Lawrence Marshall Dealerships v. Ian Meltzer ( 2009 )

Reversed and Remanded and Memorandum Opinion filed January 20, 2009

Reversed and Remanded and Memorandum Opinion filed January 20, 2009.

In The

Fourteenth Court of Appeals

_______________

NO. 14-07-00920-CV

_______________

LAWRENCE MARSHALL DEALERSHIPS, Appellant

V.

IAN MELTZER, Appellee

On Appeal from the County Court at Law No. 1

Harris County, Texas

Trial Court Cause No. 887,188

M E M O R A N D U M    O P I N I O N

In this contract dispute, a car dealership and a customer disagree about the Apayoff@ amount owed by the customer on a leased vehicle used as a trade-in.  Because there is a genuine issue of material fact regarding this amount, we reverse the summary judgment granted by the trial court and remand the case for further proceedings.

I.  Factual and Procedural Background

On January 20, 2007, appellee Ian Meltzer traded his leased 2004 Lexus to Lawrence Marshall Dealerships (AMarshall@) and purchased a 2007 GMC Yukon. The parties assigned a trade-in value of $20,000 to the Lexus, and Marshall reduced the purchase price of the Yukon by that amount. 

It is undisputed that Meltzer informed salesman Glenn Rogers that the Lexus was a leased vehicle and gave Rogers the payment coupon book for the Lexus.  Rogers called the financial services corporation that held the lease, and based on information he learned during the phone call, he completed a Motor Vehicle Purchase Order (APurchase Order@) and an Authorization for Payoff (APayoff Authorization@); we refer to these documents collectively as Athe Sales Documents.@

The Purchase Order provides in relevant part:

If a trade-in is involved, the Buyer states that he is of legal age and competent to make this contract and that he is the sole true and lawful owner of the used car described in this contract and . . . there is no lien, mortgage, unpaid balance on any conditional sales agreement, or other [encumbrances] of any kind or character, including lien of any judgment or execution, except as stated above. . . . 

On one of the lines above this provision, ATrade Payoff #1@ is specified to be $3,750.00.  The Purchase Order further provides:

The buyer assumes responsibility for any difference in payoff in excess of amount shown on Buyer=s Order and will pay such difference in cash on demand.  If not so paid, Buyer authorizes dealer, at dealer=s option, to increase the monthly payments and contract balance to cover the difference and finance charges thereon.

The Payoff Authorization was directed to Hann Financial (AHann@), the holder of the note on the Lexus, and is signed by Meltzer.  This document provides as follows:

I hereby authorize you to accept from Lawrence Marshall Pontiac/GMC $3750.00 being the balance due on my account and you are instructed upon receipt of the above amount to surrender to them the ownership certificate of title, properly released. 

I understand that I am responsible for any difference in payoff amounts.

On February 15, 2007, Marshall sent Meltzer a demand letter in which it alleged that the payoff amount for the Lexus was actually $22,750.00.  Marshall therefore demanded payment of an additional $19,473.00.  Meltzer did not make the additional payment, and Marshall sued for breach of contract.

Marshall moved for traditional summary judgment, relying on the affidavit of its general manager John Bomberger, the Sales Documents, the demand letter, and an affidavit for attorneys= fees.  In his affidavit, Bomberger stated, AIn accordance with the Contract, we paid $3,750.00 which we thought was the payoff for the Lexus.  Thereafter, we determined the payoff was an additional $19,473.00.@

In his response and his cross-motion for summary judgment, Meltzer asserted that the term Apayoff@ is ambiguous.  Relying on the doctrine of contra proferentem, he argued that the term should be construed against Marshall, as the drafter of documents, to mean the total amount of the remaining lease payments on the Lexus at the time of the trade. He asserted in the alternative that the ambiguity created a fact issue precluding summary judgment.  In addition, Meltzer objected to Bomberger=s affidavit, and argued that Bomberger=s representation of the payoff amount was not competent summary-judgment evidence because the affidavit contained no foundation for the statement. Finally, Meltzer stated that there was a fact issue as to whether Marshall had mitigated its damages. 

In response to Meltzer=s motion, Marshall produced a second affidavit by Bomberger, in which he attested that Marshall executed and delivered a check for $19,818.08 to Hann Arepresenting the payoff on the 2004 Lexus (>the Lexus=) traded to us by Ian Meltzer. . . . Pursuant to the Motor Vehicle Purchase Order between us and Mr. Meltzer[,] we agreed to a trade allowance of $20,000.00.  We sold the Lexus for $20,000.00.@ 

The trial court granted Meltzer=s summary-judgment motion and denied Marshall=s motion.  This appeal timely ensued.

