                    In The
              Court of Appeals
Sixth Appellate District of Texas at Texarkana
        ______________________________

              No. 06-09-00112-CV
        ______________________________


          WENDELL WATSON, Appellant

                         V.

      TELECHECK SERVICES, INC., AND
   TRS RECOVERY SERVICES, INC., Appellees




   On Appeal from the 123rd Judicial District Court
               Panola County, Texas
             Trial Court No. 2007-433




    Before Morriss, C.J., Carter and Moseley, JJ.
   Memorandum Opinion by Chief Justice Morriss
                                       MEMORANDUM OPINION

        This opinion on rehearing is issued as a substitute for our original opinion issued

September 3, 2010.

        In the events described by Wendell Watson’s pleadings, Watson was gambling at Harrah’s

Casino with $1,000.00 in cash he obtained from Harrah’s in exchange for his personal check in

that amount, when a dispute arose resulting in Harrah’s confiscating his cash and ejecting him

from the premises. That started a chain of events resulting in this appeal.

        Because Harrah’s took his cash, Watson stopped payment on his check. Because Watson

stopped payment on his check, Harrah’s called on Telecheck Services, Inc. (Telecheck), a check

verification and warranty company, to purchase the check. Telecheck purchased the check; listed

Watson negatively in a database accessed by Telecheck’s customers; and hired TRS Recovery

Services, Inc. (TRS), to attempt to collect the check from Watson. Some merchants refused to

take Watson’s checks. Watson contacted Telecheck to dispute the debt and demand that his

negative listing be removed.           Telecheck refused.         Watson sued Telecheck and TRS for

defamation, intentional infliction of emotional distress, violation of the Texas Consumer Credit

Reporting Act, and violation of the Fair Debt Collection Practices Act (FDCPA), as well as, he

claims, illegality and extrinsic fraud. Telecheck and TRS sought and were awarded a summary

judgment denying all of Watson’s claims.1


1
 Defendants argued that Watson’s claims for defamation were barred by truth, qualified privilege, limitations, and
laches. They defended his claims under Chapter 20 of the Texas Business and Commerce Code based on the statute.

                                                        2
           We affirm the summary judgment in part and reverse it in part. As to Watson’s cause of

action under the Consumer Credit Reporting Act,2 we affirm the summary judgment, because

(1) neither defendant is a consumer reporting agency as defined by the Act. As to Watson’s

alleged cause of action for illegality of contract—which is not addressed in the summary

judgment—we overrule Watson’s related point of error as moot, because (2) Watson did not plead

a cause of action for illegality of contract. As to Watson’s cause of action for extrinsic fraud, we

affirm the summary judgment, because (3) Watson’s allegation of extrinsic fraud is an evidentiary

issue not preserved for appeal. As to all other causes of action3 asserted by Watson, we reverse

the summary judgment and remand this cause to the trial court for further proceedings, because

(4) there is a fact issue concerning whether Watson owed a debt, (5) there is a fact issue concerning

whether defendants had actual malice, and (6) there is a fact issue concerning when Watson’s

causes of action accrued.

           A trial court’s summary judgment is reviewed de novo. Frost Nat’l Bank v. Fernandez,

315 S.W.3d 494 (Tex. 2010); Tex. Mun. Power Agency v. Pub. Util. Comm’n, 253 S.W.3d 184,

192 (Tex. 2007). Summary judgment is proper when a movant establishes that there is no

genuine issue of material fact and that he or she is entitled to judgment as a matter of law. TEX. R.


They asserted that his claims for intentional infliction of emotional distress and violations of the FDCPA were barred
by limitations and that the claims for illegality and extrinsic fraud were not preserved for our review.
2
    TEX. BUS. & COM. CODE ANN. §§ 20.01–.13 (Vernon 2009).
3
 The other asserted causes of action are defamation (whether simple or per se), intentional infliction of emotional
distress, and violation of the FDCPA.

                                                          3
CIV. P. 166a(c); French v. Gill, 252 S.W.3d 748, 751 (Tex. App.—Texarkana 2008, pet. denied);

Powers v. Adams, 2 S.W.3d 496, 497 (Tex. App.—Houston [14th Dist.] 1999, no pet.) (citing

Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985)). The movant has the burden to

conclusively disprove one element of the challenged cause of action or to conclusively prove all of

the elements of an affirmative defense. Little v. Tex. Dep’t of Criminal Justice, 148 S.W.3d 374,

381 (Tex. 2004); Pustejovsky v. Rapid-Am. Corp., 35 S.W.3d 643, 645–46 (Tex. 2000). In

deciding whether there is a disputed material fact issue which precludes summary judgment, proof

favorable to the nonmovant will be taken as true. Nixon, 690 S.W.2d at 548–49. We indulge

every reasonable inference in favor of the nonmovant.         Limestone Prods. Distrib., Inc. v.

