International Paper Company, Timberstar Texarkana I & II, L.P. v. Barbara Kerstetter ( 2008 )

In The Court of Appeals Sixth Appellate District of Texas at Texarkana

______________________________

No. 06-08-00039-CV ______________________________



INTERNATIONAL PAPER COMPANY, TIMBERSTAR TEXARKANA I & II, L.P., Appellants

V.

BARBARA KERSTETTER, ET AL., Appellees

---

On Appeal from the 115th Judicial District Court Marion County, Texas Trial Court No. 0200157

---

Before Morriss, C.J., Carter and Moseley, JJ. Memorandum Opinion by Chief Justice Morriss

MEMORANDUM OPINION

International Paper Company and Timberstar Texarkana I & II, L.P., appellants, have filed with this Court a motion to dismiss their pending appeal in this matter. The appellants represent to this Court that the parties have reached a full and final settlement. In such a case, no real controversy exists, and in the absence of a controversy, the appeal is moot.

We grant the motion and dismiss this appeal.

Josh R. Morriss, III

Chief Justice

Date Submitted: June 4, 2008

Date Decided: June 5, 2008

decoration: none; color: black; vertical-align: middle; text-indent: 0in } body { font-family: "Times New Roman", serif; font-size: 12pt; font-weight: normal; font-style: normal }

In The

Court of Appeals

Sixth Appellate District of Texas at Texarkana

______________________________

No. 06-04-000140-CV

______________________________

JB JOYCE, LTD. AS SUCCESSOR TO

CONSTRUCTORS AND ERECTORS, LTD., Appellant

V.

REGIONS FINANCIAL CORP., Appellee

---

On Appeal from the 76th Judicial District Court

Camp County, Texas

Trial Court No. CV-03-3960

---

Before Morriss, C.J., Ross and Carter, JJ.

Opinion by Justice Carter

O P I N I O N

            A summary judgment allowed Regions Financial Corporation to foreclose on property based on a tax lien which had been transferred to it. The property taxes were originally assessed against business property known as the Leesburg Asphalt Company located in Camp County, Texas. The pleadings indicate that defendants, JB Joyce, Ltd. as Successor to Constructors and Erectors, Ltd., A & R Enterprises, Inc. d/b/a Service Electric, and Linco-Electromatic, Inc. and Linco-Electromatic Measurement, Inc. (hereinafter referred to as Joyce), had filed mechanics' and materialmen's liens on the property in question. Regions Bank became the owner of the property by foreclosure. Regions Bank (the Bank) authorized Regions Financial Corporation (RFC) to pay the taxes for the years 2002 and 2003. The Bank then executed two real estate lien notes for the amounts paid. The Bank authorized Camp County Central Appraisal District to transfer its liens to RFC. Camp County Central Appraisal District received $40,456.61 for 2002 taxes and $29,617.23 for 2003 taxes from RFC and transferred its tax liens to RFC, pursuant to provisions of Section 32.06 of the Property Tax Code. Tex. Tax Code Ann. § 32.06 (Vernon 2001). RFC brought an in rem suit against Joyce, asserting a lien on the real property on which the taxes were assessed and requesting foreclosure of the tax lien on the real estate and attorney's fees. In support of its motion for summary judgment, RFC presented the affidavit of Matt Spencer. Joyce alleges that the summary judgment proof is incompetent and fails to provide proof of default and acceleration of the real estate lien notes and presents only conclusory statements. We reverse the judgment of the trial court.

Standard of Review

            The standards for reviewing a "traditional" motion for summary judgment are well settled. Both parties cite Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985), as the appropriate standard, and we will review this summary judgment based on it.

Competency of Spencer's Affidavit

            RFC filed with its motion for summary judgment an affidavit of Spencer, who claimed to have personal knowledge of the matter stated in the affidavit. Spencer's affidavit states that he was the servicing officer in charge of the disposition of the Leesburg Asphalt Plant located in Camp County, Texas, and as such, he was the custodian of the records for RFC. He then attached twenty-three pages of business documents and presented a proper affidavit proving up the documents as business records. In the affidavit, Spencer sets out that RFC, at the request of the Bank, paid to Camp County Central Appraisal District $40,456.61 for 2002 taxes and $29,617.23 for 2003 taxes on the property in question, and took notes from the Bank in those principal amounts. As to each note, Spencer stated "there has occurred default and acceleration. Such note is wholly due and payable." These allegations were not contradicted at the trial court level.

