Wednesday, December 19, 2007

Drafting error excused in indemnity contract

Court of Appeals remands case to district court with instruction to grant reformation remedy to correct "scrivener's" error.

Holding: Reformation is a proper remedy when the parties have reached a definite and explicit agreement, understood in the same sense by both, but, by their mutual or common mistake, the written contract fails to express this agreement. Champlin Oil & Ref. Co. v. Chastain, 403 S.W.2d 376, 377 (Tex. 1965). Because the agreement embodies the parties’ intent to apply the express negligence doctrine, but, due to a scrivener’s error, leaves out a few words in the indemnity trigger, the matter must be remanded to the trial court to reform the written contract to conform to the terms of the agreement.

We reverse the trial court’s judgment and remand the cause for the trial court to reform the indemnity trigger in the agreement.

Reece-Albert v. Contractor's Service Co. (Tex.App.- Houston [1st Dist.] Dec. 13, 2007)(Hanks)

In this contractual indemnity case, Reece Albert, Inc. (“Reece”) and Contractor’s Service Company (“CSC”) filed cross-motions for summary judgment. In two issues, Reece appeals the trial court’s grant of CSC’s motion and contends that (1) the trial court erred in ruling that the parties’ indemnity agreement is ambiguous, and, thus, unenforceable, and (2) the words omitted from the “trigger” portion of the indemnity agreement were the result of a scrivener’s error, which can be corrected through the doctrine of reformation. We reverse.

Reece-Albert v. Contractor's Service Co. (Tex.App.- Houston [1st Dist.] Dec. 13, 2007)(Hanks) (indemnity, reformation of contract, mutual mistake)
REVERSE TC JUDGMENT AND REMAND CASE TO TC FOR FURTHER PROCEEDINGS:
Opinion by Justice George C. Hanks, Jr.
Before Justices Taft, Hanks and Higley01-06-00700-CV
Reece-Albert, Inc. v. Contractor's Service Company, Contractor's Service, Ltd., and Contractor's Service, Ltd. f/k/a Contractor's Service Company
Appeal from 133rd District Court of Harris County (Hon. Lamar McCorkle)

Mailbox Rule applied to summary judgment response, but evidence of date of mailing attached to brief on appeal was too late

In the absence of a timely response, no-evidence summary judgment was properly granted by default. Court of Appeals also affirms denial of motion for continuance because diligence in conducting discovery prior to summary judgment hearing was not shown.

Landers v. State Farm Lloyd, No. 06-00181-CV (Tex.App. - Houston [1st Dist.] Dec. 13, 2007)(Hanks) (insurance coverage, home owner's insurance, plumbing leak, water damage to home, expert exclusion, MSJ, MFC)
Before Justices Taft, Hanks and Higley01-06-00181-CV E. Dean Landers and Margaret F. Landers v. State Farm Lloyds and Reuben Quintero
Appeal from 280th District Court of Harris County (
Hon. Tony Lindsay)
Disposition: Affirm trial court's no-evidence summary judgment for insurer

O P I N I O N

In this insurance coverage case, the trial court granted State Farm Lloyds’s (“State Farm”) motion to exclude E. Dean and Margaret F. Landers’ (“the Landerses”) experts and then granted State Farm’s no-evidence motions for summary judgment. On appeal, the Landerses contend that the trial court erred (1) in granting the motions for summary judgment because there are genuine issues of material fact, (2) in allowing State Farm’s expert to give new opinions and calculations at the Daubert/Robinson See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 113 S. Ct. 2786 (1993); E.I.du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549 (Tex. 1995) (requiring trialjudges to scrutinize evidence for reliability). hearings that had not been timely supplemented and disclosed before the hearings, (3) in striking the Landerses’ experts from testifying at trial, and (4) in not granting the Landerses’ request for a continuance of the hearing on the motions for summary judgment. We affirm.

Procedural and Factual Background

The Landerses are named insureds under a homeowner’s insurance policy issued by State Farm. In August 2001, the Landerses notified State Farm that their home had suffered structural and cosmetic damage as a result of plumbing leaks. State Farm assigned Reuben Quintero as the adjuster for the claim. State Farm also hired a pipe inspection company and an engineering company to inspect the Landerses’ property and to provide a report to State Farm regarding the cause of the damage to the Landerses’ home. Following the completion of its investigation, State Farm determined that the damage claimed by the Landerses was not caused by a plumbing leak and that State Farm did not have a duty under the Landerses’ homeowner’s policy to pay the claim. The Landerses sued State Farm and Quintero for breach of State Farm’s obligations under the homeowner’s policy, breach of the duty of good faith and fair dealing, fraud, and for violations of the Texas Insurance Code and the Texas Deceptive Trade Practice Act (“DTPA”).

