Peggy S. McElroy v. Unifund CCR Partners Assignee of America Online - Platinum

Affirmed and Memorandum Opinion filed August 26, 2008 Affirmed and Memorandum Opinion filed August 26, 2008. In The Fourteenth Court of Appeals ____________ NO. 14-07-00661-CV ____________ PEGGY C. McELROY, Appellant V. UNIFUND CCR PARTNERS, ASSIGNEE OF AMERICA ONLINE-PLATINUM, Appellee On Appeal from the County Civil Court at Law No. 4 Harris County, Texas Trial Court Cause No. 849485 M E M O R A N D U M   O P I N I O N Peggy C. McElroy appeals a judgment in favor of Unifund CCR Partners for unpaid credit card debt on grounds that (1) Unifund_s business records were improperly admitted into evidence based on an affidavit from a Adesignated agent@ rather than a custodian of records; (2) certain Unifund business records admitted into evidence contained hearsay within hearsay; (3) Unifund failed to establish the existence of a contract with McElroy; and (4) Unifund failed to establish viable claims for breach of contract or quantum meruit. We affirm. Background Unifund CCR Partners sued Peggy C. McElroy to recover unpaid debt on a credit card account. The account was originally issued under the creditor name AMERICA ONLINE-PLATINUM and later acquired by Unifund by assignment. Unifund pleaded both breach of contract and quantum meruit. The lawsuit was tried to the court on July 5, 2007. Unifund called no witnesses during the trial on the merits, relying exclusively upon evidence contained within business records provided by Unifund and its assignors to establish McElroy_s liability. As admitted, these records included a proffering affidavit signed by Unifund employee Angela Freckman; a signature card for the account; an affidavit signed by Robert Watson, an employee of the assignor of the account; and more than a dozen monthly account statements. The trial court signed a judgment in favor of Unifund for $15,114.66, plus interest and reasonable statutory attorneys fees. McElroy did not request findings of fact or conclusions of law. McElroy timely appealed. Analysis Admission of Business Records by ADesignated Agent_s@ Affidavit In her first issue, McElroy contends that the trial court erred in admitting Unifund_s business records into evidence at trial over her hearsay objection. We review a trial court_s decision to admit or exclude evidence for an abuse of discretion. In re J.P.B., 180 S.W.3d 570, 575 (Tex. 2005). A trial court abuses its discretion if its decision is arbitrary, unreasonable, and without reference to guiding principles. See Owens‑Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998). An appellate court must uphold the trial court=s evidentiary ruling if there is any legitimate basis for the ruling. Id. Moreover, we will not reverse a trial court for an erroneous evidentiary ruling unless the error probably caused the rendition of an improper judgment. Id.; see also Tex. R. App. P. 44.1. At trial, Unifund offered for admission selected business records including a proffering affidavit; McElroy_s signature card for the account; an affidavit from Chase Bank, USA employee Robert Watson describing the assignment of McElroy_s account to Unifund and the account status when assigned; 13 monthly statements; and an account statement created by Unifund. McElroy objected to admission of these records as hearsay, but the trial court admitted them under the business records exception to the hearsay rule. See Tex. R. Evid. 803(6). Specifically, McElroy objects on appeal to the affidavit by which Unifund sought to authenticate its business records under the hearsay exception. See Tex. R. Evid. 902(10). McElroy argues that the affidavit was insufficient under Rule 902(10) because the affiant, Unifund employee Angela Freckman, identified herself as the Adesignated agent@ of Unifund rather than the Acustodian of records.@ McElroy further asserts that Freckman lacked personal knowledge of the account as required under Rule 803(6). McElroy argues Freckman was not competent to lay the proper foundation required under Rule 902(10) for the business records to qualify under the Rule 803(6) exception to the hearsay rule. We reject these contentions. A_Hearsay_ is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.@ Tex. R. Evid. 801(d). The proponent of hearsay has the burden of showing that the testimony fits within an exception to the general rule prohibiting the admission of hearsay evidence. Volkswagen of Am., Inc. v. Ramirez, 159 S.W.3d 897, 908 n. 5 (Tex. 2004). The business records exception provides that evidence meeting certain criteria should not be excluded under the hearsay rule. See Tex. R. Evid. 803(6). The exception has four requirements: (1) the records were made and kept in the course of a regularly conducted business activity; (2) it was the regular practice of the business activity to make the records; (3) the records were made at or near the time of the event that they record; and (4) the records were made by a person with knowledge who was acting in the regular course of business. In re E.A.K., 192 S.W.3d 133, 141 (Tex. App._Houston [14th Dist.] 2006, pet. denied). These requirements may be demonstrated at trial through an accompanying affidavit. See Tex. R. Evid. 902(10). The authenticating affiant need not be a Acustodian of records@ to qualify. See Tex. R. Evid. 902(10). The prerequisites of Rule 803(6) may be established by a Aqualified witness.