McNamara, 71 S.W.3d 308, 311 (Tex. 2002). Because the trial court’s order does not specify the

grounds for its summary judgment, we must affirm the summary judgment if any of the theories

presented to the trial court are meritorious. Browning v. Prostok, 165 S.W.3d 336, 344 (Tex.

2005); Hill v. Bartlette, 181 S.W.3d 541, 544 (Tex. App.—Texarkana 2005, no pet.) (citing

Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995)).

(1)     Neither Defendant Is a Consumer Reporting Agency

        Watson contends that the trial court erred in granting summary judgment because there are

genuine issues of material fact and ―questions of whether the law was correctly applied‖ as to

whether Telecheck is civilly liable pursuant to Chapter 20 of the Texas Business and Commerce

Code.



                                                4
       Chapter 20 of the Texas Business and Commerce Code governs the regulation of consumer

credit reporting agencies. TEX. BUS. & COM. CODE ANN. §§ 20.01–.13. A ―consumer reporting

agency‖ that willfully or negligently violates the provisions of Chapter 20 is civilly liable to the

consumer. TEX. BUS. & COM. CODE ANN. § 20.09. The term ―consumer reporting agency,‖

though, does not include ―a business entity that provides only check verification or check

guarantee services.‖ TEX. BUS. & COM. CODE ANN. § 20.01(5). Here, there is no dispute that

Telecheck provides only check verification and guarantee services.

       When interpreting a statutory provision, we seek to find and apply the intent of the

Legislature; and if the text is unambiguous, we will be guided by ―the statute’s plain language

unless that interpretation would lead to absurd results.‖ Tex. Dep’t of Protective & Regulatory

Servs. v. Mega Child Care, Inc., 145 S.W.3d 170, 176–77 (Tex. 2004); see City of San Antonio v.

City of Boerne, 111 S.W.3d 22, 25 (Tex. 2003). The plain language of Section 20.09 of the Texas

Business and Commerce Code excludes Telecheck from civil liability. TEX. BUS. & COM. CODE

ANN. § 20.09. Watson fails to cite to any authority in support of his argument that Telecheck is

liable under Section 20.09 as a ―consumer reporting agency,‖ and we find none. Therefore,

Telecheck is entitled to judgment as a matter of law on this cause of action.

       Further, nothing in Chapter 20 indicates that a collection and recovery entity, such as TRS,

falls under its purview and authority. See TEX. BUS. & COM. CODE ANN. §§ 20.01–.13.

       Accordingly, we affirm the summary judgment as to this cause of action.



                                                 5
(2)    Watson Did Not Plead a Cause of Action for Illegality of Contract

       Watson contends that the summary judgment was erroneous because Telecheck failed to

address his claim of illegality in its summary judgment motion and because genuine issues of

material fact exist regarding contract illegality.

       In its summary judgment motion, Telecheck directly addressed its affirmative defenses to

each cause of action stated in Watson’s fourth amended petition. A few days later, Watson timely

filed his fifth amended petition and his response to Telecheck’s motion. Telecheck’s motion does

not address any claim of illegality, and Watson argues that the fifth amended petition raised

illegality as a new cause of action.

       Watson claims his fifth amended petition alleges that Telecheck’s contracts are illegal and

that Telecheck did not address such allegations in its motion for summary judgment. Watson’s

response to Telecheck’s motion states, however, that:

       [Watson] has filed his FIFTH AMENDED ORIGINAL PETITION to alleviate
       [Telecheck’s] erroneous conclusions about the allegations of his action, and
       respectfully requests that the Court take judicial knowledge of [Watson’s]
       allegations therein, where causes of action are alleged for (1) per se defamation;
       (2) mental anguish and emotional distress; (3) violations of the Fair Credit
       Reporting Act; (4) violations of the Consumer Credit Reporting Agencies [sic] Act;
       and (5) exemplary damages for acting with malice and/or violating the aforesaid
       statutes.



                                                     6
By its plain language, Watson’s response unambiguously lists the causes of action he alleges in his

fifth amended petition, and the list does not include a claim that Telecheck’s contracts are illegal.

A party may not take a position on appeal that is inconsistent with its position in the trial court.

