Adrian Rafael Mejia v. Mobiloil Federal Credit Union

In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-21-00079-CV
__________________
ADRIAN RAFAEL MEJIA, Appellant
V.
MOBILOIL FEDERAL CREDIT UNION, Appellee
__________________________________________________________________
On Appeal from the County Court of Law No. 1
Jefferson County, Texas
Trial Cause No. 135149
__________________________________________________________________
MEMORANDUM OPINION
In this suit to recover a deficiency on a debt, Adrian Rafael Mejia,
the debtor, appeals from a judgment awarding Mobiloil Federal Credit
Union, the creditor, around $13,772 for the deficiency left on the loan.1
1For convenience, we have rounded all numbers mentioned in the
opinion other than those we have quoted from exhibits in the record to
whole numbers. Together with the contract damages award, the
judgment the trial court signed includes additional awards for attorney’s
fees, prejudgment and post-judgment interest, and costs of court.
1
In his first issue, Mejia contends that in the summary judgment
proceeding that led to the trial court’s judgment, the trial court erred in
granting Mobiloil’s combined traditional and no-evidence motion for
summary judgment for two reasons. First, he claims Mobiloil failed to
prove he was in default on his loan when Mobiloil accelerated his note.
Second, Mejia argues that a genuine issue of material fact exists on his
affirmative defense that Mobiloil failed to mitigate its damages by
demanding payment from the company that insured his vehicle against
damages before selling it at an auction, which he claims would have also
reduced the outstanding balance he owed Mobiloil on his loan.
In his second issue, Mejia argues the trial court erred in overruling
his objections to the affidavit of the president of Safety Adjusters, Inc.,
the company that repossessed and stored Mejia’s vehicle. The affidavit is
relevant to Mejia’s claim that his SUV was damaged by water due to
flooding after it was repossessed. In the affidavit, the president of Safety
Adjusters swore that while Mejia’s vehicle was in Safety Adjuster’s
possession, “[t]he condition of the vehicle, when it left Safety Adjusters,
Inc., was the same as when it was recovered by Safety Adjusters, Inc.”
2
Because the trial court did not err in granting Mobiloil’s combined
motion for summary judgment, we will affirm.
Background
After signing a Retail Installment Contract to obtain a loan, Adrian
Rafael Mejia bought a used SUV from Energy Country Ford. Mejia
financed $39,687 of the vehicle’s cost. Under his loan, Energy Country
Ford had the right to assign the Note to Mobiloil. No one disputes that
Mobiloil acquired the Note from the dealership where Mejia bought his
car.
The terms of Mejia’s loan required him to repay the loan (with
interest) in seventy-two monthly installments. Mobiloil also acquired a
security interest in Mejia’s SUV, and the loan’s provisions gave Mobiloil
a security interest in Mejia’s SUV to secure “all your promises in it.”
Under the loan, Mejia was in default upon failing to make an installment
payment “when it is due[.]” Mobiloil had other rights under the loan’s
provisions too, including the right to accelerate the loan on Mejia’s
default, demand payment in full, and repossess and sell the SUV.
The summary-judgment evidence shows that Mejia signed the
Retail Sales Contract in October 2018. The terms of the Retail Sales
3
Contract required Mejia to make monthly loan payments of $683, with
the first payment due on November 22, 2018. A payment was late if not
received by Mobiloil fifteen days after it was due. If more than fifteen-
days late, the agreement required Mejia to pay a late charge of five
percent of the scheduled payment.
Mejia made his first payment under the Retail Sales Contract—
which was due on November 22—on December 10, 2018. That made his
first payment late. Mejia’s payment history over the life of the loan before
Mobiloil accelerated the debt reflects that Mejia sometimes made his
payments outside the fifteen-day grace period and sometimes paid less
than the scheduled payment he owed on the debt.
