note; and (4) that a certain balance is due and owing on the note. Cadle Co. v. Regency Homes, Inc., 21 S.W.3d 670, 674 (Tex. App.—Austin 2000, pet. denied); see also Clark v. Dedina, 658 S.W.2d 293, 295–96 (Tex. App.—Houston [1st Dist.] 1983, writ dism’d).

Business and Commerce Code Section 3.117

Business and commerce code section 3.117, titled “Other Agreements Affecting Instrument,” states in relevant part that

the obligation of a party to an instrument to pay the instrument may be modified, supplemented, or nullified by a separate agreement of the obligor and a person entitled to enforce the instrument, if the instrument is issued or the obligation is incurred in reliance on the agreement or as part of the same transaction giving rise to the agreement. To the extent an obligation is modified, supplemented, or nullified by an agreement under this section, the agreement is a defense to the obligation.

Tex. Bus. & Com. Code Ann. § 3.117 (West 2002). “The separate agreement might be a security agreement . . . that contradicts the terms of the instrument.” Id. § 3.117 cmt. 1 (West Supp. 2010)

Multiple instruments / documents can be given effect as if they were one

Additionally, where two or more instruments, executed contemporaneously or at different times, pertain to the same transaction, the instruments will be read together, even though they do not expressly refer to each other. Bd. of Ins. Comm’rs v. Great S. Life Ins. Co., 150 Tex. 258, 267, 239 S.W.2d 803, 809 (1951); see also Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex. 2000) (stating that it is “well-established law that instruments pertaining to the same transaction may be read together to ascertain the parties’ intent”).

SOURCE: Fort Worth Court of Appeals - 02-10-00296-CV - 8/4/11

Summary Judgment Based on Guaranty Agreement

ELEMENTS OF SUIT ON PERSONAL OR CORPORATE GUARANTY AGREEMENT

To obtain summary judgment on a guaranty agreement, a party must conclusively prove: (1) the existence and ownership of the guaranty contract, (2) the performance of the terms of the contract by plaintiff, (3) the occurrence of the condition on which liability is based, and (4) guarantor's failure or refusal to perform the promise. Barclay v. Waxahachie Bank & Trust Co., 568 S.W.2d 721, 723 (Tex.Civ.App.--Waco 1978, no writ).

SOURCE: Amarillo Court of Appeals - 07-10-0027-CV - 7/26/11


RELATED TERMS AND PHRASES: guaranteeing payment, signing loan documents for another, agreeing to be held liable for the debt of a loan applicant, borrower in the event of default

Credit card debt collection: Legal Theories of Recovery

Causes of action invoked by card issuers and their assignees to collect credit card debt in Texas courts: 

BREACH OF CONTRACT [breach of credit card agreement or default under terms of agreement] 

To prevail on its breach of contract cause of action, Citibank had to prove the following essential elements: (1) the existence of a valid contract, (2) performance or tendered performance by Citibank, (3) breach of the contract by Owusu, and (4) damages sustained as a result of the breach. See Winchek v. American Express Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.-Houston [1st Dist.] 2007, no pet.) (op. on reh'g).

ACCOUNT STATED THEORY OF RECOVERY [recently approved by several courts of appeals -- but  not all - as viable for debt collection by financial institutions without requiring them to produce the underlying cardmember agreement] 

A party is entitled to relief under the common law cause of action for account stated where (1) transactions between the parties give rise to indebtedness of one to the other; (2) an agreement, express or implied, between the parties fixes an amount due; and (3) the one to be charged makes a promise, express or implied, to pay the indebtedness. See Dulong v. Citibank (South Dakota), N.A., 261 S.W.3d 890, 893 (Tex. App.-Dallas 2008, no pet.). 

SOURCE: Dallas Court of Appeals - 05-10-00175-CV - 6/22/11

Money Had and Received (MHnR) Theory of Recovery for Debt

MONEY HAD AND RECEIVED

Alternative theory for a debt suit when there is no contract or no prove of it

   
To recover on a claim for money had and received, a plaintiff must show that the defendant holds money that in equity and good conscience belongs to him. Staats v. Miller, 243 S.W.2d 686, 687 (Tex. 1951); Edwards v. Mid-Continent Office Distribs., L.P., 252 S.W.3d 833, 837 (Tex. App.-Dallas 2008, pet. denied).

A cause of action for money had and received is not based on wrongdoing, but, instead, "looks only to the justice of the case and inquires whether the defendant has received money which rightfully belongs to another." Everett v. TK-Taito, L.L.C., 178 S.W.3d 844, 860 (Tex. App.-Fort Worth 2005, no pet.); Amoco Prod. Co. v. Smith, 946 S.W.2d 162, 164 (Tex. App.-El Paso 1997, no writ). In short, it is an equitable doctrine applied to prevent unjust enrichment. Hunt v. Baldwin, 68 S.W.3d 117, 132 (Tex. App.-Houston [14th Dist.] 2001, no pet.); Phippen v. Deere & Co., 965 S.W.2d 713, 725 (Tex. App.-Texarkana 1998, no pet.).