See Bulington v. State, 179 S.W.3d 223, 232–33 n.7 (Tex. App.—Texarkana 2005, no pet.) (citing

Litton Indus. Prod., Inc. v. Gammage, 668 S.W.2d 319, 321–23 (Tex. 1984)); Nebgen v. Minn.

Mining & Mfg. Co., 898 S.W.2d 363, 366 (Tex. App.—San Antonio 1995, writ denied); Stewart &

Stevenson Servs. v. Enserve, Inc., 719 S.W.2d 337, 341 (Tex. App.—Houston [14th Dist.] 1986,

writ ref’d n.r.e.). Watson cannot now complain that Telecheck failed to address a cause of action

that he failed to plead at trial. No issue of illegality of contract has been pled or ruled on.

Because the trial court did not expressly grant summary judgment on any such claim, we overrule

this point of error as moot.

(3)      Watson’s Allegation of Extrinsic Fraud Is an Evidentiary Issue Not Preserved for Appeal

         Watson alleges that Telecheck served him with its summary judgment motion and

intentionally removed Exhibits B and C to prevent him from knowing that Telecheck attached

evidence of his criminal history to their summary judgment evidence. Watson alleges that

complete copies, containing the ―missing‖ exhibits, were filed with the trial court. He argues that

Telecheck’s failure to include the missing pages in his copy of the motion amounts to extrinsic

fraud.

         Exhibit B to the motion for summary judgment consists of Watson’s ―First Amended and



                                                 7
Supplemented Plaintiff’s Answers and Objections to Telecheck Services, Inc. Request for

Interrogatories, Admissions and Production‖ and the various documents attached thereto.

Exhibit C consists of Watson’s ―First Amended and Supplemented Plaintiff’s Answers and

Objections to TRS Recovery Services, Inc. Request for Interrogatories, Admissions and

Production‖ and the various documents attached thereto. These two exhibits were, presumably,

items with which Watson was quite familiar, having prepared or produced these items himself.

        To preserve a complaint for our review, a party must have presented to the trial court a

timely request, objection, or motion that states the specific grounds for the desired ruling. See

TEX. R. APP. P. 33.1(a); State Dep’t of Highways & Pub. Transp. v. Payne, 838 S.W.2d 235, 241

(Tex. 1992) (op. on reh’g). If a party fails to do this, error is not preserved, and the complaint is

waived. See Bushell v. Dean, 803 S.W.2d 711, 712 (Tex. 1991) (op. on reh’g).

        Here, the final summary judgment was signed and filed September 10, 2009. Watson

objected to Telecheck’s proffered evidence four days later in a letter dated and filed September 14,

2009. Even if Watson’s allegations are taken as true, Watson knew or should have known that the

exhibits were missing for more than a month before the trial court’s summary judgment decision,

and he failed to inquire or object regarding their contents during that time. Further, Watson has

presented no argument or authority excusing his failure to make a timely objection. Because

Watson’s objection was not timely made, this issue was not preserved for our review. We

overrule this point of error.



                                                 8
(4)    There Is a Fact Issue Concerning Whether Watson Owed a Debt

       Watson argues that the summary judgment was erroneous because there is a material issue

of fact regarding the affirmative defense of truth asserted by the defense in contravention of the

defamation cause of action. The fact question here is whether Watson owed a debt, as was

allegedly uttered when Telecheck negatively listed Watson in its database or when its customers

accessed that database to check on Watson’s listed status.

       For a private individual to sustain a defamation claim, the plaintiff must prove that the

defendant: (1) published a false statement; (2) that was defamatory concerning the plaintiff;

(3) while acting with negligence regarding the truth of the statement. See WFAA-TV, Inc. v.

McLemore, 978 S.W.2d 568, 571 (Tex. 1998).

       When a check is presented to a merchant subscribing to Telecheck’s services, the merchant

scans the check and information from the check is transmitted to Telecheck for processing. If

Telecheck will warrant the check, the merchant receives only a single-digit numerical code

response of ―1,‖ effectively approving the individual’s check as payment. If the processing

reveals evidence the check maker has unpaid check-related debt, Telecheck will not warrant the

check and the merchant receives a single-digit numerical code response of ―4.‖

       Here, it is undisputed that Telecheck placed Watson on its negative database, refused to

warrant his checks, and responded to its inquiring merchants with a code ―4‖ regarding Watson,

because he had stopped payment on the Harrah’s check. By giving a code ―4‖ response,



                                                9
Telecheck informed subscribing merchants that Watson had unpaid check-related debt.

Therefore, to successfully assert truth in its summary judgment proceeding, Telecheck had the

burden of conclusively proving, through its summary judgment evidence, that Watson owed

unpaid check-related debt.