@ Houston Shell & Concrete Co. v. Kingsley Constructors, Inc., 987 S.W.2d 184, 186 (Tex. App._Houston [14th Dist.] 1999, no pet.); see also Tex. R. Evid. 803(6). ARule 803(6) does not require a witness laying the predicate for introduction of a business record to be the creator of the document or even an employee of the company keeping the subject record.@ In re E.A.K., 192 S.W.3d at 142; see also Tex. R. Evid. 803(6). An affiant may qualify as an Aother qualified witness@ by demonstrating personal knowledge of the facts contained within a business record. See Houston Shell & Concrete Co., 987 S.W.2d at 186. Freckman satisfied this standard because her affidavit stated that she was the designated agent of Unifund, and that she had personal knowledge of the account in question. Further, Freckman_s affidavit tracked the model language of a self-authenticating affidavit because it described the creation, collection and management of the records. See Tex. R. Evid. 902(10)(b). McElroy also argues that Freckman=s affidavit is conclusory because it fails to establish the basis for Freckman=s personal knowledge of the facts to which she testifies. However, this argument is without merit. See Gellatly v. Unifund CCR Partners, No. 01‑07‑00552‑CV, 2008 WL 2611894, at *5 (Tex. App.CHouston [1st Dist.] July 3, 2008, no pet.) (mem. op., not designated for publication) (an affidavit reciting business records requirements is not impermissibly conclusory). Because this affidavit substantially complies with the language of Rule 902(10)(b), it properly authenticates the business records at issue. See Luxama v. State, No. 14-04-00674-CR, 2006 WL 1148483, at *10 (Tex. App._Houston [14th Dist.] February 14, 2006, pet ref_d) (mem. op., not designated for publication) (trial court did not abuse its discretion when admitting business records accompanied by affidavit tracking the form provided by Rule 902(10)); Jones v. N. Woodland Hills Vill. Cmty. Ass=n, No. B14‑93‑00545‑CV, 1994 WL 388298, at *5 (Tex. App._Houston [14th Dist.] July 28, 1994, writ denied) (not designated for publication) (affidavit containing only factual statements and substantially complying with Rule 902(10)(b) model affidavit was sufficient to support admission of document); see also Capers v. Citibank (South Dakota), N.A., No. 05-05-01230-CV, 2006 WL 3020419, at *3 (Tex. App._Dallas October 25, 2006, no pet.) (mem. op., not designated for publication) (affidavit offered to authenticate business records was not facially defective, without merit, or lacking foundation because it substantially complied with Rule 902(10)). McElroy further argues on appeal that Freckman_s assertions of personal knowledge cannot apply to records created by the assignors of the account in question. An objection must be specific. McCormick v. Tex. Commerce Bank, 751 S.W.2d 887, 890 (Tex. App._Houston [14th Dist.] 1988, writ denied); see also Tex. R. Evid. 103(a)(1); Tex. R. App. P. 33.1(a)(1)(A). An objection must identify the legal principle the court will violate if it admits the evidence when that is not apparent from the context. United Cab Co. v. Mason, 775 S.W.2d 783, 785 (Tex. App._Houston [1st Dist.] 1989, writ denied); see also Tex. R. Evid. 103(a)(1). At trial, McElroy objected only to Freckman_s use of the phrase Adesignated agent.@ Because McElroy=s objection regarding personal knowledge was not raised at trial, we do not consider it on appeal. Under these circumstances, the trial court acted within its discretion in admitting Unifund_s business records. See Owens‑Corning Fiberglas Corp., 972 S.W.2d at 43. McElroy_s first issue is overruled. We need not address the trial court=s admission of Watson=s affidavit, the subject of McElroy=s second issue, because it is not necessary to determine the outcome of this case. McElroy assails Watson=s affidavit as containing hearsay within hearsay while lacking sufficient personal knowledge to qualify for an exception to the hearsay rule. But even if we disregard Watson=s affidavit, the unobjected-to portions of Freckman=s affidavit establish the existence of the account assignment and the validity of the supporting records. Any asserted error in admitting Watson=s affidavit was harmless. See Tex. R. App. Proc. 44.1(a). Existence of Contract In her third issue, McElroy contends that Unifund failed to demonstrate the existence of a contract. We construe this as a challenge to the legal sufficiency of the evidence to support Unifund=s breach of contract claim. When neither party requests findings of fact and conclusions of law, all fact findings necessary to support the trial court=s judgment are implied. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002); Sixth RMA Partners, L.P. v. Sibley, 111 S.W.3d 46, 52 (Tex. 2003). However, when the appellate record includes the reporter_s and clerk_s records, implied findings of fact may be challenged based on legal sufficiency. Sixth RMA Partners, L.P., 111 S.W.3d at 52. In reviewing a legal sufficiency point, we view the evidence in a light that tends to support the finding of the disputed fact and disregard all evidence and inferences to the contrary. Id. To recover in a breach of contract case, Unifund must prove that (1) a valid contract existed; (2) Unifund performed or tendered performance; (3) McElroy breached the contract; and (4) Unifund was damaged as a result of McElroy=s breach. See Mays v. Pierce, 203 S.W.3d 564, 575 (Tex. App._Houston [14th Dist.] 2006, pet. denied). Parties form a binding contract when the following elements are present: (1) an offer; (2) an acceptance in strict compliance with the terms of the offer; (3) meeting of the minds; (4) each party_s consent to the terms; and (5) execution and delivery of the contract with the intent that it be mutual and binding. Wal‑Mart Stores, Inc. v. Lopez, 93 S.W.3d 548, 555-56 (Tex. App._Houston [14th Dist.] 2002, no pet.). To be enforceable, a contract must be sufficiently certain to enable a court to determine the rights and responsibilities of the parties. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex.1992). The material terms of a contract must be agreed upon before a court can enforce the contract. Id. An applicable interest rate is a _material term._ See id. At trial, Unifund did not proffer the actual agreement between the cardholder and the issuer, or any other document that established agreed terms for the applicable interest rate or the method of determining finance charges. Unifund_s business records reflected statements sent to McElroy, purchases made against the account, and payments made. In its brief, Unifund argues that this evidence establishes the existence of a contract as a matter of law. However, nowhere in Unifund_s evidence is there an express written agreement describing the definite, agreed terms between McElroy and AMERICA ONLINE-PLATINUM. Unifund_s business records include a copy of a signature card signed by McElroy, but this document does not contain the missing contractual terms. The record contains the previously described affidavits, monthly statements related to the account, and the signature card. There is no cardholder=s agreement or other document expressly describing the terms of the account, nor is there any discernable demonstration of McElroy=s intent to be bound by a specific agreement. The account statements show widely varying interest rates. In Williams v. Unifund CCR Partners Assignee of Citibank, No. 01-06-00927, 2008 WL 339855 (Tex. App._Houston [1st Dist.] February 7, 2008, no pet.), the First Court of Appeals held that a creditor failed to establish the existence of a contract when it failed to produce Athe actual agreement or any other document that established the agreed terms, including the applicable interest rate or the method for determining the applicability and amount of finance charges.@ Id. at *4. By contrast, in Winchek v. Am. Express Travel Related Svcs. Co., 232 S.W.3d 197 (Tex. App._Houston [1st Dist.] 2007, no pet.), the First Court of Appeals held that the creditor had met its burden to establish a contract. Id. at 204. In that case, the creditor admitted into evidence both a copy of the creditor=s APersonal Card Member Agreement@and an affidavit from the creditor=s Manager of Credit Operations stating, [a]t all relevant times, Winchek was the holder of an American Express Personal Card (AThe Personal Card@) that enabled her to charge items to an American Express Card Account@ and that A[b]y accepting and using the Personal Card, Winchek agreed to all of the terms and conditions set forth in the Personal Card Member Agreement. Id. at 202-203. Because the APersonal Card Member Agreement@ expressly stated that retention or use of the card demonstrated the cardholder=s agreement to the terms of the APersonal Card Member Agreement,@ the Court found that the cardholder=s demonstrated use of the card Amanifested her intent that the contract become effective.