State Farm filed a motion to exclude the opinion testimony of Jim Linehan and Jeffery Lineberger, the Landerses’ two expert witnesses on the issue of causation. After two Daubert/Robinson hearings, the motion was granted, and both Linehan and Lineberger were prevented from testifying regarding the cause of the damage to the Landerses’ home.

Two months later, on November 1, 2005, State Farm filed its “Motion for No Evidence Summary Judgment on All of the Plaintiffs’ Claims and Supplement To the Motion for Summary Judgment on Plaintiffs’ Extra-Contractual Claims.” [State Farm had previously filed a traditional motion for partial summary judgment regarding the Landerses’ extra-contractual claims, which also sought the dismissal of Quintero.] This motion was set to be submitted to the trial court at 8:00 a.m. on November 28, 2005. At 9:20 a.m. on the morning of the submission, the district court clerk received the Landerses’ response to the motion. In addition to complaining of the trial court’s striking of their experts, the response also contains a motion seeking continuance of the submission of State Farm’s motion for summary judgment. The response does not contain a motion for leave to file tardy response.

The next day, the trial court, noting that it had found no response to the motions for summary judgment or motions to be considered by the court, granted State Farm’s motions for summary judgment and dismissed the Landerses’ claims against Quintero. A copy of this order was faxed to the Landerses’ counsel.

Eight days later, on December 7, 2005, the Landerses sent a letter to the trail court advising it that it was in error when it stated in the order that they did not file a response to the motions for summary judgment. They stated that a response was timely filed by certified mail, return receipt requested on November 21, 2005. They also stated that a motion for continuance of the hearing on State Farm’s motion for summary judgment was contained in the response.

Loree also states in the letter that, on November 23, 2005, he sent a draft order to thetrial court regarding his motion for a continuance. A copy of the alleged transmittalletter for this order was attached to the letter. Although the attached letter is datedNovember 23, 2005, it is file stamped as having been received by the clerk’s officeon December 13, 2005— almost three weeks after Loree claims to have mailed it tothe trial court.

The letter to the trial court did not include a certified mail receipt demonstrating a timely post mark or an affidavit verifying the facts alleged in his letter regarding the timeliness of the filing of the response.

The Landerses filed a motion for new trial. Although the motion asserts that the Landerses’ response and motion for continuance were timely filed on November 23, 2005, again, there was no copy of a certified mail receipt demonstrating a timely post mark of the United States Postal Service or an affidavit verifying the facts alleged in the motion regarding the timeliness of the filing of the response. The motion was overruled by operation of law, and this appeal followed.
Although Quintero is named in the style of this appeal, the Landerses do not contestthe trial court’s dismissal of Quintero from this suit.

Summary Judgment

In their first and second issues, the Landerses argue that the trial court erred in granting State Farms’s motions for summary judgment because there was summary judgment evidence creating fact issues with respect to all of the Landerses’ causes of action. We disagree.

Standard of Review

We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). A no-evidence motion for summary judgment must be granted if, after adequate time for discovery, the moving party asserts that there is no evidence of one or more specified elements of a claim or defense on which the adverse party would have the burden of proof at trial and the respondent produces no summary judgment evidence raising a genuine issue of material fact on those elements. Tex. R. Civ. P. 166(a)(i); LMB, Ltd. v Moreno, 201 S.W.3d 686, 688 (Tex. 2006).

A party who files a no-evidence summary judgment motion pursuant to rule 166a(i) has essentially requested a pretrial directed verdict. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581 (Tex. 2006). When the movant files its motion in proper form, the burden shifts to the nonmovant to defeat the motion by presenting evidence that raises an issue of material fact regarding the elements challenged by the motion. Id. at 582; Weaver v. Highlands Ins. Co., 4 S.W.3d 826, 829 (Tex. App.—Houston [1st Dist.] 1999, no pet.).

Timeliness of the Landerses’ Response

In one pleading, State Farm filed two no-evidence motions for summary judgment. In the motions, State Farm asserts that it is entitled to summary judgment on the Landerses’ breach of contract claim because:

(1) The Landerses have no evidence that any peril or event covered under their policy with State Farm Lloyds was a producing cause of a loss.

(2)The Landerses have no evidence that any peril or event covered under their policy with State Farm Lloyds was a proximate cause of a loss.

(3)The Landerses have no evidence that State Farm Lloyds failed to comply with any of its duties under the homeowner’s policy.

(4)The Landerses have no evidence that any failure by State Farm Lloyds to comply with any of its duties under its contract with the Plaintiffs was a producing cause of damages.