Mejia made ten payments on the loan before August 29, 2019, when
Mobiloil declared the loan in default. As mentioned, Mejia’s December
2018 payment was more than fifteen-days late, but that payment didn’t
include the five percent late-charge penalty. Mejia’s April 2019 payment
was also late, and when he made that payment, he paid less than half his
regularly scheduled payment that month. While Mejia’s made his May
2019 payment on time, he didn’t pay the $683 under his payment
schedule for that month. Instead, he paid around half that amount. Had
4
Mejia made timely payments of $683 in the ten months before Mobiloil
accelerated the debt, Mejia would have paid around $6830 in principal
and interest on the loan, not including late charges and fees. When
Mobiloil accelerated the loan Mejia had paid Mobiloil just $6193 in
principal and interest on the loan, not including late charges and fees.
After Mejia failed to cure the deficiency, Mobiloil repossessed the
SUV. Mobiloil advised Mejia the SUV would be sold “sometime after
09/27/2019[,]” and that if Mejia needed to remove anything from the
vehicle, he should contact Safety Adjusters and arrange to remove his
possessions from the vehicle before it was sold. Mejia arranged to remove
his property from the SUV, and in an affidavit that Mejia filed just four
days before the trial court granted Mobiloil’s motion, Mejia swore:
When I reached the vehicle, I personally observed a water line
indicating the vehicle had been partially submerged in water.
In addition, when I observed the interior of the vehicle, the
vehicle had moldy, wet smell and the interior of the vehicle
was damp. My personal belongings had also been damaged by
water.
In November 2019, Mobiloil advised Mejia that although it had sold
the SUV, it received less money from the sale than he owed on his loan.
According to Mobiloil’s letter, Mejia owed Mobiloil $13,797 after Mobiloil
5
had accounted for the proceeds from the sale ($23,200), the expenses
Mobiloil incurred for repossessing and selling the SUV ($750), and the
refund Mobiloil received from Energy Country Ford for the premium
Mejia paid on a GAP and Extended Warranty policy ($1,781), which
Mejia bought when he purchased the SUV from Energy Country Ford.
In March 2020, Mobiloil sued Mejia for breaching the Retail Sales
Contract. It sought to recover the amount it claimed Mejia owed it on the
loan ($13,772), prejudgment interest under the contract on that amount,
and attorney’s fees. 2 After Mejia answered, Mobiloil moved for summary
judgment, alleging the evidence showed Mejia defaulted on the loan and
that as of January 3, 2020, he owed Mobiloil $13,772 plus 7.5 percent
interest as provided by the contract. Mobiloil filed exhibits to support its
motion, including the affidavit of Shellye Kimler, Mobiloil’s records
custodian, and eight pages of records that Mobiloil kept in the regular
course of business on Mejia’s loan. Kimler swore that Mejia failed to pay
Mobiloil as agreed under the terms that applied to Mejia’s loan. She also
2It’snot clear from the record why Mobiloil told Mejia his deficiency
was $13,797 in its letter of November 2019 but then sued him for $13,772,
twenty-five dollars less, in March 2020.
6
swore that as of January 3, 2020, the outstanding balance on Mejia’s loan
was $13,772.
Although Mejia responded to Mobiloil’s motion, he didn’t file
evidence to support his response. Mejia also amended his answer, raised
two affirmative defenses, and filed counterclaims. As affirmative
defenses, Mejia alleged Mobiloil breached the Retail Sales Contract first
and failed to mitigate its damages by notifying Mejia’s GAP insurer that
his SUV had been damaged in a flood. As counterclaims, Mejia alleged
Mobiloil (1) breached the contract by “unilaterally modifying the
contract’s repayment terms,” (2) negligently failed to ensure that his
vehicle was protected from being damaged by water due to flooding while
it was in Safety Adjusters’ possession, (3) negligently entrusted the
vehicle to Safety Adjusters, (4) negligently failed to notify his GAP
insurer of damage caused by the flood so the insurance proceeds under
the GAP policy could offset the outstanding balance that he owed Mobiloil
on the loan, and (5) engaged in unfair debt collection practices (a) by
collecting interest, fees, charges or expenses that were not authorized by
the Retail Sales Contract, (b) by modifying the terms of the agreement,
7
and (c) by accelerating the debt based on his alleged noncompliance with
the change Mobiloil unilaterally made in the contract’s terms.
