Opinion
No. 11-18-00196-CV
07-16-2020
BRYAN SCHROTH AND ELIZABETH SCHROTH, Appellants v. ARMC, L.P. D/B/A ABILENE REGIONAL MEDICAL CENTER, Appellee
On Appeal from the County Court at Law No. 2 Taylor County, Texas
Trial Court Cause No. 6446
MEMORANDUM OPINION
This is a restricted appeal from a no-answer default judgment rendered against Appellants, Bryan and Elizabeth Schroth, in a suit on a sworn account. In a single issue, Appellants contend that the trial court erred in granting a default judgment in favor of Appellee, ARMC, L.P. d/b/a Abilene Regional Medical Center. Because no error is apparent on the face of the record, we affirm.
Background Facts
ARMC filed suit in 2017 against Appellants to collect on an outstanding account for medical services rendered to a member of Appellants' family. ARMC alleged an unpaid balance of $14,271.18. ARMC asserted a suit on a sworn account and causes of action for account stated, breach of contract, and quantum meruit. ARMC's petition included requests for admissions. Appellants were served with the petition but did not answer or otherwise respond.
On April 4, 2018, ARMC filed a Motion for Entry of Default Judgment. The trial court subsequently entered a default judgment in favor of ARMC. The trial court awarded ARMC all of its requested relief, including the balance of the unpaid account as actual damages in the amount of $14,271.18, and other miscellaneous fees and costs, including attorney's fees of $2,750 as well as conditional attorney's fees in the event of an appeal.
Appellants did not timely file a notice of appeal. They subsequently filed a Notice of Restricted Appeal. Appellants alleged in the notice that they did not participate in the proceedings prior to the entry of the default judgment.
Analysis
In a single issue, Appellants contend that there is "clear" error on the face of the record on all of ARMC's causes of action. Appellants contend that the "paltry evidence adduced by ARMC is legally insufficient to support any of its causes of action."
A restricted appeal is a direct attack on a default judgment. TEX. R. APP. P. 30; Whitaker v. Rose, 218 S.W.3d 216, 219 (Tex. App.—Houston [14th Dist.] 2007, no pet.). An appellant bringing a restricted appeal can prevail only if (1) he filed notice of the restricted appeal within six months after the judgment was signed, (2) he was a party to the underlying lawsuit, (3) he did not participate in the hearing that resulted in the judgment complained of and did not timely file any postjudgment motions or requests for findings of fact and conclusions of law, and (4) error is apparent on the face of the record. Ins. Co. of Pa. v. Lejeune, 297 S.W.3d 254, 255 (Tex. 2009) (per curiam); Alexander v. Lynda's Boutique, 134 S.W.3d 845, 848 (Tex. 2004) (citing TEX. R. APP. P. 26.1(c), 30).
The only issue in this case is whether error is apparent on the face of the record. In a restricted appeal, the reviewable record consists of all papers on file before the judgment, including any reporter's records. Norman Commc'ns v. Tex. Eastman Co., 955 S.W.2d 269, 270 (Tex. 1997); O'Neal v. O'Neal, 69 S.W.3d 347, 348 (Tex. App.—Eastland 2002, no pet.). We note that there is no reporter's record in this case.
Because this is an appeal from a no-answer default judgment arising from a suit on a sworn account, there are additional limitations on the scope of our review. Appellants' failure to file an answer operates as an admission of the material facts alleged in the petition, except as to unliquidated damages. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex. 1992). Thus, if the facts set out in the petition allege a cause of action, a default judgment conclusively establishes the defendant's liability. Morgan v. Compugraphic Corp., 675 S.W.2d 729, 731 (Tex. 1984). Consequently, the defendant against whom a no-answer default judgment is rendered is precluded from challenging the sufficiency of the evidence supporting his liability. See Heine, 835 S.W.2d at 83; Morgan, 675 S.W.2d at 731; Texaco, Inc. v. Phan, 137 S.W.3d 763, 770 (Tex. App.—Houston [1st Dist.] 2004, no pet.).