(5)The Landerses have no evidence that any failure by State Farm Lloyds to comply with any of its duties under the homeowner’s policy was a proximate cause of the Landerses’ damages.
State Farm also asserts that, because there was no evidence of causation and no evidence of breach of contract, it had no liability under the Texas Insurance Code.

State Farm also supplemented a previously-filed traditional motion for summary judgment regarding the Landerses’ extra-contractual claims with a no evidence motion on these claims. In the supplement, State Farm asserts that it is entitled to summary judgment on the extra-contractual claims because there cannot be liability under extra-contractual causes of action if, as here, there is no evidence of a breach of the homeowner’s policy by State Farm. In addition, State Farm argues that there is no evidence that the conduct that State Farm allegedly engaged in was extreme or that it produced damages unrelated to or independent of the policy claim.

Pursuant to Texas Rule of Civil Procedure 166a(c), the Landerses had until November 21, 2005, seven days before the hearing on the motions for summary judgment to file either (1) a response to these motions or (2) a motion for leave to file the response out of time. Tex. R. Civ. P. 166a(c). Rule 166a(c) provides, in pertinent part, that, “except on leave of court, the adverse party, not later than seven days prior to the date of the hearing may file and serve opposing affidavits or other written responses.” Tex. R. Civ. P. 166a(c).

The “ mail box” rule of Texas Rule of Civil Procedure 5, applies to responses to motions for summary judgment. Pursuant to this rule, a response, sent to the clerk by first class United States mail on the seventh day prior to the hearing, is deemed timely filed if received by the clerk not more than 10 days after its due date. Tex. R. Civ. P. 5. This rule further states that “a legible post mark affixed by the United States Postal Service shall be prima facie evidence of the date of mailing.” Id. In addition, Texas courts have held that, “in the absence of a proper postmark or certificate of mailing, an attorney’s un-controverted affidavit may be evidence of the date of mailing.” Lofton v. Allstate Ins., 895 S.W.2d 693, 694 (Tex. 1998).

Here, the Landerses’ response to the no-evidence motions for summary judgment was untimely filed. The Landerses did not present the trial court with proof of “a legible postmark affixed by the United States Postal Service” or an affidavit from any competent person establishing that the Landerses’ response to State Farms’s motion for summary judgment was timely mailed. Furthermore, the Landerses did not file a motion for leave to file their untimely response. Under these circumstances, we conclude that the Landerses’ response was filed on the date of the court clerk’s file stamp, November 28, 2005, and the Landerses’ allegations that their response was timely filed are unsupported in the record.

On appeal, the Landerses attach to their reply brief what purports to be a receipt for the delivery of their response to the motions for summary judgment. Attachments of documents as exhibits or appendices to briefs is not a formal inclusion in the recordon appeal. Till v. Thomas, 10 S.W.3d 730, 734 (Tex. App.—Houston [1st Dist.] 1999,no pet.). Therefore, we cannot consider it. Id.

Accordingly, the trial court did not err in granting the pending motions for summary judgment without considering the untimely response. See Atchely v. NCNB Texas Nat’l Bank, 795, S.W.2d, 336, 337 (Tex. App.—Beaumont, 1990, pet. denied) (“Untimely responses to motions for summary judgments are not properly before a trial court at a hearing on such motions.”)

Effect of Untimely Response

The Landerses argue that, even without their response, State Farms’s motions for summary judgment still should have been denied. The Landerses contend that State Farms attached the report of one of their experts, Taylor Sealy, to its earlier-filed traditional motion for partial summary judgment, and Sealy’s report creates a fact issue sufficient to defeat both subsequently-filed no-evidence motions for summary judgment. [The Landerses did not designate Sealy to testify at trial.] We disagree.

Absent a timely response, a trial court must grant a no-evidence motion for summary judgment that meets the requirements of Rule 166a(i). Tex. R. Civ. P. 166a(i). If a nonmovant wishes to assert that, based on the evidence in the record , a fact issue exists to defeat a no-evidence motion for summary judgment, he must timely file a response to the motion raising this issue before the trial court. Id. Before the advent of rule 166a(i), it was well settled that summary judgment could not be rendered based on the default of the opposing party. McConnell v. Southside Sch. Dist., 858 S.W.2d 337, 343 (Tex. 1993); Rizkallah v. Conner, 952 S.W.2d 580, 582–83 (Tex. App.—Houston [1st Dist.] 1997, no pet.). The nonmovant was not required to file a response to defeat the motion for summary judgment because deficiencies in the movant’s own proof or legal theories might defeat the movant’s right to judgment as a matter of law. See City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 ( Tex. 1979). However, as Texas courts have repeatedly held, the traditional prohibition against summary judgment by default is inapplicable to motions filed under Rule 166a(i). Roventini v. Ocular Scis., Inc., 111 S.W.3d 719, 723 (Tex. App.—Houston [1st Dist.] 2003, no pet.). As the court held in Jackson v. Fiesta Mart Inc.,