        Watson has consistently denied owing a debt related to the Harrah’s check, and he alleged

that he stopped payment on the check because Harrah’s confiscated the funds for which it was

written. In its motion for summary judgment, Telecheck acknowledged that the debt is in dispute

and failed to produce any evidence to the contrary. Because Telecheck has failed to conclusively

prove that Watson owed a check-related debt, we sustain Watson’s point of error on this issue.

(5)     There Is a Fact Issue Concerning Whether Defendants Had Actual Malice

        Watson also argues that the summary judgment on qualified privilege as a defense to his

defamation claim was improper because Telecheck failed to conclusively prove an absence of

malice.4

        A qualified privilege extends to statements made in good faith on a subject in which the

maker has an interest or duty, to another person having a corresponding interest or duty. Dixon v.

Sw. Bell Tel. Co., 607 S.W.2d 240 (Tex. 1980); Leatherman v. Rangel, 986 S.W.2d 759 (Tex.

App.—Texarkana 1999, pet. denied); Martin v. Sw. Elec. Power Co., 860 S.W.2d 197 (Tex.

App.—Texarkana 1993, writ denied). To establish a qualified privilege in a summary judgment


4
 Due to our ruling on this issue, we need not address Watson’s claim that the statements were made to persons not
having an interest or duty in the matter.

                                                       10
proceeding, the defendant has the burden to conclusively establish that the allegedly defamatory

statement was made in the absence of actual malice. Randall’s Food Mkts., Inc. v. Johnson, 891

S.W.2d 640, 646 (Tex. 1995); see also Dixon, 607 S.W.2d at 242. Malice means the defendant

made the defamatory statement with knowledge of its falsity or in reckless disregard as to its truth.

Thomas-Smith v. Mackin, 238 S.W.3d 503 (Tex. App.—Houston [14th Dist.] 2007, no pet.).

       In the absence of controverting evidence, an affidavit revealing the allegedly defamatory

statement’s sources as ―reliable, identified sources‖ and denying any doubts as to the truth of the

published statement is sufficient to negate actual malice, as a matter of law. Mitre v. La Plaza

Mall, 857 S.W.2d 752, 754 (Tex. App.—Corpus Christi 1993, writ denied); Johnson v. Sw.

Newspapers Corp., 855 S.W.2d 182, 187 (Tex. App.—Amarillo 1993, writ denied) (no

controverting evidence found, because plaintiff’s affidavit argued failure to investigate, rather than

actual malice).

       As part of its summary judgment evidence, Telecheck submitted the affidavit of Stephen

Moore stating that it purchased the check as warrantor pursuant to its contract with Harrah’s,

placed Watson in its database as someone having an unpaid debt because of the stop-payment

order, and that, at the time, it ―believed this statement to be true and had no reason to doubt its

veracity.‖ Here, however, in contrast to Johnson and similar cases, there is evidence in the record

that Watson repeatedly contacted Telecheck denying that he owed the debt and informing them

that Harrah’s confiscated the funds for which the check was written, thereby negating the debt



                                                 11
itself. So, here, there is evidence contradicting the defense affidavits. It is for the trier of fact to

resolve any dispute in the evidence as to the publication and the circumstances under which the

publication was made. See First State Bank of Lyford v. Parker, 28 S.W.2d 269 (Tex. Civ.

App.—San Antonio 1930, writ dism’d).

        Taking the evidence favorable to Watson as true and indulging every reasonable inference

in his favor, as we must, we find that Telecheck and TRS have failed to conclusively prove an

absence of actual malice because a material fact is in dispute. See Nixon, 690 S.W.2d at 548–49;

McNamara, 71 S.W.3d at 311. Therefore, we sustain Watson’s argument on this point.

(6)     There Is a Fact Issue Concerning When Watson’s Causes of Action Accrued

        Watson also contends that the summary judgment was erroneous because Telecheck and

TRS failed to prove that Watson’s suit was filed after the statutes of limitations had expired on his

claims of defamation, intentional infliction of emotional distress, and violations of the FDCPA.

        A suit for libel or slander must be brought within one year of the day the cause of action

accrues. TEX. CIV. PRAC. & REM. CODE ANN. § 16.002(a) (Vernon 2002). A claim for a

violation of the FDCPA must be brought ―within one year from the date on which the violation

occurs.‖ 15 U.S.C. § 1692k(d) (West, Westlaw 2010). A plaintiff must bring a claim for

intentional infliction of emotional distress within two years of the accrual of the cause of action.