II.  Issues Presented

In two issues, Marshall challenges the trial court=s summary judgment in favor of Meltzer and its denial of summary judgment in Marshall=s favor.

III. Standard of Review

We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).  Summary judgment is proper when there are no disputed issues of material fact and the movant is entitled to judgment as a matter of law.  Tex. R. Civ. P. 166a(c).^[1] The movant must conclusively establish all essential elements of its claim.  City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979). Evidence is conclusive only if reasonable people could not differ in their conclusions.  City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005). 

Ordinarily, evidence favorable to the non-movant is taken as true, every reasonable inference is indulged in favor of the non-movant, and any doubts resolved in its favor. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003).  But when, as here, both sides move for summary judgment, each bears the burden of establishing that it is entitled to judgment as a matter of law; neither side can prevail because of the other=s failure to discharge its burden. City of Garland v. Dallas Morning News, 969 S.W.2d 548, 552 (Tex. App.CDallas 1998) (en banc), aff=d, 22 S.W.3d 351 (Tex. 2000).  On appeal, we review all summary judgment evidence, determine all questions presented, and render the judgment the trial court should have rendered.  Valence Operating Co., 164 S.W.3d at 661.  Thus, we may affirm the summary judgment entered, reverse and render a judgment for the other side if appropriate, or reverse and remand if neither party has met its summary judgment burden.  Hackberry Creek Country Club, Inc. v. Hackberry Creek Home Owners Ass=n, 205 S.W.3d 46, 50 (Tex. App.CDallas 2006, pet. denied).

IV. Analysis

A         Principles of Contract Construction

In determining whether the language of a contract is ambiguous, we look to the contract as a whole, in light of the circumstances present when the contract was executed.  Sun Oil Co.  (Del.) v. Madeley, 626 S.W.2d 726, 731 (Tex. 1981);^[2] see also Hewlett‑Packard Co. v. Benchmark Elecs., Inc., 142 S.W.3d 554, 561 (Tex. App.CHouston [14th Dist.] 2004, pet. denied) (AWe construe a contract from a utilitarian standpoint, bearing in mind the particular business activity sought to be served.@).  Ambiguity must be evident when the contract is read in context of surrounding circumstances, not after parol evidence of intent is admitted. Nat=l Union Fire Ins. Co. of Pittsburgh, PA v. CBI Indus., Inc., 907 S.W.2d 517, 521 (Tex. 1995) (per curiam); Williams v. Williams, 246 S.W.3d 207, 211 (Tex. App.CHouston [14th Dist.] 2007, no pet.). Stated differently, although parol evidence of the parties= intent is not admissible to create an ambiguity, see National Union, 907 S.W.2d at 520, the contract may be read in light of the surrounding circumstances to determine whether an ambiguity exists.  Balandran v. Safeco Ins. Co. of Am., 972 S.W.2d 738, 741 (Tex. 1998) (citing Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996), and Nat=l Union, 907 S.W.2d at 520).  Moreover, a contract is not ambiguous if it can be ascribed a certain or definite meaning as a matter of law.  Universal Health Servs., Inc. v. Renaissance Women=s Group, P.A., 121 S.W.3d 742, 746 (Tex. 2003);  Columbia Gas, 940 S.W.2d 587 at 589. 

We first examine the words of the contract, and considering the business activity to be served, determine whether both proffered interpretations are reasonable.  XCO Prod. Co. v. Jamison, 194 S.W.3d 622, 628 (Tex. App.CHouston [14th Dist.] 2006, pet. denied).  If both interpretations are reasonable, then the contract is ambiguous and there is a genuine issue of material fact regarding the parties= intent.  J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003); Columbia Gas, 940 S.W.2d at 589.

B.        Definition of APayoff@

Here, the parties= dispute focuses on the meaning of the word, Apayoff.@  Each of the grounds on which Meltzer moved for summary judgment is based on the predicate that the word Apayoff,@ as used in the Sales Documents, is ambiguous.  In contrast, Marshall=s summary-judgment motion contains no definition of the word Apayoff,@ but in response to Meltzer=s motion, Marshall argued that its finance director correctly defined Apayoff@ as Awhat a customer owes on a vehicle.@

After reviewing the Sales Documents under the applicable rules of contract construction, we conclude that the term Apayoff@ is not ambiguous.  The Purchase Order lists the payoff amount as $3,750.00, and the Payoff Authorization describes this sum as Athe balance due on [Meltzer=s] account@ with Hann for the release of the title to the Lexus.  This is consistent with the ordinary understanding of the word: Apayoff,@ when used in reference to a debt or creditor, means to pay in full.  Webster=s Third New Int=l Dictionary, 1659 (Philip Babcock Gove, ed., 3d ed., 1993). 