Months later, Mobiloil filed an amended combined traditional and
no-evidence motion for summary judgment. The exhibits filed to support
the combined motion include Kimler’s affidavit, Mobiloil’s business
records, the Retail Sales Contract, Mejia’s Answers to Mobiloil’s
Interrogatories and Requests for Admission, the affidavit of Mobiloil’s
attorney, and the affidavit of Lawrence Ray (the president of Safety
Adjusters, Inc.).
Four days before the trial court conducted the hearing on Mobiloil’s
combined motion for summary judgment, Mejia responded to Mobiloil’s
amended motion. In his response, Mejia objected to Ray’s affidavit,
claiming the statements Ray made in his affidavit were not based on his
personal knowledge and constituted hearsay because Ray didn’t
personally observe the flood that Mejia alleged had damaged his car and
because Ray failed to state he had personally inspected Mejia’s SUV.
Mejia also asked the trial court to allow more time for discovery, arguing
that by objecting to the discovery he served on Mobiloil, Mobiloil had
interfered with his ability to show whether the GAP insurance on his
8
SUV would have covered the damages to his SUV when it was on Safety
Adjusters’ lot. According to Mejia, any payments Mobiloil might have
received under his GAP policy would have reduced the remaining balance
on his loan after it was sold at auction had Mobiloil notified the GAP
insurer of the flood event that had damaged his SUV while it was on
Safety Adjusters’ lot.
Mejia also argues the discovery he wanted and was entitled to have
Mobiloil produce would have revealed facts that were relevant to his
counterclaims and affirmative defenses, specifically his claim that
Mobiloil breached the contract first and his claim that Mobiloil engaged
in unlawful debt collection practices in collecting the debt. Finally, in the
unsworn declaration attached to his response, Mejia states that on the
day Mobiloil repossessed his vehicle, he “had made all payment that had
become due on the vehicle.” As to the alleged damage to his SUV from
the flood, he declared that while retrieving personal items from the SUV
on Safety Adjusters’ lot, he “observed a water line indicating that the
vehicle had been partially submerged in water.” Mejia also stated in his
declaration that when he saw the SUV in Safety Adjusters’ lot, the
interior of the SUV was “damp” and it had “a moldy, wet smell.”
9
On January 11, 2021, the trial court heard Mobiloil’s combined
traditional and no-evidence motion for summary judgment by
submission. It found $13,772 was due and owing under the Retail Sales
Contract on Mejia’s loan. In its judgment, the court awarded Mobiloil
$13,772 on its breach of contract claim, attorney’s fees, prejudgment
interest, post-judgment interest, and court costs. The judgment states”
[a]ll relief not expressly given is denied,” and the judgment contains
language indicating the trial court intended its judgment to be final.
Mejia filed a motion for new trial, but it was overruled by operation of
law. This appeal followed.
Standard of Review
Mobiloil’s traditional motion for summary judgment addressed its
breach of contract claim. The no-evidence section of its motion for
summary judgment addressed Mejia’s affirmative defenses and
counterclaims.
We apply a de novo standard to review rulings granting motions for
summary judgment. 3 When, as here, the trial court didn’t specify the
3Lightning Oil Co. v. Anadarko E&P Onshore, LLC, 520 S.W.3d 39,
45 (Tex. 2017).
10
exact basis for its ruling, we must affirm the “summary judgment if any
of the grounds asserted are meritorious.” 4 In our review, we are restricted
to considering the arguments the nonmovant presented to the trial court
in its written motion or response. 5
Mobiloil combined their traditional and no-evidence motions into a
single hybrid motion for summary judgment. 6 In one section of its hybrid
motion, Mobiloil asserted that Mejia could produce no evidence to support
his affirmative defenses of prior material breach and his claim that
Mobiloil failed to mitigate its damages. In another, it alleged Mejia could
produce no evidence to support his counterclaims alleging Mobiloil
breached the contract by modifying its terms, negligently failed to protect
the SUV, negligently entrusted the SUV to Safety Adjusters, or
negligently failed to act on his behalf to contact his GAP insurer since it
4Id.
5McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 343
(Tex. 1993).
6Motions for traditional summary judgment, filed under Rule
166a(a) or (b), may be combined with Rule 166a(i) no-evidence motions in
what are often called hybrid motions for summary judgment. Binur v.
Jacobo, 135 S.W.3d 646, 650-51 (Tex. 2004); see also City of Magnolia 4A
Econ. Dev. Corp. v. Smedley, 533 S.W.3d 297, 299 (Tex. 2017) (per
curiam).
11
was not Mejia’s agent and since the SUV was not damaged in a flood.
Mobiloil also alleged there was no evidence that it engaged in any unfair
debt collection practices by charging interest, a fee, a charge, or an
expense that was not authorized under the Retail Sales Contract.
In appeals from hybrid motions, we first decide whether the trial
court’s ruling on the no-evidence part of the hybrid motion may be
sustained before addressing the trial court’s ruling on the traditional
section of the motion. 7 In no-evidence motions, the motion must allege
that no evidence supports one or more of the essential elements of a
party’s defense. 8 Thus, the motion must state “the elements as to which
there is no evidence.” 9 When the motion contains the required no-
evidence allegations, the burden of proof shifts to the defendant to
produce evidence “raising an issue of material fact as to the elements
7Crescent Terminals, LLC v. Saybolt, LP, No. 09-16-00386-CV, 2018
Tex. App. LEXIS 1109, at *9 (Tex. App.—Beaumont Feb. 8, 2018, no pet.);
Flores v. City of Liberty, 318 S.W.3d 551, 553 (Tex. App.—Beaumont
2010, no pet.).
8Tex. R. Civ. P. 166a(i).
9Id.
12
specified in the motion.” 10 When deciding the no-evidence motion, the
trial court must grant the motion if
(a) there is a complete absence of evidence of a vital fact, (b)
the court is barred by rules of law or of evidence from giving
weight to the only evidence offered to prove a vital fact, (c) the
evidence offered to prove a vital fact is no more than a mere
scintilla, or (d) the evidence conclusively establishes the
opposite of the vital fact. 11
“A traditional motion for summary judgment requires the moving
party to show that no genuine issue of material fact exists and that it is
entitled to judgment as a matter of law.” 12 In reviewing summary-
judgment evidence, 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.” 13
Analysis
We begin with Mejia’s arguments challenging the trial court’s no-
evidence rulings. Under Rule 166a(i), the Rule of Procedure that applies
to no-evidence motions, a party may file a no-evidence motion for
10Mack Trucks v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006).
11King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003).
12City of Richardson v. Oncor Elec. Delivery Co. LLC, 539 S.W.3d
252, 258 (Tex. 2018); see also Tex. R. Civ. P. 166a(c).
13Hillis v. McCall, 602 S.W.3d 436, 440 (Tex. 2020) (cleaned up).
13
summary judgment after there has been “adequate time for
discovery[.]” 14 The record shows that when Mobiloil sued, it designated
the case as a Level 1 discovery case. 15 The case had been on file for over
eight months when Mobiloil filed its hybrid motion for summary
judgment. Because Mobiloil first served Mejia with discovery on April 14,
2020, the discovery period in the case ended on October 11, 2020. The
Clerk’s Record doesn’t show that Mejia filed a motion asking the trial
court to rule on Mobiloil’s objections or to compel Mobiloil to answer the
discovery that Mejia complains Mobiloil failed to answer.
When a party fails to produce evidence raising a fact issue on the
elements of the claims the opposing party challenged in a no-evidence
motion, the Rules of Procedure requires the trial court to “grant the
motion[.]” 16 Even though Mejia filed a response to Mobiloil’s hybrid
motion, he filed it less than seven days before the hearing and without
14Tex. R. Civ. P. 166a(i).