In defending against such a claim, a defendant may present any facts and raise any defenses that would deny the claimant's right or show that the claimant should not recover. Best Buy Co. v. Barrera, 248 S.W.3d 160, 162 (Tex. 2007).

SOURCE: Dallas Court of Appeals - 05-09-01397-CV- 4/22/11

MONEY-HAD-AND-RECEIVED CASELAW CLIP(S) AND CITES FROM OTHER COURTS OF APPEALS

"An action for money had and received is an equitable doctrine that courts apply to prevent unjust enrichment." London v. London, 192 S.W.3d 6, 13 (Tex. App.-Houston [14th Dist.] 2005, pet. denied) (citing Miller-Rogaska, Inc. v. Bank One, 931 S.W.2d 655, 662 (Tex. App.-Dallas 1996, no writ). "The cause of action is not premised on wrongdoing, but looks to the justice of the case and inquires whether the party has received money that rightfully belongs to another." Id. (citing Amoco Prod. Co. v. Smith, 946 S.W.2d 162, 164 (Tex. App.-El Paso 1997, no writ). The question in an action for money had and received is to which party does the money, in equity and law, belong. Id. (citing Staats v. Miller, 150 Tex. 581, 243 S.W.2d 686, 687 (1951); Tri-State Chems., Inc. v. W. Organics, Inc., 83 S.W.3d 189, 194-95 (Tex. App.-Amarillo 2002, pet. denied)).

ALTERNATIVE CAUSES OF ACTION ON DEBT: breach of contract, credit card agreement or promissory note; open account, account stated, sworn account under TRCP 185, common law debt claim, suit on account

DISTINGUISH FROM: civil cause of action for theft, misappropriation, and conversion 

What is a quasi-contract, implied-in-fact contract?

IMPLIED CONTRACT VS. EXPRESS CONTRACT

“A contract implied in law, or a quasi-contract, is distinguishable from a true contract because a quasi-contract is a legal fiction, an obligation imposed by law regardless of any actual agreement between the parties.” Fraud-Tech, Inc. v. Choicepoint, Inc., 102 S.W.3d 366, 386 (Tex. App.—Fort Worth 2003, pet. ref’d); see Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000).

SOURCE: Underwood Graves v. Logan (Tex.App.- Houston [1st Dist.] Jan. 28 2010)(no express contract or implied duty for creditor to promptly provide pay-off statement for real estate note found; breach of contract claim brought by maker after sale of real estate fell through accordingly fails)

Elements of Suit on (Sworn) Account (Tex. R. Civ. P. 185)

   
ELEMENTS OF SUIT ON ACCOUNT IN TEXAS

The elements of a cause of action on a sworn account are (1) a sale and delivery of the goods; (2) that the amount of the account is just, that is, that the prices are charged in accordance with an agreement or, in the absence of an agreement, they are the usual customary and reasonable prices for those goods; and (3) that the amount is unpaid. See Site Work Group, Inc. v. Chem. Lime Ltd., 171 S.W.3d 512, 513–14 (Tex. App.-Waco 2005, no pet.); PennWell Corp. v. Ken Assocs. Inc., 123 S.W.3d 756, 766 (Tex.App.-Houston [14th Dist.] 2003, pet. denied

ELEMENTS IN SUIT ON ACCOUNT CAN BE PROVEN IN SUMMARY JUDGMENT WHEN DEFENDANT FILES A SWORN DENIAL AND THUS CONTROVERTS PLAINTIFF'S PRIMA-FACIE CASE

 “A defendant’s verified denial of the correctness of a plaintiff’s sworn account, in the form required by Rule 185, destroys the evidentiary effect of the itemized account and forces the plaintiff to put on proof of its claim.” Site Work Group, Inc. v. Chem. Lime Ltd., 171 S.W.3d 512, 513 (Tex. App.—Waco 2005, no pet.) (citing Rizk v. Fin. Guardian Ins. Agency, Inc., 584 S.W.2d 860, 862 (Tex. 1979)). However, even when a defendant verifies its sworn denial to a suit on a sworn account, a plaintiff may properly obtain a summary judgment on its sworn account claim by filing “legal and competent summary judgment evidence establishing the validity of its claim as a matter of law.” PennWell Corp. v. Ken Assocs., Inc., 123 S.W.3d 756, 765 (Tex. App.—Houston [14th Dist.] 2003, pet. denied) (citing United Bus. Machs. v. Entm’t Mktg., Inc., 792 S.W.2d 262, 264 (Tex. App.—Houston [1st Dist.] 1990, no writ)).

 SOURCE: 01-08-00890-CV (Houston Court of Appeals - 1st District) (11/5/09)

Rule 185 of the Texas Rules of Civil Procedure