            The unchallenged allegations are set out that Spencer is the authorized representative of RFC and that he has personal knowledge of the matters stated in the affidavit. To qualify as valid summary judgment evidence, an affidavit must state facts showing the affiant is competent to testify to the matters stated in the affidavit. Tex. R. Civ. P. 166a(f). If no objection is made to the affidavit's failure to show the affiant is competent to testify, the defect is waived. Rizkallah v. Conner, 952 S.W.2d 580, 586 (Tex. App.—Houston [1st Dist.] 1997, no writ). Spencer's affidavit not only states that he has personal knowledge of the matters stated, but also provides factual information showing his competence to testify. In this case, there is no objection made to Spencer's competence to testify, and his testimony includes his relationship as the servicing officer in charge of the disposition of Leesburg Asphalt Plant. We believe that Spencer is shown to be competent to testify.

Default and Acceleration Proof

            Joyce further argues that the summary judgment proof that RFC was entitled to foreclose on its liens is insufficient because it contains only conclusory statements.

            A "conclusory statement" is a statement that does not provide the underlying facts to support the conclusion. Haynes v. City of Beaumont, 35 S.W.3d 166, 178 (Tex. App.—Texarkana 2000, no pet.). A legal conclusion is insufficient to establish the existence of a fact in support of a summary judgment. Mercer v. Daoran Corp., 676 S.W.2d 580, 583 (Tex. 1984).

            An objection that an affidavit is conclusory is viewed as an objection to the substance of the affidavit that can be raised for the first time on appeal. Haynes, 35 S.W.3d at 178 (citing Green v. Indus. Specialty Contractors, Inc., 1 S.W.3d 126, 130 (Tex. App.—Houston [1st Dist.] 1999, no pet.)). An affidavit must allege specific facts of a nature that can be effectively countered by opposing evidence. Chhim v. Univ. of Houston, 76 S.W.3d 210, 216 (Tex. App.—Texarkana 2002, pet. denied).

            To recover on its liens, RFC had to prove that the Bank had not paid the notes in a timely manner and that RFC had declared the entire debt had matured. The affidavit states only that RFC took notes from the Bank "upon which there has occurred default and acceleration. Such note[s] [are] wholly due and payable." There is no other evidence on these issues. RFC responds that these allegations are not legal conclusions. We disagree.

            A conclusory statement can be either a legal conclusion or a factual conclusion. See Rizkallah, 952 S.W.2d at 587. Logical conclusions based on stated underlying facts are not improper. However, statements that are mere legal conclusions are improper. To allow such testimony is to reduce to a legal issue a matter that should be resolved by relying on facts. Id. An example of a legal conclusion is found in Mercer, 676 S.W.2d at 583. There, the affidavit stated the debt was "renewed and extended," which the Texas Supreme Court found to be a legal conclusion and insufficient to establish the existence of a fact in support of a motion for summary judgment. Id. Here, the conclusion is that default and acceleration had occurred. For default (failure to timely pay the note) and acceleration (declaring the entire indebtedness due) to occur, some acts or omissions had to happen. The affidavit does not state that the Bank failed to make payments as scheduled. Even if the notes were not paid as required, RFC had the option to declare the entire indebtedness due, but it was not required to do so. The affidavit is silent as to any facts indicating RFC exercised the option to declare the entire indebtedness due. Here, the terminology that default and acceleration had occurred is similar to Mercer, where the language of the affidavit was that the debt had been "renewed and extended." We find the summary judgment proof is lacking in the statement of any facts that the promissory notes were not timely paid and that the entire debt had been declared mature. Without such evidence, the proof that the tax liens could be foreclosed fails. We sustain Joyce's point of error and find that the summary judgment proof does not entitle RFC to judgment as a matter of law. Due to this disposition, we do not need to address Joyce's issue concerning the attorney's fees.

            We reverse the judgment of the trial court and remand the case to the trial court for further proceedings in accordance with this opinion.

                                                                        Jack Carter

                                                                        Justice

Date Submitted:          June 3, 2005

Date Decided:             June 21, 2005