Meltzer presented no argument or evidence that $3,750.00 was the amount due to Hann for the release of title to the Lexus; thus, there is no basis on which to affirm summary judgment in his favor.  We therefore sustain Marshall=s first issue and reverse the trial court=s judgment.

C.        Determination of Payoff Amount

In response to Marshall=s summary-judgment motion, Meltzer objected to Bomberger=s affidavit regarding the payoff amount and challenged its competency as summary-judgment evidence.  According to Meltzer, Bomberger=s statement lacks foundation, and Bomberger failed to state facts demonstrating personal knowledge of the payoff amount or explaining how the payoff was calculated.  We agree.

Conclusory statements in an affidavit unsupported by facts are insufficient to support or defeat summary judgment.  Wadewitz v. Montgomery, 951 S.W.2d 464, 466 (Tex.1997); Pena v. Neal, Inc., 901 S.W.2d 663, 668 (Tex. App.CSan Antonio 1995, writ denied).  A conclusory statement is one that does not provide the underlying facts to support the conclusion.  1001 McKinney v. Credit Suisse First Boston Mortgage Capital, 192 S.W.3d 20, 27 (Tex. App.CHouston [14th Dist.] 2005, pet. denied).  Thus, the mere recitation that an affidavit is based on personal knowledge is inadequate if the affidavit does not affirmatively show a basis for such knowledge.  Southtex 66 Pipeline Co., Ltd. v. Spoor, 238 S.W.3d 538, 542B43 (Tex. App.CHouston [14th Dist.] 2007, pet. denied); Leavings v. Mills, 175 S.W.3d 301, 312 (Tex. App.CHouston [1st Dist.] 2004, no pet.). Although Bomberger stated his job title, he did not identify his responsibilities or other basis for personal knowledge of the facts he asserts.  Moreover, he identifies different payoff amounts in each of his two summary-judgment affidavits without explaining how the figures were calculated. 

Inasmuch as the record contains no competent summary-judgment evidence of the amount due on Meltzer=s account with Hann for release of the title to the Lexus on January 20, 2007, a genuine issue of material fact prevents summary judgment for either party.  We therefore overrule Marshall=s second issue.

V. Conclusion

Because neither party established its entitlement to judgment as a matter of law, we reverse the trial court=s judgment and remand the case for further proceedings in accordance with this opinion.                                 

/s/        Eva M. Guzman

Justice

Panel consists of Justices Yates, Guzman, and Sullivan.

---

^[1]  Here, both parties moved for traditional summary judgment.  See Tex. R. Civ. P. 166a(c). Although Meltzer includes Ano-evidence motion for summary judgment@ in his motion=s title, he failed to identify any element of Marshall=s breach-of-contract claim for which there is no evidence.  He argues that Marshall failed to produce competent summary-judgment evidence of the payoff amount, but this is a basis on which to deny traditional summary judgment to Marshall, not a basis on which to grant no-evidence summary judgment to Meltzer.  Meltzer also argues that Marshall presented no evidence that it attempted to mitigate its damages, but mitigation of damages is an affirmative defense.  See Taylor Foundry Co. v. Wichita Falls Grain Co., 51 S.W.3d 766, 774 (Tex. App.CFort Worth 2001, no pet.).  Meltzer failed to raise mitigation in his answer, and thus, the issue is waived.  See Tex. R. Civ. P. 94.  Moreover, as the party relying on this defense, it was Meltzer and not Marshall who was required to produce supporting evidence.  Thus, no-evidence summary judgment could not be sustained on this basis.  See Brown v. Hearthwood II Owners Ass=n, Inc., 201 S.W.3d 153, 157B58 (Tex. App.CHouston [14th Dist.] 2006, pet. denied).

^[2]  AConsideration of the facts and circumstances surrounding the execution of a contract, however, is simply an aid in the construction of the contract=s language.  There are limits.  For example, when interpreting an integrated writing, the parol evidence rule circumscribes the use of extrinsic evidence.@  Id.