Reversed and Remanded and Memorandum Opinion filed May 13, 2014.




                                     In The

                    Fourteenth Court of Appeals

                             NO. 14-13-00522-CV

    RICHARD’S AUTO SALES AND RICHARD OSBORNE, Appellants

                                       V.
                     FAN DISTRIBUTING LLC, Appellee

             On Appeal from the County Civil Court at Law No. 4
                           Harris County, Texas
                      Trial Court Cause No. 1001783

                  MEMORANDUM OPINION

      Appellants Richard’s Auto Sales and Richard Osborne (collectively,
Osborne) held a business line of credit with a bank that became delinquent and was
sold to a third party. Fan Distributing purchased this delinquent account and sued
Osborne to collect the debt. The trial court granted summary judgment in favor of
Fan Distributing. In two issues, Osborne asserts that fact issues preclude summary
judgment on the debt and the award of attorney’s fees. We agree, and reverse and
remand for a new trial.
                                  BACKGROUND

      Fan Distributing purchased account number 5474648801014079 from a
previous creditor. Osborne had opened or guaranteed the account and promised to
pay it.   Osborne defaulted in making payments on the account, and Fan
Distributing sued on an open and stated account, for debt, and for breach of
contract. Osborne answered with a general denial.

      Fan Distributing filed a motion for summary judgment. In its motion, it
asserted that Osborne had an open and stated account, which had been closed
because Osborne breached the agreement to pay. Fan Distributing urged that
because it had been assigned Osborne’s account by Wells Fargo, the original
creditor, it had the same rights and obligations as Wells Fargo. Fan Distributing
alleged that Osborne failed to make payments as required by the terms of the
contract, resulting in damages to Fan Distributing. It asserted it was entitled to
judgment as a matter of law on its breach of contract claim. Additionally, Fan
Distributing asserted that it was entitled to attorney’s fees and court costs because
it had proved that Osborne’s breach had caused damages.

      As evidence, Fan Distributing attached Exhibit A, an affidavit from its
executive officer, Alan Cameros. In this affidavit, Cameros stated the following:

      I have personal knowledge of the facts stated herein, and they are all
      true and correct.
      1. “I am an officer of FAN Distributing (“FAN”), Plaintiff in this
         action. FAN currently owns this debt.
      2. “By virtue of the relationship and my employment, all information
         contained about this delinquent debt is made available to me for
         the purpose of collecting such delinquent debt. I have personal
         knowledge of relevant financial and account information
         concerning Account No. 5474648801014079, which is made the
         subject of this lawsuit including the name and address of the
         debtor, payments made, and credits received. I also have personal
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            knowledge that Defendant(s) failed to make timely payments on
            the account, the outstanding balance due and that the interest
            accrues at a rate of 9.25%.
      3. “Demand for payment of the balance owing was made to
         Defendants RICHARD’S AUTO SALES and RICHARD
         OSBORNE, more than thirty (30) days prior to making this
         affidavit, and payment still has not yet been made.
      4. “Attached hereto are true and correct copies of the business records
         of FAN. These documents show the financial information,
         including the balance owing, on the Account. These records are
         kept by Plaintiff in the regular course of business and it was in the
         regular course of business of Plaintiff or its predecessor for an
         employee or representative with personal knowledge of the act,
         event, condition, or opinion recorded to make the memorandum or
         records or to transmit information thereof to be included in such
         memorandums of records. The records were made at or near the
         time of the act, event recorded, or reasonably soon thereafter.
      5. “Defendant(s) have made no claim of being an active member in
         the military services of the United States or any state thereof, and
         to the best of my knowledge, the defendant is not an active
         member in military service. Nor have they requested reduction of
         the interest rate on the account pursuant to the Soldiers and Sailors
         Civil Relief Act.
      6. “The debt on the Account is delinquent, past due and remains due
         and owing. Plaintiff is the party and entity to whom the
         delinquency is owed. There are no set-offs, credits, or allowances
         due or to become due from the Plaintiff to the Defendant, other
         than those set forth herein. . . . The current balance due is
         $31,539.83 plus any prejudgment interest permitted by the
         agreement or by law.”

