Volcanic Gardens Management Company, Inc. v. El Paso Electric Company, No. 08-03-00208-CV (TX 7/29/2004)
| Decision Date | 29 July 2004 |
| Docket Number | No. 08-03-00208-CV,08-03-00208-CV |
| Parties | VOLCANIC GARDENS MANAGEMENT COMPANY, INC., d/b/a WET `N' WILD WATER WORLD, Appellant, v. EL PASO ELECTRIC COMPANY, Appellee. |
| Court | Texas Supreme Court |
Appeal from the County Court at Law #3 of El Paso County, Texas, (TC# 2003-1597).
Before Panel No. 3 BARAJAS, C.J., LARSEN, and CHEW, JJ.
Appellant Volcanic Gardens Management Company, Inc. d/b/a Wet `N' Wild Water World ("Wet `N' Wild") appearing pro se appeals from two partial summary judgments granted in favor of Appellee El Paso Electric Company ("EPEC"), which became final when severed from trial cause number 2000-2390. On appeal, Wet `N' Wild raises two issues, each with several sub-issues, in which it contends the trial court erred in granting the summary judgments because as a matter of law and of fact EPEC's 5 percent late payment charge paid by Wet `N' Wild and other EPEC customers is illegal and is a usurious interest contrary to Texas usury law. We affirm.
Wet `N' Wild is an amusement park in Anthony, Texas and its electricity needs are provided by EPEC, an electric utility company serving El Paso County, Texas. In July 2000, Wet `N' Wild filed suit against EPEC. In its original petition, Wet `N' Wild alleged over billing due to improper classification and other overcharges.1 In its seventh amended petition, Wet `N' Wild pleaded a usury claim, alleging that an arbitrary 5 percent late payment penalty on EPEC's billing invoices to Wet `N' Wild and others was actually interest in excess of the lawful rate permitted under Texas law and that the Public Utility Commission rule permitting the charge is not valid because it is contrary to usury law and outside the Public Utility Commission's scope of authority. On December 16, 2002, EPEC filed its first motion for partial summary judgment with respect to the pleaded usury claim in Wet `N' Wild's seventh amended petition2. In its first motion, EPEC asserted two grounds for summary judgment on the usury claim: (1) the 5 percent late payment penalty is not usurious as a matter of law because it is not "interest" subject to the statute; and alternatively, (2) the 5 percent late payment penalty is not usurious as a matter of law because the Public Utility Commission, acting within the authority granted by the Legislature, specifically authorized the penalty in both the Texas Administrative Code and the El Paso Electric Company Tariff.
While EPEC's first motion was pending,3 Wet `N' Wild filed an eighth amended petition on December 26, 2002, in which it alleged that the 5 percent late payment penalty was illegal independent of usury law because: (1) the Public Utility Commission had no statutory authority to issue such an arbitrary and discriminatory regulation; (2) the Public Utility Commission had no power to delegate the decision-making function as to an arbitrary 5 percent "may be charged" regulation to EPEC; and (3) the EPEC had no power to compose its own standards for imposing or not imposing a 5 percent penalty, which applied the charge in an arbitrary and discriminatory manner.4 On February 11, 2003, EPEC filed its second motion for partial summary judgment, asserting that the 5 percent late payment penalty is "fully authorized by the Texas Public Utility Commission acting within its legislatively granted authority to set electric utility rates and therefore cannot be `illegal' as a matter of law."5 Wet `N' Wild amended its petition on March 3, 2003 and pleaded additional facts in support of its illegality claim. On March 27, 2003, the trial court granted EPEC's first motion for partial summary judgment, and it granted EPEC's second motion for partial summary judgment on April 10, 2003. On April 17, 2003, the trial court granted Wet `N' Wild's amended motion to sever the illegal and usury claims upon which partial summary judgment had been granted to EPEC and assigned a different cause number. After a hearing, the trial court denied Wet `N' Wild's motion for new trial and supplemented motion for new trial under the severed cause number 2003-1597. Wet `N' Wild now appeals both partial summary judgments in this cause.