@ Id. at 204. The evidence relied upon in Winchek is absent in this case. The circumstances here parallel those in Williams. While we are obliged to Aview the evidence in a light that tends to support the finding of the disputed fact and disregard all evidence and inferences to the contrary,@ there is no evidence in this case to demonstrate the specific terms of the contract between McElroy and Unifund. See Williams, 2008 WL 339855, at *4; see also T.O. Stanley Boot Co., 847 S.W.2d at 221. That does not end the analysis, however, because there is a potential alternative ground upon which the trial court=s judgment could be based. We turn next to the alternative quantum meruit basis for recovery. Quantum Meruit Claim In her fourth issue, McElroy asserts that Unifund failed to establish its right to recover on a claim of either breach of contract or quantum meruit. Having addressed the breach of contract claim in answering McElroy_s third issue, we construe this as a challenge to the legal sufficiency of the evidence to support Unifund_s quantum meruit claim. Quantum meruit is an equitable remedy independent of a particular contract. Vortt Exploration Co., v. Chevron U.S.A., 787 S.W.2d 942, 944 (Tex. 1990). This theory rests on an implied agreement to pay for benefits received. Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex.1992). To recover under quantum meruit, Unifund must prove that (1) valuable services were rendered or materials furnished; (2) to McElroy; (3) which McElroy accepted, used and enjoyed; (4) under such circumstances as reasonably notified her that Unifund (by assignment), in performing, expected to be paid by defendant. See Vortt Exploration Co., Inc., 787 S.W.2d at 944; Heldenfels Bros., Inc., 832 S.W.2d at 41. A party may recover under quantum meruit only when there is no express contract covering the services or materials furnished. Vortt Exploration Co., 787 S.W.2d at 944. Unifund_s business records demonstrate that AMERICA ONLINE-PLATINUM rendered a service to McElroy by the extension of a consumer credit card account. McElroy did not dispute the existence or use of this account at trial, and does not do so on appeal. We may rely on McElroy=s admissions submitted to the trial court as part of Unifund=s motion for summary judgment. See Joyner v. Alban Group, Inc., 541 S.W.2d 292, 293 (Tex. Civ. App._Houston [1st Dist.] 1976, no writ) (admissions made by parties in response to request for admissions and filed among papers in the case need not be introduced in evidence to be properly before trial court for consideration); Red Ball Motor Freight, Inc. v. Dean, 549 S.W.2d 41, 43 (Tex. Civ. App._Tyler 1977, writ dism=d w.o.j.). McElroy=s admissions establish that she applied for the credit card account; she received monthly statements showing the amount of charges or cash advanced on the account; the monthly statements Aspecifically advised@ her of the right to dispute any error contained within the statements; and she failed to pay amounts owed on the account. The monthly statements demonstrate that credit was extended for more than one year. Unifund_s business records substantiate the chain of assignment of the account from Chase Bank, USA to Unifund. The statements demonstrate that McElroy made at least 12 payments against her account balance while continuing to purchase goods and services using the account over a 12-month period. The business records also contain a Unifund statement showing $15,114.66 due _ the same amount awarded by the trial court as damages. This evidence supports the trial court_s judgment in favor of Unifund on the basis of a quantum meruit claim against McElroy. See Heldenfels Bros., Inc., 832 S.W.2d at 41; see also 2616 S. Loop L.L.C. v. Health Source Home Care, Inc., 201 S.W.3d 349, 360 (Tex. App._Houston [14th Dist.] 2006, no pet.) (quantum meruit was proper claim for recovery in case where tenants received and accepted the use of property and received written demands for payment of market rental rates in return); Coastal Chem, Inc. v. Brown, 35 S.W.3d 90, 101 (Tex. App._Houston [14th Dist.] 2000, pet. denied) (quantum meruit was a proper remedy for the reasonable value of services rendered and accepted when not covered by an existing contract). The trial court awarded $ 5,038.22 to Unifund for reasonable statutory attorney=s fees. Because Unifund=s valid quantum meruit claim is based on the rendition of services to McElroy, we affirm the award of statutory attorney=s fees in this case. See Tex. Civ. Prac. & Rem. Code Ann. _ 38.001(1) (Vernon 2008); Tuberquia v. Jamison & Harris, No. A14-91-00055-CV, 1991 WL 260344, at *2 (Tex. App._Houston [14th Dist.] December 12, 1991, no writ) (not designated for publication) (recovery of statutory attorney=s fees was proper under either breach of contract or quantum meruit in suit to recover unpaid fees for services rendered); Rainbow Group, Ltd. v. Johnson, No. 03-00-00559-CV, 2002 WL 1991141, at * 9-10 (Tex. App._Austin August 30, 2002, pet. denied) (not designated for publication) (chapter 38 allows the recovery of attorney=s fees under quantum meruit based on an employee=s act of making their services available according to an employer=s request). McElroy=s fourth issue is overruled. Conclusion We affirm the trial court_s judgment. /s/ William J. Boyce Justice Judgment rendered and Memorandum Opinion filed August 26, 2008. Panel consists of Chief Justice Hedges and Justices Anderson and Boyce.