On appeal, [nonmovant] argues that the trial court may not grant a summary judgment by default for lack of an answer or response when the movant’s summary judgment proof is legally insufficient. [Nonmovant’s] argument is technically correct when applied to a motion for summary judgment filed under Rule 166a(c). [Movant’s] motion, however, was clearly a no-evidence motion for summary judgment filed under Rule 166a(i), which shifts the burden of raising a genuine issue of material fact to the nonmovant. 979 S.W.2d 68, 71 (Tex. App.—Austin, 1998, no pet.). Accordingly, where as here, the movant has filed a no-evidence motion, identifying the elements as to which there is no evidence, in a form which is neither conclusory nor a general no-evidence challenge, summary judgment must be rendered absent a legally adequate response by the nonmovant. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001); Roventini, 111 S.W.3d at 722. In this case, because the Landerses did not file a timely response, the trial court did not err in granting the no-evidence motions for summary judgment.

We overrule issues one and two.

Motion for Continuance

In issue five, the Landerses assert that the trial court erred in denying their motion for continuance of the hearing on motions for summary judgment. We disagree.

Standard of Review

We review the grant or denial of a motion for continuance for an abuse of discretion. Villegas v. Carter, 711 S.W.2d 624, 626 (Tex. 1986). We will not overrule the trial court’s decision unless the trial court acted unreasonably or in an arbitrary manner “without reference to any guiding rules and principles.” Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991) (quoting Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985)).

The trial court may grant a continuance to a party opposing a motion for summary judgment to permit further discovery if the nonmovant can show the need for such discovery to oppose the motion. Tex. R. Civ. P. 166a(g). A motion for continuance seeking time for discovery must be supported by an affidavit that describes the evidence sought, explains its materiality, and shows that the party requesting the continuance has used due diligence to timely obtain the evidence. Tex. R. Civ. P. 251, 252; see Hatteberg v. Hatteberg, 933 S.W.2d 522, 527 (Tex. App.—Houston [1st Dist.] 1994, no writ). The affidavit of diligence must state with particularity what diligence was used; conclusory allegations of diligence are not sufficient. Gregg v. Cecil, 844 S.W.2d 851, 853 (Tex. App.—Beaumont 1992, no writ). A party who fails to diligently use the rules of discovery is not entitled to a continuance. State v. Wood Oil Distrib., Inc., 751 S.W.2d 863, 865 (Tex. 1988).

As discussed above, the Landerses did not file their motion for continuance until after the deadline had passed for their response. Furthermore, neither the motion nor the affidavit verifying the contents of the motion set forth any facts regarding the Landerses’ diligence in attempting to secure additional expert testimony prior to the deadline to respond to the motion for summary judgment.

The entirety of the Landerses’ motion for continuance states as follows:

Alternatively, Plaintiffs move for continuance so that they can designate another engineer and present evidence that the subject leaks caused damage to Plaintiffs’ home since the court has excluded such evidence from Mr. Linehan and Mr. Lineberger. This continuance would give Plaintiffs the opportunityto present evidence to controvert State Farm’s [sic] no-evidence motion for summary judgment. This continuance is not requested for purposes of delay,but so that justice may be done.

Under these circumstances, we hold that the trial court did not abuse its discretion in denying the motion for continuance. We overrule issue five.

Because we affirm the trial court’s granting of the two motions for summary judgment, we need not reach the remaining issues.

Conclusion

We affirm the trial court’s judgment.

George C. Hanks, Jr.
Justice

Panel consists of Justices Taft, Hanks, and Higley

Tuesday, December 18, 2007

Appellate panel splits on whether trial court should have heard declaratory judgment suit against City of Houston

Controversy here involved booze permit [okay: wine & beer]. The issue whether a declaratory judgment claim may be litigated under various contingencies, however, arises with some frequency in Texas courts, with inconsistent rulings on appeal.

Justice Edelman dissented in Supermercado Teloloapan, Inc. v. City of Houston (Tex. App.- Houston [14th Dist.] Dec. 18, 2007)(Dissenting Opinion by Justice Edelman) (exhaustion of administrative remedies, exclusive jurisdiction doctrine, lack of jurisdiction)

FROM THE DISSENTING OPINION

In 2005, Supermercado, a grocery store operator, applied to the Texas Alcoholic Beverage Commission (the "Commission") for an off-premise beer and wine permit. To satisfy a condition for obtaining the permit, Supermercado requested the City to certify that the location of its store was in a "wet area" and that the sale of beverages there was not prohibited by ordinance. See Tex. Alco. Bev. Code Ann. ' 61.37 (Vernon 2007). However, the City refused to certify the latter because it concluded that a charter school was located less than the required 300 feet from the store.