The function of summary judgment is not to deprive a litigant of the right to a full hearing on the merits of any real issue of fact, but rather to eliminate patently unmeritorious claims and untenable defenses. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 n.5 (Tex. 1979), citing Gulbenkian v. Penn, 151 Tex. 412, 416, 252 S.W.2d 929, 931 (1952). A party moving for a traditional summary judgment has the burden of showing there is genuine issue of material fact and that it is entitled to judgment as a matter of law. Nixon v. Mr. Property Management Co., Inc., 690 S.W.2d 546, 548-49 (Tex. 1985); Duran v. Furr's Supermarkets, Inc., 921 S.W.2d 778, 784 (Tex.App.-El Paso 1996, writ denied); see TEX.R.CIV.P. 166a(c). When a defendant moves for summary judgment, it has the burden to conclusively negate at least one essential element of the plaintiff's cause of action or conclusively establish each element of an affirmative defense. See American Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). In deciding whether there is a disputed material fact issue precluding summary judgment, all evidence favorable to the non-movant must be taken as true and all reasonable inferences, including any doubts, must be resolved in the non-movant's favor. Nixon, 690 S.W.2d at 548-49; Duran, 921 S.W.2d at 784. If the movant establishes its right to a summary judgment as a matter of law, the burden then shifts to the non-movant to present evidence creating any genuine issues of material fact that would preclude summary judgment. See Casso v. Brand, 776 S.W.2d 551, 556 (Tex. 1989); City of Houston, 589 S.W.2d at 678-79. If the trial court's order granting summary judgment does not state the specific ground or grounds for its ruling, summary judgment will be affirmed on appeal if any of the theories advanced are meritorious. See State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex. 1993); Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989).
In Issue Two, Wet `N' Wild argues the trial court erred in granting EPEC's first partial summary judgment motion because the 5 percent late payment charge was a usurious interest. Specifically, Wet `N' Wild asserts inter alia the penalty charge violated the Texas Finance Code because on its face it constitutes "interest" which exceeds the maximum rate allowed under the statute. The Public Utility Commission Substantive Rule at issue in this cause, Section 25.28(b)6 in the Texas Administrative Code, provides:
(b) Penalty on delinquent bills for retail service. A one-time penalty not to exceed 5.0 % may be charged on a delinquent commercial or industrial bill. The 5.0 % penalty on delinquent bills may not be applied to any balance to which the penalty has already been applied. An electric utility providing any service to the state of Texas shall not assess a fee, penalty, interest, or other charge to the state for delinquent payment of a bill.
16 Tex.Admin.Code § 25.28(b)(2000)(Pub. Util. Comm'n, Bill Payment and Adjustments).
In its first motion for partial summary judgment, EPEC argued the 5 percent late payment penalty was not usurious as a matter of law because it is not "interest" subject to the usury statute. On appeal, Wet `N' Wild argues the 5 percent late charge was made for the detention of money owed past the due date stated on the electric bill and constituted usurious interest at 5 percent for one month equaling 60 percent per year, which is in excess of the maximum rate of interest of 10 percent a year allowed by law. See TEX.FIN.CODE ANN. § 302.001(b)(Vernon Supp. 2004).
The essential elements of a usurious transaction are: (1) a loan of money; (2) an absolute obligation to repay the principal; and (3) the exaction of a greater compensation than allowed by law for the use of the money by the borrower. First Bank v. Tony's Tortilla Factory, Inc., 877 S.W.2d 285, 287 (Tex. 1994); Holley v. Watts, 629 S.W.2d 694, 696 (Tex. 1982). Under Section 301.002(a)(4) of the Texas Finance Code,"interest" means "compensation for the use, forbearance, or detention of money." TEX.FIN.CODE ANN. § 301.002(a)(4)(Vernon Supp. 2004). "Usurious interest" is defined as "interest that exceeds the applicable maximum amount allowed by law." TEX.FIN.CODE ANN. § 301.002(a)(17)(Vernon Supp. 2004).
For the usury laws to apply, there must be an overcharge by a lender for the use, forbearance, or detention of the lender's money. Stedman v. Georgetown Savings & Loan Ass'n, 595 S.W.2d 486, 489 (Tex. 1979); Domizio v. Progressive County Mut. Ins. Co., 54 S.W.3d 867, 873 (Tex.App.-Austin 2001, pet. denied). The "detention" of money under the usury statute arises when a debt has become due and the debtor has withheld payment without a new contract giving him the right to do so. Domizio, 54 S.W.3d at 873; Tygrett v. University Gardens Homeowners' Ass'n, 687 S.W.2d 481, 483 (Tex.App.-Dallas 1985, writ ref'd n.r.e.), citing Parks v. Lubbock, 92 Tex. 635, 637, 51 S.W. 322, 323 (1899). Because usury must be founded on an overcharge by a lender for the use, forbearance or detention of the lender's money, the definition of "detention" necessarily requires a lending transaction between the parties. Tygrett, 687 S.W.2d at 483; see also Parks, 92 Tex. at 638, 51 S.W. at 323 (). Whether an amount of money is interest does not depend on what the...
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