                                           OPINION
                                       No. 04-11-00339-CV

                                        DODEKA, L.L.C.,
                                           Appellant

                                                 v.

                                          Irma CAMPOS,
                                             Appellee

                      From the County Court at Law, Val Verde County, Texas
                                  Trial Court No. CV10023CAL
                          Honorable Sergio J. Gonzalez, Judge Presiding

Opinion by:       Sandee Bryan Marion, Justice

Sitting:          Sandee Bryan Marion, Justice
                  Phylis J. Speedlin, Justice
                  Marialyn Barnard, Justice

Delivered and Filed: May 2, 2012

REVERSED AND RENDERED IN PART, REVERSED AND REMANDED IN PART

           In an opinion and judgment dated December 21, 2011, we reversed and rendered in part,

and reversed and remanded in part. Appellee, Irma Campos, filed a motion for rehearing. We

deny Campos’s motion; however, we withdraw our opinion and judgment of December 21, 2011,

and issue this opinion and judgment in its place. Appellant, Dodeka, L.L.C., sued Campos for

breach of contract based on an unpaid credit card account issued by Chase Bank to Campos.

Campos filed an answer and verified denial to the lawsuit. Campos also filed a counterclaim
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alleging Dodeka violated the federal Fair Debt Collections Practices Act (hereinafter “FDCPA”)

by threatening to and actually filing a suit time-barred by the four-year statute of limitations.

Following a bench trial, the trial court rendered a take-nothing judgment against Dodeka. The

trial court found in favor of Campos on her counterclaim. Dodeka appeals the trial court’s

judgment. We reverse and render in part, and reverse and remand in part.

                                STATUTE OF LIMITATIONS

       Dodeka contends the trial court erred in concluding it filed suit beyond the four-year

statute of limitations.   Dodeka challenges many of the trial court’s findings of fact and

conclusions of law pertaining to Campos’s counterclaim under the FDCPA.              For example,

Finding of Fact 8 states the trial court found Dodeka filed suit “more than four (4) years after the

breach.” Conclusion of Law 12 states that “Plaintiff’s suit was time barred . . . and violated the

[FDCPA] . . . .”

       If a trial court makes findings of fact and conclusions of law, we may review the fact

findings for legal and factual sufficiency. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d

789, 794 (Tex. 2002). If there is more than a scintilla of evidence to support the finding, the no-

evidence challenge fails. Id. at 795. We reverse the ruling for factual insufficiency of the

evidence only if the ruling is so against the great weight and preponderance of the evidence as to

be manifestly erroneous or unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). We review

de novo the trial court’s legal conclusions based on the findings of fact to determine their

correctness. BMC Software, 83 S.W.3d at 794. If we determine a conclusion of law is erroneous

but the trial court nevertheless rendered a proper judgment, the erroneous conclusion does not

require reversal. Id.




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       Prior to Dodeka’s lawsuit, Campos had a credit card account with Chase Bank. On

December 23, 2005, Campos made her last payment on the account in the required minimum

amount. On April 7, 2006, Campos resumed making payments for several months, but these

payments were less than the minimum monthly amount required by Chase. She made her final

payment on September 15, 2006. After purchasing the account from Chase Bank, Dodeka did

not file suit on this account until March 15, 2010. The trial court found Campos breached her

contract with Chase on January 22, 2006 (thirty days after her last minimum monthly payment

on December 23, 2005), when she failed to make her next minimum monthly payment.

Accordingly, the trial court concluded Dodeka filed suit outside the four-year statute of

limitations. Dodeka asserts its lawsuit was timely-filed because the breach did not occur until

sometime after Campos made her final payment on September 15, 2006.

A. Breach of Contract vs. Open Account

       Dodeka filed suit against Campos alleging breach of contract, and this was the only claim

against Campos at trial. However, on appeal, Dodeka urges this court to treat the action as a suit

on an open account. Dodeka argues that although it did not include an open account claim in its

pleadings, it was nevertheless tried as an open account because Campos impliedly consented to

that action. We disagree with Dodeka.

