American Express National Bank v. Christopher Sherwood A/K/A Christopher J. Sherwood A/K/A Chris Sherwood ( 2022 )

Affirmed and Opinion Filed January 27, 2022
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-20-00153-CV
AMERICAN EXPRESS NATIONAL BANK, Appellant
V.
CHRISTOPHER SHERWOOD A/K/A CHRISTOPHER J. SHERWOOD
A/K/A CHRIS SHERWOOD, Appellee
On Appeal from the 101st Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-18-14540
MEMORANDUM OPINION
Before Justices Osborne, Reichek, and Carlyle
Opinion by Justice Osborne
American Express National Bank (“Bank”) filed suit against Christopher
Sherwood to collect amounts it alleged were due on two credit card accounts. After
a bench trial, the trial court rendered judgment that the Bank take nothing from
Sherwood. The trial court also made findings of fact and conclusions of law that the
Bank lacked standing to recover on its claims. Because the Bank did not conclusively
prove its right to recover on the accounts, we affirm the trial court’s judgment.
BACKGROUND
The Bank sued Sherwood for breach of contract on two credit cards, an
American Express EveryDay card with a balance of $17,613.25 (“the EveryDay
card”), and an American Express Hilton Honors card with a balance of $9,190.22
(“the Hilton Honors card”). Sherwood filed a verified denial that the Bank owned
the accounts. The case proceeded to trial before the court.
William McCarter, the Bank’s assistant custodian of records, testified that
Sherwood applied for and was approved for a credit card account from “American
Express” with an account number ending in 62009. Exhibit 1A, a card member
agreement dated October 14, 2015, was admitted into evidence showing “American
Express Centurion Bank” as the issuer and “Christophe Sherwood” as the card
member for an Amex EveryDay card.
Exhibit 1A reflected an account number ending in 61001, not 62009.
McCarter explained that the account number on the EveryDay account changed from
61001 to 62009 on July 7, 2017. He attributed this change to a change in the card
number, and testified that the card number could have changed “[f]or various
different reasons; lost, stolen, the card member could request a new card.” On cross-
examination, McCarter testified that despite the different account numbers, the
accounts were the same “[d]ue to all the other information, the card member’s name,
the card member’s address that are listed on all the statements, whether it says 61001
or the 62009.” He conceded that there was no documentation in the file showing the
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reason for the change, but testified he is “[o]ne hundred percent” confident that “this
is the same card.”
The Bank offered monthly statements beginning in February 2016 and ending
in May 2017 for the EveryDay account number ending in 61001, and monthly
statements beginning in June 2017 and ending in October 2018 for the EveryDay
account number ending in 62009. These statements were admitted into evidence as
Exhibit 2A. The February 9, 2018 statement includes a note that “American Express
Centurion Bank (“AECB”) will undergo a legal entity change and be known as
American Express National Bank (“AENB”) as of April 1, 2018. Following that
date, AENB will become the issuer of your Account.” The October 12, 2018
statement shows a balance due of $17,613.25 on the account number ending in
62009, and McCarter testified that this amount was the balance due on the EveryDay
card.
The Bank also offered Exhibit 1B, a card member agreement dated December
28, 2017 showing “Christophe Sherwood” as the card member on a Hilton Honors
card issued by “American Express Bank, FSB” with an account number ending in
71001. McCarter explained that the account “originated with Citibank,” but
“American Express took over the Citibank Hilton portfolio.” The Bank did not offer
any documentation of the transfer or assignment. McCarter testified there was a
balance due in 2016 when the account was transferred from Citibank to American
Express, but all of the statements for 2017 were missing. The February 19, 2018
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statement included a note that “American Express Bank, FSB (“FSB”) will undergo
a legal entity change and be known as American Express National Bank (“AENB”)
as of April 1, 2018. Following that date, AENB will become the issuer of your
Account.” Based on monthly statements from February through October 2018 that
were admitted into evidence as Exhibit 2B, McCarter testified that $9,190.22 was
due on the Hilton Honors card.