If a claim involves liquidated damages, however, a trial court can render a default judgment without receiving evidence of damages if it can verify the damages by referring to the allegations in the petition and the written instruments. See TEX. R. CIV. P. 241; BLS Limousine Serv., Inc. v. Buslease, Inc., 680 S.W.2d 543, 547 (Tex. App.—Dallas 1984, writ ref'd n.r.e.). Thus, in cases involving liquidated damages, the trial court does not have to hear evidence as to damages, and an appellant may not challenge the legal or factual sufficiency of the evidence to support these liquidated damages. See TEX. R. CIV. P. 241, 243; see also McCluskey v. State, 64 S.W.3d 621, 624 (Tex. App.—Houston [1st Dist.] 2001, no pet.) (refusing to address the appellant's sufficiency challenges when damages were liquidated).
A suit on a sworn account is not an independent cause of action. Rizk v. Fin. Guardian Ins. Agency, Inc., 584 S.W.2d 860, 862 (Tex. 1979); S. Mgmt. Servs., Inc. v. SM Energy Co., 398 S.W.3d 350, 353 (Tex. App.—Houston [14th Dist.] 2013, no pet.). Rather, it is based on Rule 185 of the Texas Rules of Civil Procedure, which affords a procedural right of recovery in certain contract disputes. TEX. R. CIV. P. 185; S. Mgmt. Servs., 398 S.W.3d at 353. Rule 185 provides that, when a claim is based on an open account "on which a systematic record has been kept," the account "shall be taken as prima facie evidence" of the claim if it is supported by affidavit. TEX. R. CIV. P. 185; see also Schum v. Munck Wilson Mandala, LLP, 497 S.W.3d 121, 124 (Tex. App.—Texarkana 2016, no pet.). The affidavit must be "to the effect that such claim is, within the knowledge of affiant, just and true, that it is due, and that all just and lawful offsets, payments and credits have been allowed." TEX. R. CIV. P. 185. A plaintiff who meets all the requirements of Rule 185 is entitled to summary disposition of the case without formally introducing the account as evidence of the debt. Woodhaven Partners, Ltd. v. Shamoun & Norman, L.L.P., 422 S.W.3d 821, 833 (Tex. App.—Dallas 2014, no pet.); S. Mgmt. Servs., 398 S.W.3d at 354.
A defendant may destroy this evidentiary presumption by filing a sworn denial of the plaintiff's claim supported by an affidavit in which the defendant denies the account as required by Rule 93(10). Woodhaven Partners, 422 S.W.3d at 833; see also TEX. R. CIV. P. 93(10), 185. If a defendant properly denies the account, the plaintiff is forced to introduce proof of its claim. Woodhaven Partners, 422 S.W.3d at 833. However, a defendant who fails to properly file a written denial under oath will not be permitted to dispute either the receipt of the services or the correctness of the charges. Id. (citing Andrews v. E. Tex. Med. Ctr.-Athens, 885 S.W.2d 264, 267 (Tex. App.—Tyler 1994, no writ)); see also TEX. R. CIV. P. 185.
Appellants are essentially asserting that ARMC's sworn account is deficient because the documentation supporting the charges does not sufficiently itemize the goods or services provided to them. In this regard, the affidavit attached to ARMC's petition stated in relevant part as follows:
1. My full name is Jacquelyn Roland. I am over 18 years of age. I am fully competent to make this affidavit.
2. I am an authorized agent for ARMC, L.P. d/b/a Abilene Regional Medical Center as Jacquelyn Roland, and I have care, custody and control of the records concerning this account and am competent to testify to the matters contained herein against Defendant(s) BRYAN SCHROTH and ELIZABETH SCHROTH.
3. I hereby aver that the claim attached as Exhibit A is within the personal knowledge of the affiant, is just and true, and is due by Defendant to Plaintiff and that all just and lawful offsets, payments, and credits to this account have been allowed.
