Tempay, Inc. v. Tanintco, Inc.
| Decision Date | 15 January 2016 |
| Docket Number | No. 05-15-00130-CV,05-15-00130-CV |
| Parties | TEMPAY, INC., Appellant v. TANINTCO, INC., Appellee |
| Court | Texas Court of Appeals |
On Appeal from the 416th Judicial District Court Collin County, Texas
Before Justices Francis, Evans, and Stoddart
Opinion by Justice Evans
This is a dispute between a factoring company1 and an account debtor. For the reasons explained below, we conclude there is a genuine issue of material fact whether the factoring company's notice of assignment met the requirements of section 9.406 of the business and commerce code. See TEX. BUS. & COM. CODE ANN. § 9.406 (West Supp. 2015). We also conclude there is a genuine issue of material fact whether the assignment was in effect during the relevant time period. Consequently, we reverse the trial court's summary judgment for the account debtor and remand the cause.
Appellant TemPay, Inc. is a factoring company. Under a 2011 agreement, TemPay provided payroll funding and factoring services to A-1 Source Group, Inc., a corporation that supplied temporary employees and contractors to its customers. Appellee Tanintco, Inc. was a customer of A-1 Source Group.
On March 11, 2011, TemPay sent the following notice letter to "Tangent" ("2011 notice letter"):
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The 2011 notice letter instructs "Tangent" to make payment to "A-1 Source Group, LLC" by mail to the specified address or by "ACH Payment" to the specified bank account. The 2011 notice letter contains four errors. First, the letter is directed to "Tangent," not Tanintco, the account debtor. Second, the letter is directed to the "Accounts Payable Manager," and Tanintco does not have an employee with that title. Third, the letter instructs the account debtor to pay "A-1 Source Group, LLC," not TemPay. Fourth, it names A-1 Source Group, "LLC" as the assignor, when the correct corporate name, and the name on the UCC-1 financing statement provided to Tanintco, is A-1 Source Group, "Inc." Apart from these errors, the 2011 notice letter in its first paragraph instructs that A-1 Source Group has made the assignment "until further notice," without specifying any form of notice; and a later paragraph instructs that the letter "may only be revoked in writing by officers of both TemPay, Inc. and A-1 Source Group, L.L.C."
Robert Challis, Tanintco's operations manager, received the 2011 notice letter. On March 14, 2011, Renetta Jones, the president of A-1 Source Group, sent an email to Challis forwarding "A-1 Source Group/TemPay-Wire Instructions" and explaining "Hey Rob this is who is taking over for me see below." Two days later, Brian Keuper of TemPay sent an email to Challis regarding "A-1 Source Group Invoice #126-13545 dated 3/9/11 $5,460.00 (TANGENT)." Keuper stated that he had attached the specified invoice, and asked Challis to "see the attached UCC Notification Letter illustrating TemPay's funding relationship with A-1 Source Group, LLC." He also requested Keuper to "confirm via e-mail that your corporate office [in] the U.K. has changed remittance instructions to those I have attached and recently e-mailed to you." Between March 16 and March 24, 2011, Keuper and Challis exchanged emails regarding A-1 Source Group invoices and payment to TemPay. Each of Challis's emails identified him as "Operations Manager, Tanintco/Tangent." Challis requested revisions to theform of the invoices as well as additional information to enable Tanintco to process the invoices for payment. On March 23, 2011, Keuper wrote Challis:
You seem to be having issues with a supplier name change. I will need these issues resolved prior to funding additional hours for A-1 Source Group. TemPay has just entered into a payroll funding relationship with A-1 Source Group but there seems to be additional red tape that needs to be resolved first with billing issues and payments being processed for these invoices. . . . Please help me resolve this issue so we may continue funding A-1 Source Group with contractors placed at Tantico [sic]/Tangent. Please let me know what we can do to have invoicing done so there is a seamless transition to payment being processed in a timely manner.
Challis responded with "[a]pologies for the confusion," and assured Keuper that he would "now be making sure things run smoothly." He concluded: Keuper responded with three revised invoices to be processed for payment. The record does not include any further correspondence between TemPay and Tanintco in 2011.