Because the certification sought from the City by Supermercado was one step in this permit application process, related directly to that process, and arises only in connection with such an application, this declaratory judgment action involves the same subject matter as that over which the Commission has exclusive jurisdiction. See Duenez, 201 S.W.3d at 676; Sells v. Roose, 769 S.W.2d 641, 643 (Tex. App.- Austin 1989, no writ). Therefore, because Supermercado had not exhausted its administrative remedies, the district court lacked subject matter jurisdiction over the declaratory judgment action, and we should reverse the judgment
of the trial court and order the case dismissed for lack of subject matter jurisdiction.

Supermercado Teloloapan, Inc. v. City of Houston (Tex.App.- Houston [14th Dist.] Dec. 18, 2007)(Hedges)(government entity law, regulation, declaratory judgment, UDJA)

M A J O R I T Y O P I N I O N [EXCERPTS]

In this declaratory judgment action, appellant, Supermercado Teloloapan, Inc. d/b/a Teloloapan Meat Market ("Supermercado"), appeals a take-nothing judgment in favor of appellee, the City of Houston ("the City"). In Supermercado's sole issue, it argues that the trial court erred in finding that the City's definition of the term "property line" is reasonable and consistent with the plain meaning of section 3-2(a) of Houston's Code of Ordinances. We affirm.

* * *
The dissent believes this Court does not have jurisdiction to address the merits of the declaratory judgment because the Commission has exclusive jurisdiction. The dissent finds that the issuance of the certification by the City in this case is but "one step" in the process of seeking a permit from the Commission. Relying on Sells v. Roose, 769 S.W.2d 641, 643 (Tex. App.CAustin 1989, no writ), the dissent concludes that Supermercado's remedy lies with the administrative agency. In Sells, Roose and other business owners applied for a beer retailer's permit with the Commission. The county clerk refused to certify that Roose's premises were in a "wet" area. The business owners filed a petition for writ of mandamus seeking to compel Sells to perform her statutory duty and issue the certificate. The court of appeals found that Sells's duty to issue a certificate as to the "wet" or "dry" status of a location arises only in connection with an application for a permit authorized by the Code. Id. at 643. In that regard, the court recognized exclusive jurisdiction in the administrative agency, with the result that the district court lacked subject-matter jurisdiction. Id.

In this case, however, Supermercado filed a declaratory judgment action seeking clarification of a Houston City ordinance. Unlike the business owners in Sells, Supermercado did not seek to compel the City to issue a certification of "wet" status. Supermercado sought a declaratory judgment to interpret the Ordinance, which is specifically permitted by the Texas Civil Practice and Remedies Code. See Tex. Civ. Prac. & Rem. Code Ann.' 37.004(a) (Vernon 1997).

Supermercado is not required to exhaust administrative remedies with the Commission to obtain an interpretation of the Ordinance. See Burgess, 101 S.W.3d at 554. Therefore, Supermercado's cause of action and remedy for enforcement is not derived from the Code.

Before Chief Justice Hedges, Justices Fowler and Edelman; Justice Edelman dissented
Appellate Cause No. 14-06-00472-CV
Full case style: Supermercado Teloloapan, Inc. d/b/a Teloloapan Meat Market v. City of Houston
Appeal from 80th District Court of Harris County (Hon. Kent Sullivan, [since succeeded on that bench by Judge Lynn M. Bradshaw-Hull])

Find terms: municipal, local government law, suits, litigation involving City of Houston, government entities, governmental immunity, city ordinance

Back on the appellate radar: Eric Andell

Gone South - Unremarkable per curiam opinion denying mandamus relief indicates that former Houston appeals court justice Eric Gordon Andell has returned to his prior calling as a jurist, hearing cases as a visiting judge in Brazoria County.

In Re Julius Thompson , No. 14-07-01010-CV (Tex.App.- Houston [14th Dist.] Dec. 18, 2007)
(Before Chief Justice Hedges, Justices Fowler and Frost)
Appeal from 300th District Court of Brazoria County
Disposition: Motion or writ denied (trial court order re: DNA testing)

Also see: In re James Yost , NO. 14-06-01017-CV (Tex.App.- Houston [14th Dist.] Jan. 9, 2007)(per curiam denial)
(temporary orders mandamus against Judge Eric Andell denied) (Before Justices Anderson, Hudson and Fowler)
Appeal from 300th District Court of Brazoria County (Hon. Eric Andell, sitting by assignment)

Appellant's brief cited no case law - Court of Appeals nevertheless decides the merits


Court affirms damages against restaurant that did not honor its marketing contract. Admission of business records testimony found proper.