15See id. 190.2 (providing that in Level 1 discovery cases, the
discovery period “begins when the suit is filed and continues until 180
days after the date the first request for discovery of any kind is served on
a party”).
16Id. 166a(i).
14
leave of court. 17 As mentioned, Mejia filed his response to Mobiloil’s
hybrid motion just four days before the hearing. Nothing in the record
shows that Mejia obtained leave of court to file a late response to
Mobiloil’s hybrid motion. Furthermore, while the trial court’s judgment
reflects the court considered the evidence “supporting” Mobiloil’s motion,
the judgment is silent about whether the court considered the evidence
Mejia attached to his late-filed response. Given Mejia’s failure to obtain
the trial court’s permission to file a late response and the fact the record
does not show the trial court considered his late-filed response in ruling
on Mobiloil’s motion, we presume the trial court didn’t consider the
evidence Mejia attached to his response when it granted Mobiloil’s hybrid
motion and denied Mejia relief on his affirmative defenses and
counterclaims. 18 And since the trial court did not have to consider the
evidence Mejia attached to his late-filed response, the trial court did not
17Id.166a(c) (“Except on leave of court, the adverse party, not later
than seven days prior to the day of the hearing, may file and serve
opposing affidavits or other written response.”).
18See INA of Texas v. Bryant, 686 S.W.2d 614, 615 (Tex. 1985)
(where the summary-judgment response was untimely and nothing in
the record signified the late filing was with leave of court, “we must
presume that the trial court did not consider it”).
15
err in granting Mobiloil’s no-evidence part of Mobiloil’s motion because
Mejia produced no evidence to support his affirmative defenses or his
counterclaims. 19
Next, we turn to Mejia’s complaints about the trial court’s ruling
granting the traditional part of Mobiloil’s hybrid motion, which
addressed Mobiloil’s breach of contract claim. As to that part of Mobiloil’s
hybrid motion, Mejia argues that Kimler’s affidavit and the business
records she verified didn’t “conclusively establish that [he] breached the
contract.” Mejia also points to the statement in his unsworn declaration
stating he “made all payments required under the contract.” But not only
does the summary-judgment evidence show that Mejia’s unsworn
declaration is false, we must presume the trial court didn’t consider it for
the reasons already discussed. 20
Still, to affirm the judgment, we must explain why Mejia’s
argument claiming that Mobiloil’s evidence is insufficient to prove he
breached his promises under the Retail Sales Contract lacks merit. The
evidence before the trial court shows Mejia failed to make each of the
19Tex. R. Civ. P. 166a(i).
20Id. 166a(c).
16
installment payments when they were due. There is no evidence that
contradicts Mobiloil’s evidence showing that some of Mejia’s payments,
including his June 2019 payment, were late. The evidence also shows
Mejia was behind on his payments when Mobiloil declared the loan in
default and accelerated the loan. The statements in Kimler’s affidavit are
supported by the business records that Mobiloil maintained on Mejia’s
loan. Mejia didn’t present any evidence to create a fact issue to show that
he was not in default when Mobiloil accelerated the loan. Mobiloil’s
business records show Mejia failed to make each scheduled payment on
time and in the amount called for in the payment schedule on his loan,
including the June 22nd payment Kimler identified in her affidavit. We
conclude Mobiloil met its summary-judgment burden to prove that Mejia
breached the payment promises he made on his loan, promises that were
material to his right to prevent Mobiloil from declaring the loan in default
and from accelerating the debt on the loan.
Mejia raises no other arguments claiming Mobiloil didn’t prove its
breach of contract claim. For example, he doesn’t complain the Mobiloil’s
proof isn’t sufficient to prove the contract damages Mobiloil suffered
under the contract were $13,772, nor does he challenge the trial court’s
17
awards for prejudgment interest, for the attorney’s fees for the trial
($7,500), or for the attorney’s fees for the appeal ($7,500).
