Janice R. Powells, M.D., and Houston Infant & Adolescent Medicine, P.A v. Nova Factor, Inc.

Affirmed and Memorandum Opinion filed March 27, 2007

Affirmed and Memorandum Opinion filed March 27, 2007.

In The

Fourteenth Court of Appeals

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NO. 14-05-00912-CV

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JANICE R. POWELLS, M.D., AND HOUSTON INFANT & ADOLESCENT MEDICINE, P.A., Appellants

V.

NOVA FACTOR, INC., Appellee

On Appeal from the County Court at Law No. 4

Harris County, Texas

Trial Court Cause No. 824,459

M E M O R A N D U M   O P I N I O N

In this case, appellants Janice R. Powells, M.D. and her professional association, Houston Infant and Adolescent Medicine, P.A. (collectively, APowells@), appeal from a grant of summary judgment in favor of appellee Nova Factor, Inc. (ANova@) on a suit on a sworn account.  For the reasons explained below, we affirm.

I.        Factual Background

In 2001, Nova, a pharmaceutical services company, entered into a wholesale purchase agreement and a physician agreement to sell Powells a medication identified as Synagis7, which comes in vials for injection.  Under the agreements, Powells could order and obtain the medication first, and then pay Nova as provided in the wholesale purchase agreement.  According to Nova=s records, the cost of the medication was $580.09 for a 50 mg vial, and  $1,074.80 for a 100 mg vial.  Powells received the medications and administered them to her patients for several months, but did not pay Nova for them.  As of February 2003, the amount owed on the account was $23,390.01.

In 2004, Nova sued Powells on a sworn account, and later added a breach of contract claim.  Powells=s answer included a general denial and various defenses, as well as a AVerification@ in which Powells stated that she Ahad read the answer and the facts stated in paragraphs one, two, three, four, and five@ were within her knowledge and were true and correct.

In June 2005, Nova moved for summary judgment on the sworn account, and sought attorney=s fees.  In response, Powells filed an AObjection to Plaintiffs Motion for Summary Judgment,@  in which she claimed she was not required to pay Nova for the medication unless she first received payment from an insurance company for it, and, because Nova had produced no evidence that she had been paid by an insurance companyCwith the exception of one instanceCNova was not entitled to summary judgment.

The trial court granted Nova=s motion for summary judgment, and awarded it the debt owed on the sworn account, pre- and post-judgment interest, and attorney=s fees and unspecified court costs.  Nova moved to modify the trial court=s judgment to specify the court costs and to request additional attorney=s fees and expenses.  The trial court agreed to the court costs, but did not award any additional attorney=s fees.  A modified final judgment was signed August 30, 2005.  This appeal followed.

II.       The Trial Court Did Not Err in Granting Nova=s Summary Judgment and Awarding $9,000 in Attorney=s Fees.

In a single issue, Powells challenges the trial court=s grant of summary judgment in favor of Nova for $23,391.01 and its award of $9,000 in attorney=s fees.  We will address each complaint separately below.  

A.      The Suit on a Sworn Account

In order to establish sufficient evidence to support a prima facie case in a suit on a sworn account, as well as summary disposition of the issue, the movant must Astrictly adhere@ to the provisions outlined in the Texas Rules of Civil Procedure.  Powers v. Adams, 2 S.W.3d 496, 498 (Tex. App.CHouston [14th Dist.] 1999, no pet.).  Under Rule 185, a plaintiff=s petition on a sworn account must be based on the business dealings of the parties and must be supported by an affidavit stating that the claim is, within the affiant=s knowledge, Ajust and true,@ that it is due, and that all lawful offsets, payments, and credits have been allowed.  Tex R. Civ. P. 185. 

Similarly, the defendant=s denial of a sworn account must be written and supported by an affidavit denying the account.  See Tex. R. Civ. P. 93(10), 185.  A sworn general denial is insufficient.  Huddleston v. Case Power & Equipment Co., 748 S.W.2d 102, 103 (Tex. App.CDallas 1988, no writ); Cooper Farms v. Scott Irrigation Constr. Inc., 838 S.W.2d 743, 746 (Tex. App.CEl Paso 1992, no writ).  When a defendant files a sworn denial of the account as required, Athe evidentiary effect of the itemized account is destroyed and the plaintiff is forced to put on proof of its claim.@  Powers, 2 S.W.3d at 498; Livingston Ford Mercury, Inc. v. Haley, 997 S.W.2d 425, 430 (Tex. App.CBeaumont 1999, no pet.) (finding defendant=s affidavit sufficient to force plaintiff to put on proof of its claim and finding plaintiff=s Acommon law proof@ established the elements of the claim as a matter of law).

Thus, even when a defendant verifies its sworn denial to a suit on a sworn account, A[a] plaintiff can properly recover summary judgment . . . if it files legal and competent summary judgment evidence establishing the validity of its claim as a matter of law.@  United Bus. Machs. v. Entm=t Mktg., Inc., 792 S.W.2d 262, 264 (Tex. App.C Houston [1st Dist.] 1990, no writ). Conversely, if a defendant fails to file a verified denial to a sworn account, the sworn account is received as prima facie evidence of the debt and the plaintiff/summary judgment movant is entitled to summary judgment on the pleadings. Powers, 2 S.W.3d at 498.