The Bank then called Sherwood as an adverse witness. He testified that he had
one American Express card and that “[t]he Citi Hilton became Amex.” He denied
familiarity with Exhibits 1A and 1B, but admitted that his name and his previous
address were on some of the Bank’s documents. He testified he used the EveryDay
card in the past and did not pay the balance in full. He also testified that he had two
Citibank credit cards, one of which “transferred to American Express,” but he did
not “remember when or being told about it.” He did not recall “ever calling American
Express or indicating to them that [his] card was lost or stolen.” He was not asked,
and did not testify, about specific amounts due on either card.
The Bank concluded its case by requesting a judgment of $26,803.64, the total
amount it contended was due on the cards.
The trial court made findings of fact and conclusions of law. Among its
findings were that the Bank “lacked proof that it owned the account upon which the
charges were made,” and “Hilton Honors account statements were admitted into
evidence but with no assignment to [the Bank].” The trial court concluded that the
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Bank “lacks standing as it failed to show that it owned the original claim on the date
of the filing of this lawsuit.”
The trial court rendered judgment that the Bank take nothing from Sherwood.
This appeal followed.
ISSUE AND STANDARD OF REVIEW
In one issue, the Bank challenges the legal and factual sufficiency of the
evidence to support the trial court’s judgment. We review findings of fact entered in
a bench trial for legal and factual sufficiency of the evidence by the same standards
used to review jury findings. Smith-Gilbard v. Perry, 332 S.W.3d 709, 713 (Tex.
App.—Dallas 2011, no pet.). Because the Bank bore the burden of proof at trial and
the trial court rendered judgment for Sherwood, on appeal the Bank must
conclusively prove its right to judgment:
When a party attacks the legal sufficiency of an adverse finding on an
issue on which she has the burden of proof, she must demonstrate on
appeal that the evidence establishes, as a matter of law, all vital facts in
support of the issue. In reviewing a “matter of law” challenge, the
reviewing court must first examine the record for evidence that supports
the finding, while ignoring all evidence to the contrary. If there is no
evidence to support the finding, the reviewing court will then examine
the entire record to determine if the contrary proposition is established
as a matter of law. The point of error should be sustained only if the
contrary proposition is conclusively established. . . .
When a party attacks the factual sufficiency of an adverse finding on
an issue on which she has the burden of proof, she must demonstrate on
appeal that the adverse finding is against the great weight and
preponderance of the evidence. The court of appeals must consider and
weigh all of the evidence, and can set aside a verdict only if the
evidence is so weak or if the finding is so against the great weight and
preponderance of the evidence that it is clearly wrong and unjust.
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Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241–42 (Tex. 2001) (per curiam)
(citations omitted). In a bench trial, the trial court is the sole judge of the credibility
of the witnesses and the weight to be given their testimony. Anderton v. Green, 555
S.W.3d 361, 371 (Tex. App.—Dallas 2018, no pet.).
DISCUSSION
The Bank contends it conclusively proved its ownership of the accounts1 and
the amounts due. We consider the Bank’s arguments for each account.
1. The Hilton Honors card
The Bank sought to prove that “American Express” became the issuer of
Sherwood’s Hilton Honors card although the account originated at Citibank.
McCarter testified that “American Express took over the Citibank Hilton portfolio”
and the accounts were assigned to American Express. The Bank argues Sherwood
conceded that American Express acquired his Hilton Honors account from Citibank
when he testified that “The Citi Hilton became Amex.”
The Bank contends it also notified Sherwood of the subsequent “legal entity
change” from “American Express Bank, FSB” to “American Express National
1
We note at the outset that both the trial court and the parties referred to the dispositive issue as the
Bank’s “standing” to sue Sherwood. But the question here “is not truly a standing issue because it does not
affect the jurisdiction of the court.” See John C. Flood of DC, Inc. v. SuperMedia, L.L.C., 408 S.W.3d 645,
651 (Tex. App.—Dallas 2013, pet. denied). Instead, Sherwood specifically denies that the Bank owns the
claims or is a party to any agreement with him. This is a question of the Bank’s capacity. See id. “A plaintiff
has standing when it is personally aggrieved, regardless of whether it is acting with legal authority; a party
has capacity when it has the legal authority to act, regardless of whether it has a justiciable interest in the
controversy.” Pike v. Tex. EMC Mgmt., LLC, 610 S.W.3d 763, 775 (Tex. 2020) (internal quotations
omitted).