      Attached to Exhibit A are two bills of sale, both dated May 28, 2010. One is
from Wells Fargo Bank, N.A. conveying to Absolute Resolutions Corp. “certain
assets” identified in the “Asset Schedule” attached as “Exhibit II.” The second is
from Absolute Resolutions conveying to Fan Distributing the same assets. 1 Both

      1
          There is neither an “Asset Schedule” nor an “Exhibit II” included with the bills of sale.

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bills of sale identically convey “the right to collect all principal, interest or other
proceeds of any kind with respect to the Assets remaining due and owing of as of
the date hereof.” A spreadsheet is also attached to Cameros’ affidavit, which lists
an “original account” numbered 5474648801014079, an “original lender” of
“Wells Fargo Bank,” a balance of $31,539.83, a charge-off date of “12/23/2008,” a
company name of “RICHARDS AUTO SALES,” identical address information as
is detailed on the Wells Fargo BusinessLine account statements (described below),
and a guarantor identified as “OSBORNE, RICHARD.”

      Exhibit B to Fan Distributing’s summary judgment motion consists of
several copies of account statements from Wells Fargo. These statements indicate
that Richard’s Auto/Richard Osborne had a $30,000 Wells Fargo BusinessLine line
of credit that was over the limit and “seriously delinquent” in September 2008.
This line of credit, assigned account number 5474648801014079, continued to
accrue over-limit fees and finance charges from September 2008 to December 23,
2008, when Wells Fargo “charged off” the account. At that time, the account had a
balance of $31,539.83, and the annual interest rate was 9.25%. Finally, Exhibit C
to the motion is an affidavit proving up Fan Distributing’s attorney’s fees.

      Osborne filed a response, asserting that there were issues of fact preventing
summary judgment. Osborne attached Richard Osborne’s affidavit and an affidavit
from Osborne’s attorney to his response. In the response, Osborne specifically
urged that the following fact issues precluded summary judgment in favor of Fan
Distributing:

      1. According to the affidavit of Fan Distributing, a careful reading
         shows that the note the subject of this suit was actually conveyed
         to ABSOLUTE RESOLUTIONS CORP., a corporation organized
         under the laws of the State of California. . . .



                                          4
      2. FAN DISTRIBUTING, LLC never states in their affidavit that
         they own[,] have owned[,] or currently have any relationship
         whatsoever to ABSOLUTE RESOLUTIONS CORP.
      3. In order to prevail, on a suit on a note, Plaintiff must prove they
         own the note or have privity to the note. The affidavit of Alan
         Camero’s [sic] general statement that Fan currently owns this debt
         is simply a general statement. The document attached (labeled
         Exhibit III) shows that WELLS FARGO conveyed the note to
         ABSOLUTE RESOLUTIONS CORP. No where in any document
         provided by Plaintiff does it state that FAN DISTRIBUTING, LLC
         owns the note currently owned (according to its own
         documentation) by ABSOLUTE RESOLUTIONS CORP NOT
         FAN DISTRIBUTING, LLC.
      4. The affidavit of Richard Osborne . . . states that Richard Osborne
         has no knowledge of the debt owed, and specifically denies that
         neither Richard Osborne, individually nor his Business Richard’s
         Auto Sales owns the money which is the subject of this litigation.
      5. The affidavit of Richard Osborne . . . states that a careful reading
         of Plaintiff’s Motion for Summary Judgment shows that Plaintiff
         does not own the note, that he has no idea who ABSOLUTE
         RESOLUTION CORP IS, nor has he ever heard of FAN
         DISTRIBUTING, LLC.
      6. Mr. Osborne also states in his affidavit that he does not owe any
         monies to FAN DISTRIBUTING LLC.
      7. The affidavit of Charles G. Kingsbury . . . states that the attorney’s
         fees in this case are clearly excessive, unnecessary and
         unreasonable.
Other than the asserted fact issues excerpted above, Osborne had no other response
to the motion. Richard Osborne’s affidavit provides, in pertinent part, that (a) he
does not owe Fan Distributing any money, (b) he has never signed a contract with
Fan Distributing, (c) he has never received any documentation from Fan
Distributing stating he owed it any money, and (d) he had never heard of Fan
Distributing until he was served with the lawsuit.



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      The trial court signed a final summary judgment in favor of Fan
Distributing, awarding it $31,539.83 as “principal,” $7,884.96 in attorney’s fees,
$7,884.96 in attorney’s fees if Osborne “unsuccessfully appeals,” 9.25% in post-
judgment interest on the principal award, 5% post-judgment interest on the
attorney’s fee award, and costs of court.      Osborne filed a motion for new
trial/motion to set aside the summary judgment raising the same issues as had been
raised in the response to Fan Distributing’s summary judgment motion. The trial
court denied Osborne’s motion for new trial, and this appeal timely followed.

