Amegy Bank National Association v. Southern Crushed Concrete, Inc., No. 01-07-00359-CV (Tex. App. 4/9/2009)
| Decision Date | 09 April 2009 |
| Docket Number | No. 01-07-00359-CV.,01-07-00359-CV. |
| Parties | AMEGY BANK NATIONAL ASSOCIATION F/K/A SOUTHWEST BANK OF TEXAS, N.A., Appellant, v. SOUTHERN CRUSHED CONCRETE, INC., Appellee. |
| Court | Texas Court of Appeals |
On Appeal from the 80th District Court, Harris County, Texas, Trial Court Cause No. 2003-23215A.
Panel consists of Chief Justice RADACK and Justices JENNINGS and BLAND.
This is an appeal from a postjudgment garnishment proceeding resolved by cross-motions for traditional summary judgment. Appellant, Amegy Bank, N.A., f/k/a Southwest Bank of Texas, N.A. (Amegy), garnishee, challenges the summary judgment rendered in favor of the garnishor, appellee, Southern Crushed Concrete, Inc. (Southern), for $99,805.03, plus interest and costs. Amegy presents two sets of issues. In the first set of four issues, Amegy argues that it was entitled to exercise its right of setoff, despite having been served with Southern's writ of garnishment. The second set of three issues challenges the damages awarded to Southern, evidentiary rulings, and the trial court's refusal to render summary judgment in favor of Amegy. We affirm.
Southern sued Republic Concrete, LP (Republic) and Needham Road, LLC (Needham Road) in an underlying case resolved by those parties by an agreed judgment in October 2003. Pursuant to the agreed judgment, Southern recovered $192,131.38 from both judgment debtors, Republic and Needham Road, jointly and severally.1
On December 11, 2003, Southern filed an application for a writ of garnishment against Amegy, supported by the affidavit of Southern's credit manager. Southern asserted that Amegy either had property of, or was indebted to, Republic, which had no property within Texas that was subject to execution and sufficient to satisfy the $192,131.38 judgment. See Tex. R. Civ. P. 661 (form of writ). Southern's application specified that Republic had "at least one account" with Amegy and provided the number of that account.
Southern later learned that Republic had several financial agreements with Amegy. These included at least one standard banking account owned by Republic and four promissory notes secured by certificates of title to Republic's trucks, machinery, and equipment. Amegy's business transactions with Republic also included a factoring agreement established in early 2002. This agreement constituted an "account-purchase transaction" by which Amegy advanced funds to Republic in exchange for some, but not all, of Republic's accounts receivable at a discount.2 Payments on factored accounts were made directly to Amegy, which returned a percentage credit to Republic, as provided by the agreement. Amegy tracked transactions subject to the factoring agreement through several reports, including a "reserve account report," which "account[ed] for the balance owing to and from [Republic] as derived from all debts and credits made in connection with the [factoring] agreement." It is undisputed that the reserve account balance included both net proceeds from factored invoices and gross proceeds from invoices that were not subject to the factoring agreement, and that Republic's customers made payments for both types of invoices to a lock box maintained by Amegy.
Amegy referred to the "reserve balance" as the amount held in the "Reserve Fund" that Amegy owed Republic on any given day. As with all of its factored accounts, Amegy carried this credit on its balance sheet as a liability. On December 24, 2003, the reserve fund balance in Republic's favor was $24,497.66. On January 20, 2004, the reserve fund balance was $99,805.03.
The trial court issued the writ of garnishment against Amegy on December 22, 2003. The writ referred to the judgment in the underlying case and "COMMANDED" Amegy, as garnishee, to file a sworn, written answer by a specific answer date and to state in that answer, [1] "what, if anything, you are indebted to [Republic] and were, when this Writ was served" and [2] what "effects if any, of [Republic] you had in your possession, and had when this writ was served." The writ further specified, "YOU ARE FURTHER COMMANDED not to pay [Republic] or to deliver to [Republic] any effects pending further order of this court." (Italicized emphasis added).3
Service on Amegy on December 24, 2003 made Amegy's answer due by January 20, 2004. See id. Amegy filed a verified original answer on January 6, 20044 and an amended verified answer 14 days later, on January 20, 2004. The amended answer recites the following as to Republic:
1. Amegy was indebted to Republic on the date of service, December 24, 2003, in the amount of $101,804.51;5
2. Amegy was not indebted to Republic on the answer date, January 20, 2004 because
3. Amegy had a priority security interest and lien that controlled over any claim that Southern might assert, and
4. At the time of service, Republic's indebtedness to Amegy exceeded Republic's funds on deposit;
5. Accordingly Amegy exercised its right of setoff;
6. Amegy had no "effects" of Republic in Amegy's possession on either the date of service or the answer date, and no "effects" of Republic had come into Amegy's possession between those dates.