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Bank” (the plaintiff and appellant here) on the February 2018 Hilton Honors card
statement, thus establishing its ownership of the account. The Bank cites Sherwood’s
use of the card and payments on the account after he had notice of the assignment as
conclusive proof of the Bank’s ownership.
The Bank concedes it did not introduce any written assignment instrument
into evidence. The Bank argues, however, that McCarter’s testimony was sufficient
to establish the Bank’s ownership of the account. The Bank contends that ownership
of a credit card account can be established conclusively by testimony alone, citing
among other authority Ranjbar v. Citibank, N.A., No. 07-14-00275-CV, 2016 WL
303832 (Tex. App.—Amarillo Jan. 25, 2016, no pet.) (mem. op.).2 In Ranjbar,
however, the trial court’s judgment was for the bank, and the court of appeals was
required to imply all necessary findings and conclusions in support of that judgment.
2
None of the other cases cited by the Bank for this proposition involved appellate review of a trial
court’s findings and conclusions after a bench trial. See Nguyen v. Citibank, N.A., 403 S.W.3d 927, 930–31
(Tex. App.—Houston [14th Dist.] 2013, pet. denied) (summary judgment affidavit testimony without
supporting documentation was sufficient to establish ownership of account where there was no
controverting summary judgment evidence); First Gibraltar Bank, FSB v. Farley, 895 S.W.2d 425, 428–
29 (Tex. App.—San Antonio 1995, writ denied) (citing cases holding that affidavit testimony is sufficient
to conclusively establish ownership of promissory note even in absence of supporting documentation if
there is no controverting summary judgment evidence, but concluding the rule did not apply where an
internally inconsistent affidavit created a fact issue on ownership of note); Hou-Tex Printers, Inc. v.
Marbach, 862 S.W.2d 188, 190–91 (Tex. App.—Houston [14th Dist.] 1993, no writ) (“mere allegation” in
summary judgment motion that plaintiffs were owners and holders of promissory note was not evidence,
and “[f]ailure to supply this essential proof [was] fatal”), and NCNB Tex. Nat’l Bank v. Johnson, 11 F.3d
1260, 1265 (5th Cir. 1994) (summary judgment affidavit with additional evidence of bank’s ownership of
promissory note was sufficient). Consequently, in contrast to this appeal, these cases did not require the
creditors to conclusively prove their ownership of the accounts. See Dow Chem. Co., 46 S.W.3d at 241–42.
The creditors were required only to show there was no genuine issue of material fact regarding their
ownership, see TEX. R. CIV. P. 166a(c), and the trial courts were not required to judge witness credibility.
See Palestine Herald-Press Co. v. Zimmer, 257 S.W.3d 504, 508 (Tex. App.—Tyler 2008, pet. denied)
(courts do not make credibility or weight determinations of summary judgment evidence).
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Id. at *1–3. Here, the Bank bears the opposite appellate burden, to conclusively
establish the “contrary proposition” to the trial court’s finding that the Bank “lacked
proof that it owned the account upon which the charges were made” and its
conclusion that the Bank “failed to show that it owned the original claim on the date
of the filing of this lawsuit.” See Dow Chem. Co., 46 S.W.3d at 241–42. Further,
because the trial court was the sole judge of credibility of the evidence and the weight
to be given the witnesses’ testimony, “we will not substitute our judgment for that
of the fact finder” in our review on appeal. See Fenlon v. Harris Cty., 569 S.W.3d
783, 791 (Tex. App.—Houston [1st Dist.] 2018, no pet.).
When cross-examined on whether there was a written assignment from
Citibank to American Express, McCarter testified that “I don’t know what written
assignment means.” He explained that “American Express purchased the Citibank
Hilton entire portfolio,” but gave no further specific information about the
“portfolio” or the inclusion of Sherwood’s Hilton Honors account in it. During direct
examination, the court asked McCarter:
THE COURT: . . . [I]s there any documentation indicating Citibank,
we’re transferring everything over to American Express and it includes
Mr. Sher[wood]’s account?
A. So there’s a memo on the account for Mr. Sher[wood]’s account that
this was a transferred account.
THE COURT: Do you have that document?
MR. DEGRASSE [attorney for the Bank]: No, Judge.