Loredana Enterprise, Inc., d/b/a Babbo Bruno and Stefano Bertolotti v. Rewards Network Services, Inc., f/k/a Idine Restaurant Group, Inc., No. 14-07-00118-CV (Tex.App.- Houston [14th Dist.] Dec. 18, 2007)(Opinion by Justice Seymore)(breach of contract, small business litigation, debt, personal guarantee, exclusion of evidence) (Before Chief Justice Hedges, Justices Anderson and Seymore)
Appeal from 280th District Court of Harris County (Hon. Tony Lindsay)
Disposition: Judgment for Plaintiff on breach of contract claim in bench trial affirmed

Appellee, Rewards Network Services, Inc. ("Rewards") sued appellants, Loredana Enterprise, Inc. ("Loredana") and Stefano Bertolotti, alleging breach of contract. Following a bench trial, the court found for Rewards and entered judgment for $29,520.24 plus pre-judgment interest, post-judgment interest, attorney's fees, and costs. In three issues, appellants challenge the legal and factual sufficiency of the evidence to support the trial court's judgment.[1] All dispositive issues are clearly settled in law. Accordingly, we issue this memorandum opinion and affirm. See Tex. R. App. P. 47.4.

I. Background

Loredana operates Babbo Bruno, a restaurant in Webster, Texas. Rewards is a marketing and advertising company that provides services to the restaurant industry. In February 2004, Loredana and Rewards entered into a contract whereby Loredana agreed to provide Rewards with dining credits for the purchase of food, beverages, and other services at Babbo Bruno. In exchange, Rewards agreed to pay Loredana a sum of money and promote Babbo Bruno to its members by providing credits cards funded with the dining credits. Under the agreement, Rewards was to receive ninety percent of each transaction. Additionally, to facilitate payment, Loredana agreed to place all the funds earned at Babbo Bruno through dining credits transactions into a bank account, segregated from its other funds. Rewards had access to the account and could withdraw its share of each transaction. Stefano Bertolotti provided his personal guaranty in the event Loredana failed to fulfill its obligations under the contract.

Subsequently, Rewards was denied access to the account and could not withdraw its portion of $183.24 in dining credit transactions. At the time, the total remaining credits equaled $39,360.33. Under the liquidated damages clause of the contract, Rewards was entitled to seventy-five percent of the remaining credits in the event of a breach of contract by Loredana. Rewards sued Loredana and Bertolotti for breach of contract. The trial court rendered a judgment in favor of Rewards; this appeal followed.

II. Analysis

To recover in a breach of contract case, a plaintiff must prove (1) existence of a valid contract; (2) plaintiff performed or tendered performance; (3) defendant breached the contract; and (4) plaintiff was damaged as a result of that breach. Apache Corp. v. Dynegy Midstream Serv. Ltd. P'ship, 214 S.W.3d 554, 560 (Tex. App. - Houston [14th Dist.] 2006, no pet.).

In their stated appellate issues, appellants claim only that Rewards did not prove the third element of its claimCthat Loredana breached the contract. Specifically, appellants contend: (1) no evidence supports the trial court's finding that Loredana breached the contract; (2) the evidence was insufficient to support the trial court's finding that Loredana breached the contract; and (3) in the absence of a breach of contract by Loredana, there is no evidence to support the finding of liability of Bertolotti under his personal guaranty. Additionally, although not addressed in their stated issues, in their "Summary of the Argument," appellants seem to challenge the damages awarded. Accordingly, we will consider their complaints concerning the breach of contract finding and damages.

A. Breach of Contract

In their first and second issues, appellants contend there is no evidence or the evidence is factually insufficient to support the trial court's finding that Loredana breached the contract because (1) Rewards failed to prove Loredana owed money to Rewards; (2) Rewards' damages were not the result of any act or omission of Loredana; (3) the trial court could not rely on the testimony of Rewards' sole witness; and (4) Rewards made no demand for any amount owed.

1. Standard of Review

A trial court=s findings in a bench trial are reviewable for legal and factual sufficiency of the evidence under the same standards as are applied in reviewing evidence supporting a jury=s findings. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). Findings of fact in a bench trial have the same force and dignity as a jury=s verdict on jury questions. Arrellano v. State Farm Fire & Cas. Co., 191 S.W.3d 852, 855B56 (Tex. App.CHouston [14th Dist.] 2006, no pet.). However, the trial court=s findings are not conclusive when, as here, there is a complete reporter=s record. Id.

When reviewing the legal sufficiency of the evidence, we review the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We credit favorable evidence if a reasonable fact finder could, and disregard contrary evidence if a reasonable fact finder could not. Id. at 827. The evidence is legally sufficient if it would enable a reasonable and fair-minded person to reach the verdict under review. Id. There is Ano evidence@ or legally insufficient evidence when (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. See Id. at 810; Merrell Dow Pharms., Inc., v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).