Mejia’s last argument supporting his first issue complains the trial
court abused its discretion in denying his request for more time to
conduct discovery. Mejia suggests he needed more time to investigate the
claims and defenses he raised in his pleadings. But Mejia’s request for
more time is in his late-filed response to Mobiloil’s hybrid motion. We
have already explained why the trial court was not required to consider
his late-filed response.
But we recognize that in August 2020, in responding to a motion for
summary judgment that Mobiloil never set for hearing and later
abandoned, Mejia complained that Mobiloil had lodged objections to his
discovery requests and had not answered his discovery. Still, all Mejia
did in responding to Mobiloil’s earlier motion for summary judgment was
complain he didn’t have the answers he needed to respond to the initial
motion for summary judgment that Mobiloil filed in August 2020, a
motion it later abandoned by amending. For instance, Mejia neither
asked the trial court to compel Mobiloil to answer his discovery in his
response, nor did he file a motion to compel and ask the court to compel
18
Mobiloil to rule on Mobiloil’s objections and answer his discovery. In
December 2020, Mobiloil abandoned its earlier motion for summary
judgment by filing the hybrid motion for summary judgment, which is
the motion at issue in this appeal.
As to the GAP policy Mejia purchased, it seems unlikely to us that
the discovery of a GAP policy would have led to relevant evidence
anyway, since “GAP Insurance is insurance to reimburse the retail buyer
for the amount computed by subtracting the proceeds of the insured’s
basic collision policy on the motor vehicle from the amount owed on the
vehicle if the vehicle has been rendered a total loss.” 21 The evidence
shows the sale of the SUV covered a substantial portion of the unpaid
balance Mejia owed on his loan. He also never alleged or argued the
damages from the flood resulted in the SUV suffering a total loss. Finally,
the discovery period for this Level 1 case ended in October 2020, so by
January 2021 when the trial court conducted the hearing on Mobiloil’s
hybrid motion, the discovery period had ended.
21Riversv. Charlie Thomas Ford, Ltd., 289 S.W.3d 353, 355 fn 1
(Tex. App.—Houston [14th Dist.] 2009, no pet.) (citing Tex. Fin. Code
Ann. § 348.208(b)(4)).
19
“When a party contends that it has not had an adequate
opportunity for discovery before a summary judgment hearing, it must
file either an affidavit explaining the need for further discovery or a
verified motion for continuance.” 22 The record does not show that Mejia
filed a motion to continue the January 2021 hearing the trial court held
on Mobiloil’s hybrid motion for summary judgment. So not only did Mejia
fail to exercise diligence in seeking to obtain the discovery he claims he
needed, he also didn’t follow the requirements of the Rules of Civil
Procedure by filing a verified motion for continuance or an affidavit
explaining why he needed a continuance of the hearing. 23
In Mejia’s second issue, he argues the trial court erred in overruling
his objections to the affidavit of Lawrence Ray, the president of Safety
Adjusters. Mejia raised these objections in his late-filed response.
Because the record doesn’t affirmatively show the trial court considered
the late-filed response, we must presume it did not. Besides, the only
matter Ray addressed in his affidavit was whether Mejia’s SUV had been
22Tenneco Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 647 (Tex. 1996);
see also Tex. R. Civ. P. 166a(g), 251, 252.
23Tex. R. Civ. P. 251.
20
damaged by water while on Safety Adjusters’ lot. And since Mejia’s only
evidence supporting that claim is his unsworn declaration, which he filed
with a response the trial court didn’t consider, Ray’s affidavit is
irrelevant to the facts on which the judgment is based.
Conclusion
Having addressed why Mejia’s arguments challenging the trial
court’s rulings lack merit, we overrule Mejia’s issues. For the reasons
explained above, the trial court’s judgment is
AFFIRMED.
_________________________
HOLLIS HORTON
Justice
Submitted on September 14, 2022
Opinion Delivered March 23, 2023
Before Golemon, C.J., Horton and Johnson, JJ.
21