                                    ANALYSIS

      On appeal, Osborne challenges the summary judgment in favor of Fan
Distributing in two issues. First, Osborne asserts that the trial court erred in
granting summary judgment because there were material issues of fact precluding
judgment as a matter of law in favor of Fan Distributing. Second, Osborne claims
that, because Osborne’s attorney filed a controverting affidavit regarding
attorney’s fees in the trial court, summary judgment on attorney’s fees was
improperly granted.

      We review the trial court’s granting of a summary judgment de novo.
Ferguson v. Bldg. Materials Corp. of Am., 295 S.W.3d 642, 644 (Tex. 2009) (per
curiam). To be entitled to summary judgment under Rule 166a(c), a movant must
establish that there is no genuine issue of material fact so that the movant is
entitled to judgment as a matter of law. Mann Frankfort Stein & Lipp Advisors,
Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We take as true all evidence
favorable to the nonmovant and resolve any doubt in his favor. 20801, Inc. v.
Parker, 249 S.W.3d 392, 399 (Tex. 2008). We consider the evidence presented in
the light most favorable to the nonmovant, crediting evidence favorable to the



                                         6
nonmovant if reasonable fact finders could, and disregarding evidence contrary to
him unless reasonable fact finders could not. Mann Frankfort, 289 S.W.3d at 848.

      To recover for breach of contract, a plaintiff must show: (1) the existence of
a valid contract, (2) the plaintiff performed or tendered performance, (3) the
defendant breached the contract, and (4) the plaintiff suffered damages as a result
of the defendant’s breach. Parker Drilling Co. v. Romfor Supply Co., 316 S.W.3d
68, 72 (Tex. App.—Houston [14th Dist.] 2010, pet. denied). Additionally, an
assignee stands in the assignor’s shoes and may assert those rights that the assignor
could assert, including bringing suit. See Gulf Ins. Co. v. Burns Motors, Inc., 22
S.W.3d 417, 420 (Tex. 2000); Ainsworth v. CACH, LLC, No. 14-11-00502-CV,
2012 WL 1205525, at *6 (Tex. App.—Houston [14th Dist.] Apr. 10, 2012, pet.
denied) (mem. op.).

      As excerpted above, Cameros affirmatively stated in his affidavit that
“Plaintiff [Fan Distributing] is the party and entity to whom the delinquency is
owed.” Although there are bills of sale accompanying Cameros’ affidavit, as noted
above, the asset schedule identifying the transferred assets described in these bills
of sale is missing from our record. Thus, there is nothing in the record to support
Cameros’ conclusory assertion that FAN currently owns Osborne’s debt.

      Moreover, in Richard Osborne’s affidavit, he states twice that he does not
owe any money to Fan Distributing:

      After reviewing the documents in [Fan Distributing]’s Motion for
      Summary Judgment, it is apparent that FAN DISTRIBUTING, LLC
      claims that I owe them monies in the amount of $31,539.83. That is
      simply not true.
                                        ***
      I have also reviewed the amounts FAN DISTRIBUTING, LLC claims
      are owned . . . and the amount of $31,539.83 is not only untrue, but I
      do not owe FAN DISTRIBUTING, LLC any monies at this time.
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(emphasis added).

      Viewing this evidence in the light most favorable to Osborne, taking these
statements as true, and resolving any doubt in Osborne’s favor, as we must in
reviewing this summary judgment, we conclude that there is a fact issue regarding
whether Osborne owes this debt to Fan Distributing. See Mann Frankfort, 289
S.W.3d at 848; 20801, Inc., 249 S.W.3d at 399. Specifically, there is a fact issue
regarding whether Fan properly acquired this debt and thus stands in the shoes as
an assignee of Wells Fargo and may bring this suit against Osborne, 2 and this fact
issue is compounded by Richard Osborne’s affidavit. Cf. Gellaty v. Unifund CCR
Partners, No. 01-07-00552-CV, 2008 WL 2611894, at *5–6 (Tex. App.—Houston
[1st Dist.] July 3, 2008, no pet.) (mem. op.) (concluding that deemed admissions
coupled with proper affidavits supplied conclusive proof of elements of Unifund’s
breach of contract cause of action).

      Accordingly, we conclude that Osborne raised a fact issue sufficient to
preclude summary judgment on this record. We therefore sustain Osborne’s first
issue. Having sustained Osborne’s first issue, we need not address Osborne’s
second issue. See Tex. R. App. P. 47.1.

      We reverse and remand this cause for proceedings consistent with this
opinion.


                                             /s/       Sharon McCally
                                                       Justice
Panel consists of Justices McCally, Busby, and Donovan.




      2
          See Gulf Ins. Co., 22 S.W.3d at 420.

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