In reviewing factual insufficiency claims, we consider all the evidence in the record, both supporting and contrary to the finding. See Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). We may set aside a verdict only if it is so contrary to the overwhelming weight and preponderance of the evidence that it is clearly wrong and manifestly unjust. See id.

2. Whether Loredana Owed Money to Rewards?

Loredana contends the trial court erred in finding it breached the contract because Rewards failed to prove Loredana owed money pursuant to section 9 of the contract. We disagree.

Under Section 9 of the contract, Rewards was entitled to withdraw from Loredana=s bank account Aany amounts owed.@ The record contains ample evidence proving Loredana owed money to Rewards. Lisa Massey, Rewards= regional manager for Texas and Louisiana, testified that, pursuant to the contract, Rewards provided $15,000 to Loredana in return for $24,000 in dining credits. At some point, Rewards purchased additional dining credits, making the total dining credits due $47,000. Under the contract, Rewards held the right to withdraw from Loredana=s bank account ninety percent of the funds earned at Babbo Bruno through dining credits transactions. To document these transactions, Rewards introduced its Exhibit 5, an itemized list of its member=s dines. This exhibit documented that between May 19, 2004 and May 21, 2004 Rewards members spent $183.78 in dining credits at Babbo Bruno. Under the contract, Loredana owed Rewards ninety percent of these transactions. Massey testified Rewards was denied permission to withdraw the funds from Loredana=s bank account, and that Rewards was never paid these funds. This evidence demonstrates that Rewards was owed its share of the $183.78 in dining credits transactions. Therefore, we conclude Rewards presented sufficient evidence to support the trial court=s finding that Loredana owed money under Section 9 of the contract.

3. Whether Any Act or Omission of Loredana Prevented Rewards From Withdrawing Money Owed?

Loredana further contends Rewards presented insufficient evidence for the trial court to find the stop payments, which denied Rewards access to Loredana=s bank account, were the result of any act or omission by Loredana. We disagree.

Pursuant to the contract, Loredana agreed to maintain funds earned though dining credits transactions in a bank account, and it authorized Rewards to withdraw any amounts owed from this bank account at any time. In its Exhibit 4, Rewards introduced business records detailing its understanding regarding why payments from Loredana=s bank account were stopped. The exhibit contains notes from a conversation between a Rewards representative and a Loredana representative indicating Loredana believed the usage of dining credits was Atoo much@ and that the relationship was putting Loredana in a Afinancial snaffue [sic].@ According to the exhibit, payment was stopped because Loredana cancelled the payment.

Nevertheless, appellants contend Rewards did not prove the stop payment resulted from any act or omission by Loredana. In their brief, appellants suggest a number of alternative reasons why the bank may have stopped payment. However, at trial, after asserting Amyriad@ reasons might explain the bank=s stop payment, including accident by the bank, appellants offered no evidence to establish those reasons. Therefore, the evidence was sufficient to support the trial court=s finding that the stop payment order resulted from Loredana=s actions.

4. Whether the Trial Court Erred In Relying On Lisa Massey=s Testimony?

Massey was Rewards= sole witness at trial. Appellants contend the trial court erred in basing its judgment on Massey=s testimony because she relied on business records not within her personal knowledge, the relevant records were not admitted into evidence, and she did not have personal knowledge regarding the Loredana account.

a. Business Records

When a witness possesses knowledge regarding the preparation and retention of records, she may testify regarding the contents. See in re E.A.K., 192 S.W.3d 133, 142 (Tex. App.CHouston [14th Dist.] 2006, no pet.). Here, Massey demonstrated that she had knowledge regarding Rewards= business records. Regarding Rewards= Exhibit 4 (Rewards= Merchant Information records), Massey testified that Rewards maintained a call center whereby its representatives entered notes in their computers regarding all conversations with merchants. Regarding Rewards= Exhibit 5 (transaction list of Rewards= members= dining credits purchases), Massey testified Rewards tracked individual transactions through an automated process that tabulated the amount of dining credits in each transaction with a merchant and debited that amount from the total dining credits remaining under the agreement. Regarding Rewards= Exhibit 7 (Rewards= write-off statement), Massey testified that Rewards= legal department created the statement by determining the amount of dining credits Rewards would have been entitled to receive if Loredana had not breached the contract. Because Massey had knowledge regarding the preparation and retention of each business record, the trial court was entitled to rely on her description of those records. See in re E.A.K., 192 S.W.3d at 142.

b. Rewards' Exhibit 6

Appellants contend the trial court erred in finding that Loredana never remitted the amounts owed to Rewards because Rewards relied on its Exhibit 6 - records from a third party that were not admitted into evidence. However, Massey=s testimony was not based solely on Rewards= Exhibit 6. As stated above, Rewards= Exhibit 5 reflected the amount Loredana owed to Rewards. Rewards= Exhibit 7, prepared by its legal department, reflected the total amount of dining credits written-off by Rewards. Additionally, Massey had supervisory authority over Rewards= account with Loredana, and testified that she would have personal knowledge if Loredana had, at any time, paid Rewards. Therefore, even if we disregard Rewards= Exhibit 6, Rewards presented sufficient evidence to prove Loredana failed to remit the amount owed under the contract.