1.       The Sufficiency of Powells=s Answer and Denial of the Sworn Account

Nova contends that it should prevail on summary judgment because Powells did not file a verified special denial as required by Rules 93(10) and 183.  Nova points to the general denial in Powells=s answer, which recites the following: AThe Defendant denies all allegations of the Plaintiff and demands strict proof and trial by jury.  Defendant enters this answer as her general denial, pursuant to Rule 92, Texas Rules of Civil Procedure.@  Nova contends this denial, expressly pleaded under Rule 92 rather than Rule 93, is at most a verified general denial, which is insufficient to put Nova to its proof.  See Huddleston, 748 S.W.2d at 103.  Additionally, Nova claims that Powells=s verification, which avers that the facts stated in her answer are correct, is likewise insufficient as a special denial because it does not include a specific denial of Nova=s sworn account.

However, in the first paragraph of Powells=s answer, she states that she Adenies this account, attached to the Plaintiff=s Original Petition, and would show that the medications listed in Exhibit A were not received by her but by the patients listed in the exhibit.@  Concerning this allegation, Nova argues only that it was shown to be false because Powells=s own business records showed that she received the medications and administered them to her patients.

Assuming without deciding that Powells=s denial was sufficient to satisfy the requirements of Rules 93(10) and 185, the effect of a verified special denial would be to destroy the evidentiary effect of the pleaded sworn account, forcing Nova to put on proof of its claim.  See Powers, 2 S.W.3d at 498; Livingston Ford Mercury, 997 S.W.2d at 430. Because we find that Nova=s summary judgment evidence sufficiently established its claim on the sworn account, we do not find it necessary to address the sufficiency of Powells=s denial.

2.       Nova=s Summary Judgment Evidence Established its Claim as a Matter of Law

The essential elements of an action on an account are (1) that there was a sale and delivery of the merchandise; (2) that the amount of the account is just, that is, when the parties have agreed to prices, that the prices are charged in accordance with the agreement; and (3) the amount is unpaid.  See Hose Pro Connectors, Inc. v. Parker Hannifin Corp., 889 S.W.2d 555, 558 (Tex. App.CHouston [14th Dist.] 1994, no writ).  We review the trial court=s summary judgment de novo.  See Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).  A traditional summary judgment is proper if the motion and summary judgment evidence show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.  Tex. R. Civ. P. 166a(c).  We take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant=s favor. See Dorsett, 164 S.W.3d at 661.

Nova presented evidence that Powells received the medications, administered them to her patients, and billed the patients for the medications.  The evidence consisted of the agreements between Nova and Powells, Powells=s business records, Powells=s responses to Nova=s request for admissions, and the affidavit of a Nova employee attesting that Powells owed a total principal balance of $23,390.01 that was unpaid.  This evidence supports each of the elements of its action on the account. 

In response, Powells did not provide any evidence controverting the receipt of the medications or the validity of the charges, and did not dispute that the claim remained unpaid.  Instead, she claimed that under the agreement with Nova she would not have to pay for the medication if an insurance company did not pay for it 180 days after the shipment date, and, because Nova failed to show that she had been reimbursed by the insurance company (except in one instance), the trial court should have denied Nova=s motion for summary judgment.

In support of this defense, Powells urges us to consider provisions (h), (j), and (k) of the physician agreement.  Under these provisions, Powells (the APurchaser@) agreed to the following:

h)       To pay the distributor the invoiced amount within fifteen (15) days after receiving payment from the insurance company, except as provided in sections (j), (k) and (l).^[1]

j)        That if in the unlikely event the approved, Program-eligible Synagis7 vial has not been paid by an insurance company after 180 days following the shipment date, and thereafter remains unpaid, Purchaser will not be responsible for payment for the vial.

k)       Notwithstanding section (j), if the insurer, the patient=s parent(s) or guardian reimburses the Purchaser any amount, payment in full for that vial must be made to the distributor within fifteen (15) days.

Powells contends the agreement with Nova is unambiguous and we should construe it as a matter of law to excuse Powells from paying any amount to Nova unless she was paid by an insurance company, parent, or guardian.^[2]

When construing a contract, our primary concern is to ascertain the true intent of the parties as expressed in the instrument.  Lenape Res. Corp. v. Tenn. Gas Pipeline Co., 925 S.W.2d 565, 574 (Tex. 1996); Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983).  To achieve this, we examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless.  Coker, 650 S.W.2d at 393.  We construe a contract from a utilitarian standpoint, bearing in mind the particular business activity sought to be served.  Lenape Res., 925 S.W.2d at 574.  If a written contract is so worded that it can be given a definite or certain legal meaning, then it is not ambiguous and it can be construed as a matter of law.  Wal‑Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 728 (Tex. 2001); Lenape Res., 925 S.W.2d at 574.