In addition to asserting several affirmative defenses, Amegy sought to be discharged from any liability to Southern and to recover attorney's fees and costs.
Southern filed its "traverse," or challenge, to Amegy's answer, along with a controverting affidavit and counterclaims that challenged the statements in Amegy's answer. See Tex. R. Civ. P. 673. Southern later amended its challenge after discovering the factoring-agreement account between Republic and Amegy. Among several contentions, Southern emphasized that Amegy had violated specific requirements of the writ, including not respecting the resulting freeze of assets and funds subject to the writ. Southern also disputed the amount of Republic debt claimed by Amegy and whether Republic was in default. Finally, Southern specifically challenged the $ 101,804.51 stated in Amegy's answer as due and owing to Republic on December 24, 2003, the date of service. Southern challenged that amount on the grounds that it did not include funds due to Republic under the factoring agreement. Amegy had preserved these funds in its records as the Reserve Account Balance, or the "net proceeds" due to Republic after applying all debits and credits under the factoring agreement.
Amegy's response relied on default, acceleration, and setoff provisions of its accounts with Republic.
Amegy and Southern proceeded at that point by cross-motions for traditional summary judgment. See Tex. R. Civ. P. 166a(c). After a series of responses, replies, and rejoinders, the trial court initially denied relief. The parties then filed a joint motion urging the trial court to render judgment as a matter of law, on the grounds that, "there are no fact issues requiring resolution by the Court," and that "resolution of the case depends only upon the Court's application of the appropriate law" to the facts of the case. The summary judgment rendered in Southern's favor on March 2, 2007, awarded Southern $ 99,805.03, which was the amount in the reserve account on January 20, 2004, when Amegy's answer was due.6
We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). Like the trial court, we must indulge every reasonable inference in favor of the nonmovant, take all evidence favorable to the nonmovant as true, and resolve any doubts in favor of the nonmovant. Id. We review the evidence presented by the summary judgment record in the light most favorable to the party against whom the summary judgment was rendered, crediting evidence favorable to that party if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. See City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). A party who moves for traditional summary judgment based on rule 166a(c), as here, must establish that no genuine issue of material fact exists and that judgment should be rendered in favor of the movant as a matter of law. Tex. R. Civ. P. 166a(c); KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999).
When, as here, both parties file motions for summary judgment, and the trial court grants one motion and denies the other, we determine all presented questions and may render a different judgment if appropriate. SAS Institute, Inc., 167 S.W.3d at 841; CU Lloyd's v. Feldman, 977 S.W.2d 568, 569 (Tex. 1998); Bank One, N.A. v. Wohlfahrt, 193 S.W.3d 190, 193 (Tex. App.-Houston [1st Dist.] 2006, no pet.); Rowley, 976 S.W.2d at 718. Also as here, when a summary judgment does not specify the grounds on which it was granted, the appealing party must demonstrate on appeal that none of the movant's proposed grounds is sufficient to support the judgment. Star Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995). Conversely, we will affirm the judgment if any one of the theories advanced in the motion is meritorious. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 157 (Tex. 2004).
In its first four issues, Amegy argues that summary judgment should have been rendered in its favor because Amegy complied fully with its duties under the writ of garnishment issued by the trial court. Specifically, Amegy contends that it lawfully exercised its right of setoff under its accounts with Republic, that the writ did not reach any assets encompassed by Amegy's factoring relationship with Republic, that Republic's "contingent" interests in assets were not captured by the writ, and that any assets of Republic that came...
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