TEX. CIV. PRAC. & REM. CODE ANN. § 16.003 (Vernon Supp. 2010); Patrick v. McGowan, 104

S.W.3d 219 (Tex. App.—Texarkana 2003, no pet.).



                                                  12
         The discovery rule is a very limited exception to statutes of limitations and applies only in

those cases in which the nature of the injury is both inherently undiscoverable and objectively

verifiable. Wagner & Brown, Ltd. v. Horwood, 58 S.W.3d 732, 734 (Tex. 2001). The discovery

rule exception operates to defer the accrual of a cause of action until the plaintiff knows, or in the

exercise of reasonable diligence should know of the facts giving rise to the claim. 5 Id. A

defendant moving for summary judgment must prove that there is no genuine issue of material fact

as to when a plaintiff discovers or should have discovered his or her cause of action. See KPMG

Peat Marwick v. Harrison County Housing Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999).

         Here, it is undisputed that, on or about August 4, 2003, Telecheck put Watson in its

database as a person with unpaid, check-related debt. Nothing in the summary judgment record,

however, establishes how Watson knew or should have known of the event at that time. In

responses to discovery, Watson admitted that he had at least one check declined in each of 2003,

2004, and 2005. The summary judgment record is silent as to whether the merchants declining

those checks subscribed to Telecheck’s services or whether the merchants declined to accept the

checks because of a communication from Telecheck, not to mention whether Watson knew of any

linkage to Telecheck in those events.6 It is true that Watson was asked during a previous hearing,

―I think you’ve testified earlier that you’ve known that you’ve been on the check data base for


5
 While he does not explicitly state as much, Watson’s arguments on this issue invoke the discovery rule.
6
 In his brief, Watson argues that he had a check declined February 10, 2006, and that his cause of action could not have
accrued before that date. As conceded in Telecheck’s brief, however, that date is not supported by the summary
judgment record and was not before the trial court for consideration at the time of the summary judgment ruling.

                                                          13
some time now, about four years, right?‖ Watson replied, ―That’s correct.‖ Unclear from that

exchange is whether Watson is testifying that he has known of Telecheck’s negative listing for

four years or whether he now knows that he has been on Telecheck’s list for four years.

        We must indulge every reasonable inference in Watson’s favor, and we find that a

reasonable trier of fact could determine that Watson could not have reasonably known of

Telecheck’s listing until a later date within the applicable statute of limitations. See Nixon, 690

S.W.2d at 548–49; McNamara, 71 S.W.3d at 311. Therefore, a material issue of fact exists

concerning when Watson knew or should have known facts that would cause limitations to begin

running against his causes of action. Accordingly, we sustain Watson’s assertions on this point.7

        Accordingly, as to Watson’s alleged causes of action under the Consumer Credit Reporting

Act and for extrinsic fraud, we affirm the summary judgment in favor of defendants; as to

Watson’s point of error for illegality of contract, we overrule it as moot; and, as to all other causes


7
 Laches does not apply here. Generally, in order to establish a laches defense, the defendants must show (1) the
plaintiffs unreasonably delayed in asserting their claim, and (2) the defendants have detrimentally changed their
position because of the delay. Wayne v. A.V.A. Vending, Inc., 52 S.W.3d 412, 415 (Tex. App.—Corpus Christi 2001,
pet. denied); Green v. Parrack, 974 S.W.2d 200, 203 (Tex. App.—San Antonio 1998, no pet.). The contours of the
defense of laches have been described as follows:

        The application of laches, however, is usually limited to cases arising out of equity or actions at law
        that are essentially equitable in character. Furthermore, this Court has held ―laches . . . [is]
        peculiarly available against the assertion of equitable rights, and may not be invoked to resist the
        enforcement of a purely legal right.‖

Wayne, 52 S.W.3d at 415 (citations omitted).
         The present case involves contractual claims and causes of action for defamation, emotional distress, and
statutory violations—all legal rights. Watson has a complete, adequate, legal remedy in the form of a suit for
damages. Here, Watson seeks only a legal remedy, money damages. This is a claim based in law, no specific
performance or injunctive relief is requested. We conclude that the defense of laches does not apply in this case.

                                                         14
of action asserted by Watson, we reverse the summary judgment and remand this cause to the trial

court for further proceedings.



                                                   Josh R. Morriss, III
                                                   Chief Justice

Date Submitted:       August 9, 2010
Date Decided:         October 21, 2010




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