Accordingly, we conclude that the trial court did not err in relying on Massey=s testimony pertaining to Rewards= relationship and business transactions with Loredana.

5. Whether Rewards Made A Demand For Amounts Due?

Lastly, appellants contend Loredana did not breach the contract because the evidence is insufficient to prove Rewards made a demand for payment as required by the contract. Section 9 of the contract provides, in part: Afunds will be maintained by [Loredana] in the Bank Account and will be payable to [Rewards] on demand.@ (emphasis added). Also, under Section 9, Rewards may obtain payment of any amount owed from Loredana=s bank account through an automated clearinghouse debit or otherwise. Appellants contend the contract required Rewards to make a demand on Loredana for any amounts owed after receiving notice regarding the stop payment from the bank. However, in finding Loredana breached the contract, the trial court implicitly found Rewards made a demand as contemplated by the contract.

Under the framework created by the contract to facilitate payment, Loredana would segregate dining credit funds from other revenue earned at Babbo Bruno into a separate bank account from which Rewards could withdraw any amounts owed. However, when Rewards attempted to withdraw the amount owed for the May 19, 2004 through May 21, 2004 transactions, this payment was stopped. In finding Loredana breached the contract, the trial court implicitly concluded that the attempt to withdraw was a demand for amounts owed as contemplated by the contract. We conclude the evidence was sufficient to support the trial court=s implicit finding that Rewards demanded the amount due under the contract.

In sum, the evidence is legally sufficient to support the trial court=s breach of contract finding, and the finding is not so contrary to the overwhelming weight and preponderance of the evidence that it is clearly wrong and manifestly unjust. Appellants= first and second issues are overruled.

B. Personal Guaranty

In their third issue, appellants claim that, in the absence of a breach of contract by Loredana, there is no evidence to establish any liability by Stefano Bertolotti under his guaranty of the contract between Loredana and Rewards.[2] However, having found the evidence sufficient for the trial court to conclude Loredana breached the contract with Rewards, the trial court did not err in holding Bertolotti to his guaranty of the contract. Appellants= third issue is overruled.

C. Damages

Although not included as a stated issue, in their ASummary of the Argument,@ appellants seem to challenge the damages awarded by the trial court. Appellants contend the trial court erred in finding appellants jointly and severally liable for $29,520.24 to bear post-judgment interest at the rate of 8.25% per annum plus attorney=s fees. However, we conclude the trial court properly calculated damages.

Under the liquidated damages clause of the contract, appellants were liable for seventy-five percent of the dining credits remaining at the time of a breach of contract plus reasonable attorney=s fees. At the time of breach, there were $39,360.33 in dining credits remaining under the contract. Seventy-five percent of $39,360.33 is $29,520.24. The trial court properly awarded judgment in the amount of $29,520.24.

Under the Finance Code, a money judgment on a contract that does not provide for interest or time price differential earns post-judgment interest at the prime rate as published by the Board of Governors of the Federal Reserve System on the date of computation. See Tex. Fin. Code Ann. ' 304.003 (Vernon 2006). The date of computation in this case was November 27, 2006, and the prime rate during November 2006 was 8.25%. The trial court imposed a post-judgment rate of interest at 8.25%; therefore, the rate of post-judgment interest does not violate the Finance Code. Accordingly, to the extent appellants challenge the amount of damages awarded, we overrule these complaints.

For the reasons stated above, the judgment of the trial court is affirmed.

/s/ Charles W. Seymore
Justice

Judgment rendered and Memorandum Opinion filed December 18, 2007.
Panel consists of Chief Justice Hedges and Justices Anderson and Seymore.

[1] Appellants= brief to this court contains no index of authorities and, in fact, cites no authority whatsoever as required by the Texas Rules of Appellate Procedure. See Tex. R. App. P. 38.1. However, we will review this case on the merits despite these deficiencies.

[2] Appellants do not challenge the validity of the personal guaranty itself. Appellants= sole contention is that in the absence of a breach of contract by Loredana, there is no evidence to find Bertolotti liable under his personal guaranty of the contract.