Our reading of the contract leads us to a different conclusion than Powells reaches. Powells accurately stated the terms set out in paragraphs 3(h), 3(j), and 3(k) of the contract.  However, Powells failed to mention several paragraphs that impose obligations on her.  By paragraph 3(d), Powells agreed A[t]o obtain prior-authorization [by the insurer] of Synagis7 coverage when required.@  In paragraph 3(e), Powells agreed A[t]o file a claim within ten (10) days after [a] Synagis injection.@  Through paragraph 3(f), Powells promised A[t]o provide copies of insurance claims to the Program within ten (10) days [of]^[3] filing the claim.@  In paragraph 3(g), Powells agreed A[t]o work to ensure payment from the insurance company, using Program=s [assistance]^[4] as necessary.@  Paragraph 3(g) continues, A[s]uch activities may include submitting pre-approval documentation to the insurer, filing claims in a timely fashion, appealing denied claims, or other activities as needed.@  Finally, paragraph 3(m) noted the consequence to Powells if she did not fulfill her obligations under the agreement.  A[I]f the above terms are not met by [Powells] then the [vials sent to Powells are] no longer covered by the Program and will not be subject to the benefits of the Program.@

Powells did not address these many obligations in the trial court.  For example, she did not state that she filed claims with insurance companies, or that she obtained pre-authorization for injections she gave, or that she worked to ensure payment by the insurance company.  See Dolcefino v. Randolph, 19 S.W.3d 906, 916 (Tex. App.CHouston [14th Dist.] 2000, pet. denied) (AIf the movant=s motion and summary judgment proof facially establish his right to judgment as a matter of law, the burden shifts to the non-movant to raise a material fact issue sufficient to defeat summary judgment.@).

Nova proved that it sent the vials to Powells through the Synagis program, it proved the price of the vials was the agreed price, and it proved that it was not paid.  Powells in turn admitted the contract with Nova and she admitted that she did not pay for the vials.  Although she claimed that she did not receive the vials, she admitted that her patients received them and the documentary evidence proved receipt of the vials.  On these facts, Nova proved its claim as a matter of law.

Powells=s attempt to avoid the sworn account because she was not paid by either the insurance companies or the patients fails.  The provisions allowing Powells to avoid payment (provisions 3(h), (j), and (k)) are countered by the provisions requiring Powells to take specific actions to ensure payment by the insurers (provisions 3(d)B(g) and (m)). Under the contract, Powells received the benefits of the program only if she fulfilled her own obligations.  Powells never proved that she met any of her obligations under the contract.  Having failed to prove that she met any of her obligations under the contract, Powells=s attempt to avoid payment for the vials is futile.

In short, Powells failed to create a fact issue on Nova=s motion for summary judgment, and we overrule this portion of Powells=s issue.

B.      Attorney=s Fees

The remainder of Powells=s issue complains that Nova is not entitled to attorney=s fees of $9,000 because the amount is Aexcessive.@  Nova=s motion for summary judgment included a request for attorney=s fees supported by the affidavit of one of its attorneys, Glynda P. Stowers.  Powells contends the requested attorney=s fees were contested in the affidavit of her attorney, C.J. Calnan.  However, Calnan did not challenge the amount of the fees; he merely stated that, in his opinion, no attorney=s fees should be awarded because Nova failed to prove it was owed any money, except for one injection that was reimbursed by insurance.^[5] Because Powells did not assert this complaint in the court below, she has preserved nothing for review.  See Tex. R. App. P. 33.1(a).

III.      Conclusion

We therefore overrule Powells=s issue in its entirety and affirm the trial court=s judgment.

/s/      Wanda McKee Fowler

Justice

Judgment rendered and Memorandum Opinion filed March 27, 2007.

Panel consists of Justices Fowler, Edelman, and Frost.

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^[1]  Section (l) of the agreement is not relevant to this issue.

^[2]  Powells also appears to suggest that Dr. Powells individually is not liable in the capacity in which she was sued.  However, this argument was not raised in response to Nova=s motion for summary judgment; therefore, we do not consider it. Likewise, Powells did not raise section (k) of the physician agreement in its objection to Nova=s summary judgment motion.

^[3]  Although the word is partly illegible in the contract we have, it must be Aof@ or Afrom@ or a word with similar meaning.

^[4]  Again, the word is partly illegible in our record, but the only logical choice based on letters we can read is Aassistance.@

^[5]  Although Powells does not direct this Court=s attention to it, Powells=s objection to Nova=s motion to modify the judgment included another affidavit by attorney Calnan, in which he averred the following: AI have reviewed the affidavit of Attorney Glenda Stowers and the amounts she seeks are not reasonable or [sic] are they necessary.@  However, this conclusory statement, unsupported by facts, is insufficient to raise a material issue of fact on the alleged excessiveness of Nova=s attorney=s fee award.  See Skelton v. Comm'n for Lawyer Discipline, 56 S.W.3d 687, 692 (Tex. App.CHouston [14th Dist.] 2001, no pet.) (A[a]ffidavits containing conclusory statements unsupported by facts are not competent summary judgment proof.@).