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Although the Bank argues that we must credit “conclusive evidence” that “allows of
only one logical inference,” see City of Keller v. Wilson, 168 S.W.3d 802, 814 (Tex.
2005) (internal quotation omitted), we disagree that McCarter’s testimony
conclusively proved the Bank’s ownership of the Hilton Honors account. Cf.
Ranjbar, 2016 WL 303832, at *2 (bank’s evidence included testimony of witness
with personal knowledge of bank’s merger and ownership of account as well as
properly-authenticated business records supporting same).
Assuming the Bank proved its ownership of the Hilton Honors account, it was
also required to establish the elements of its breach of contract claim for the amount
it alleged to be due. The Bank argues it conclusively proved the amount due, relying
on McCarter’s testimony and on Exhibit 2B, consisting of 2018 statements on the
Hilton Honors account. The first Hilton Honors account statement in Exhibit 2B is
dated February 19, 2018. It shows a “previous balance” of $8,908.50, with “$0.00”
in “new charges.” None of the subsequent statements show any charges on the card.
The Bank’s total claim of $9,190.22 on the account results from 2018 interest
charges on the previous balance.
There is no documentation supporting the “previous balance,” nor could
McCarter testify to it. McCarter explained that all of the 2017 account statements
for the card are missing. He also testified that any charges from 2016 were “made
under Citibank. They weren’t our charges. They were taking those charges from
Citibank in the transfer over.” Consequently, McCarter did not provide evidence that
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Sherwood’s use of the Hilton Honors card resulted in the $8,908.50 “previous
balance” shown on the February 19, 2018 statement. Although as the Bank argues,
Sherwood “said nothing” to dispute that $9,190.22 was due on the card, Sherwood’s
silence does not provide affirmative evidence that was otherwise lacking. We
conclude that the Bank did not conclusively prove its right to judgment on the Hilton
Honors account, and we decide this portion of the Bank’s issue against it. See Dow
Chem. Co., 46 S.W.3d at 241–42 (no-evidence complaint should be sustained only
“if the contrary proposition is established as a matter of law”).
2. The EveryDay card
The Bank again relies on McCarter’s testimony, the card member agreement,
and the account statements that were admitted into evidence as conclusive proof of
the Bank’s ownership of the EveryDay card account and the amounts allegedly due.
The Bank argues the card member agreement lists American Express Centurion
Bank as issuer of the card, and a subsequent statement informed Sherwood of the
issuer’s legal entity change to American Express National Bank. It contends there is
evidence that the Bank issued the card to Sherwood, Sherwood admitting using the
card, and Sherwood made payments to the Bank.
Sherwood responds that the Bank brought suit on account number 62009 but
at trial sought to prove a $17,613.25 balance due on account number 61001.
Although McCarter testified that an account number may change “because of lost or
stolen cards, because the card member requests it, [or] because the card number has
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been compromised,” Sherwood testified that to his recollection, none of these events
occurred. Further, although Sherwood admitted using the card “[i]n the past,”
identified a “previous address” on some of the statements, and answered “No” when
asked if he had paid “the balance in full,” he did not admit to any specific balance
due on either account number 62009 or account number 61001.
We conclude the Bank did not offer conclusive proof of its claim that
Sherwood owed $17,613.25 on account number 62009. See Dow Chem. Co., 46
S.W.3d at 241–42. We decide this portion of the Bank’s issue against it.
CONCLUSION
The trial court’s judgment is affirmed.
/Leslie Osborne//
200153f.p05 LESLIE OSBORNE
JUSTICE
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Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
AMERICAN EXPRESS On Appeal from the 101st Judicial
NATIONAL BANK, Appellant District Court, Dallas County, Texas
Trial Court Cause No. DC-18-14540.
No. 05-20-00153-CV V. Opinion delivered by Justice
Osborne. Justices Reichek and
CHRISTOPHER SHERWOOD Carlyle participating.
A/K/A CHRISTOPHER J.
SHERWOOD A/K/A CHRIS
SHERWOOD, Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial
court is AFFIRMED.
It is ORDERED that appellee Christopher Sherwood a/k/a Christopher J.
Sherwood a/k/a Chris Sherwood recover his costs of this appeal from appellant
American Express National Bank.
Judgment entered this 27th day of January, 2022.
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