For a year, Tanintco made payment on its account by wire transfer in accordance with the 2011 notice letter. But in "early 2012," Jones "notified Tanintco to begin paying A-1 Source Group, Inc. directly, no longer through TemPay," according to Challis's summary judgment affidavit. For the next year, Tanintco paid its invoices as instructed by Jones. At all times, Tanintco paid in full for the services rendered to it by A-1 Source Group, Inc. Tanintco heard nothing from TemPay for another year during which Tanintco paid A-1 Source Group, Inc. at least $597,386.95.
On February 8, 2013, TemPay sent a second notice letter to "Tanintco/Tangent," ("2013 notice letter") this time instructing that "payment is to be made payable to TemPay, Inc." under an agreement between "A-1 Source Group" and TemPay. But because TemPay's suit does notseek to recover from Tanintco any debts allegedly incurred after February 8, 2013,2 the adequacy of the 2013 notice letter is not at issue. In late February 2013, Kenneth Wood of TemPay and Dan Pike of Tanintco exchanged emails about amounts TemPay alleged were due from Tanintco. Wood sent Pike a "statement of account" showing a total of $597,386.95 due from Tanintco for invoices dated October 4, 2012, through February 15, 2013. Because Tanintco had already paid A-1 Source Group for these invoices, it did not pay TemPay.
On April 19, 2013, TemPay filed suit against A-1 Source Group Inc. and Jones seeking injunctive relief. TemPay alleged that Jones "devised . . . a scheme to convert the accounts receivable due to [TemPay] for her own use and benefit by directing the customers to pay [A-1 Source Group] directly." TemPay further alleged that thirty days after A-1 Source Group and TemPay entered into the factoring agreement, "Jones was indicted on charges of conspiracy to commit money laundering in the United States District Court for the Eastern District of Texas." TemPay alleged that on January 30, 2013, Jones "entered a guilty plea on the charge of money laundering and was sentenced to serve eighteen (18) months in the federal penitentiary located in Fort Worth, Texas." TemPay further alleged that although it was unaware that Jones "was in any type of criminal trouble" when the factoring agreement was executed, Keuper learned of Jones's indictment in February 2012. Nevertheless, with reassurances from Jones and her attorney, and because the A-1 Source Group account was current, TemPay "decided to continue doing business with [A-1 Source Group and Jones] and monitor the account closely." TemPay alleged it was "shocked to learn in and around February 2013 that [Jones] pled guilty to said charges." There is nothing in the record showing that TemPay shared any information with Tanintco about Jones's indictment or that Tanintco had any knowledge of it.
On September 26, 2013, TemPay filed its first amended original petition adding Tanintco as a defendant, alleging "wrongful payment" by Tanintco to A-1 Source Group. TemPay then moved for summary judgment against A-1 Source Group, Jones, and Tanintco. Against Tanintco, TemPay alleged that because the assignment was effective as a matter of law, Tanintco was liable for all payments it made on the account to A-1 Source Group.
Tanintco filed a cross-motion for summary judgment against TemPay. Tanintco sought summary judgment on grounds that (1) TemPay's notice of assignment was ineffective as a matter of law, and (2) in the alternative, the assignment was not in effect during the period for which TemPay sought damages.
The trial court granted TemPay's motion on its claims against A-1 Source Group and Jones, and rendered judgment for TemPay against those parties in the principal sum of $526,333.53, plus attorney's fees, interest, and costs. This portion of the trial court's judgment is not challenged in this appeal.
The trial court denied TemPay's motion for summary judgment on its claims against Tanintco, granted Tanintco's cross-motion for summary judgment, and rendered a take-nothing judgment on TemPay's claims against Tanintco. On appeal, TemPay seeks reversal of the trial court's order granting Tanintco's motion and remand to the trial court for further proceedings.3
We review a trial court's summary judgment de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). The summary judgment movant "has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law." Nixon v. Mr. Property Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). In deciding whether thereis a disputed fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true, and "every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its favor." Id. at 558-59; see also Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222-23 (Tex. 1999) ().
When, as here, the trial court does not specify the basis for its summary judgment, we affirm the...
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