4. The records show that a total principal balance of $14271.18, exclusive of interest, is due and payable by Defendant(s) BRYAN SCHROTH and ELIZABETH SCHROTH, to Plaintiff ARMC, L.P. d/b/a Abilene Regional Medical Center.
| 1358159 | 07/30/14 |
5. Demand for payment of the just amount owing Plaintiff by Defendant(s) has been made more than thirty (30) days prior hereto and payment for the just amount owing has not been tendered.
Based on a page attached to the affidavit, "1358159" was the account number, "07/30/14" was the date of service, and "14271.18" was the balance due.
We disagree with Appellants' analysis. The prior version of Rule 185 required a sworn account to show with reasonable certainty the nature of each item sold, the date of each sale, and the charges therefor. Enernational Corp. v. Exploitation Eng'rs., Inc., 705 S.W.2d 749, 750 (Tex. App.—Houston [1st Dist.] 1986, writ ref'd n.r.e.) (citing Lotex Trading Corp. v. Pan Am. Prod. Corp., 650 S.W.2d 475, 475-76 (Tex. App.—Houston [14th Dist.] 1983, no writ)). As a result of an amendment to Rule 185 in the 1980s, however, the requirement of particularity in the component parts of a sworn account is now a matter of pleadings. Id. Rule 185 specifically provides that "[n]o particularization or description of the nature of the component parts of the account or claim is necessary unless the trial court sustains special exceptions to the pleadings." TEX. R. CIV. P. 185. Accordingly, if a defendant seeks more particularity concerning the component parts of a sworn account, he must file special exceptions. See Enernational Corp., 705 S.W.2d at 751.
In light of the foregoing authority, we must determine if the face of the record reveals that there is a deficiency in ARMC's pleading of the sworn account under the requirements of Rule 185. See id. at 750. Rule 185 provides that, when an action is founded on an open account on which a systematic record has been kept and is supported by an affidavit, the account shall be taken as prima facie evidence of the claim. See Panditi v. Apostle, 180 S.W.3d 924, 926 (Tex. App.—Dallas 2006, no pet.). ARMC alleged in its petition that its action arose from an account upon which a systematic record had been kept; that it was an account concerning "certain goods, wares and merchandise and/or personal services," which ARMC sold or delivered to Appellants at their request; and that all just and lawful offsets, payments, and credits had been allowed. Additionally, ARMC supported this pleading with Roland's affidavit that met the requirements of Rule 185.
We conclude that ARMC adequately pleaded a suit on a sworn account under the requirements of Rule 185. Simply put, ARMC's petition and the supporting affidavit recited the required language of Rule 185. Even though ARMC's statement of the details of the account was minimal, Rule 185 expressly provides that no particularization or description of the nature of the component parts of the account or claims is necessary absent special exceptions being sustained by the trial court. Thus, Appellants were required by Rule 185 to file a sworn written denial in order to contest the sworn account. See Solano v. Syndicated Office Sys., 225 S.W.3d 64, 67 (Tex. App.—El Paso 2005, no pet.); Enernational Corp., 705 S.W.2d at 750.
Because ARMC sufficiently pleaded a suit on a sworn account and Appellants failed to file a verified denial, ARMC's petition and affidavit constituted prima facie evidence of the claim. See Solano, 225 S.W.3d at 67. Thus, ARMC was entitled to judgment on its pleadings as a matter of law. See S. Mgmt. Servs., 398 S.W.3d at 355-56. Accordingly, there is no error on the face of the record concerning ARMC's suit on a sworn account. In light of our holding, we do not reach Appellants' contentions concerning ARMC's other causes of action. See TEX. R. APP. P. 47.1. We overrule Appellants' sole issue on appeal.
This Court's Ruling
We affirm the judgment of the trial court.
JOHN M. BAILEY
CHIEF JUSTICE July 16, 2020 Panel consists of: Bailey, C.J.,
Stretcher, J., and Wright, S.C.J. Willson, J., not participating.
Jim R. Wright, Senior Chief Justice (Retired), Court of Appeals, 11th District of Texas at Eastland, sitting by assignment.