       We find nothing in the record to suggest the suit was tried by consent as a suit on an open

account. Additionally, Dodeka did not bring this action as an open account in any of the

pleadings to the trial court. Cf. LTD Acquisitions, LLC v. Cook, No. 04-10-00296-CV, 2011 WL

61634, at *2 (Tex. App.—San Antonio Jan. 5, 2011, no pet.) (determining that although LTD did

not originally plead the claim as an open account, it did so in its motion to reconsider filed with

the trial court, thus allowing appellate review on the open account claim). As a result, we must



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next consider whether the statute of limitations had already expired by the time Dodeka brought

its breach of contract claim.

B. Statute of Limitations

        The statute of limitations on a claim for debt based on breach of contract is “four years

after the day the cause of action accrues.” TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(a)(3)

(West 2002); Williams v. Unifund CCR Partners Assignee of Citibank, 264 S.W.3d 231, 234

(Tex. App.—Houston [1st Dist.] 2008, no pet.). In Williams, the credit card debtor, Williams,

stopped making payments and his account was closed by Citibank on January 12, 2001.

264 S.W.3d at 232–33. However, Williams made several payments after this date, with his final

payment on October 15, 2001. Id. Unifund purchased the account from Citibank in June 2005.

Id. Williams argued that because Unifund did not file suit until August 19, 2005, the statute of

limitations barred Unifund’s breach of contract claim. Id. at 234. The court held the date of the

last payment on October 15, 2001 was when the cause of action for breach of contract accrued.

Id. The court concluded Unifund filed suit within the four-year statute of limitations for a breach

of contract claim. Id.

        Here, it is undisputed that Campos made her last payment in the required minimum

amount on December 23, 2005. However, she continued to make periodic payments until

September 15, 2006, which was the date of her final payment. Because Dodeka’s suit was for

breach of contract, as in Williams, we cannot say as a matter of law that the cause of action

accrued on January 22, 2006. 1 Instead, we conclude that, at the earliest, the date of the last


1
  On rehearing, Campos argues Williams is distinguishable from this appeal because, unlike here, in Williams there
was no contract that defined when a breach occurred and Unifund did not specify a theory of recovery in its motion
for summary judgment. Therefore, Campos concludes, the Williams court used its “judicial discretion” to select the
date Williams ceased making payments as the date of breach. We disagree with Campos’s reading of Williams. The
Williams court treated Unifund’s claim as one for breach of contract and, because the lawsuit was filed within four
years of the last payment, the court concluded Unifund’s claim was timely. 264 S.W.3d at 234. Here, the credit
card agreement between Chase and Campos states: “We may consider you to be in default if any of these occurs

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payment (September 15, 2006) determined the accrual date for purposes of the statute of

limitations. Because this action commenced on March 15, 2010, Dodeka brought suit within the

four-year statute of limitations. Accordingly, the trial court erred in concluding Dodeka violated

the FDCPA.

        EVIDENTIARY CHALLENGE TO BUSINESS RECORDS AFFIDAVIT
                  UNDER TEXAS RULE OF EVIDENCE 803(6)

        In support of its claim against Campos, Dodeka offered into evidence an Affidavit of

Assignment, Damages, and Business Records signed by Holly Chaffin. Attached to the affidavit

were business records obtained by Dodeka from Chase. 2 Campos raised a hearsay objection and

argued that the documents attached to Chaffin’s affidavit were not admissible because both the

affidavit and the documents were untrustworthy. The trial court found Dodeka did not lay a

sufficient predicate to admit the documents into evidence under the Texas Rules of Evidence and

excluded the affidavit and attached records. As a result, with no evidence to support Dodeka’s

claim, the trial court rendered a take-nothing judgment against Dodeka. On appeal, Dodeka

contends the trial court abused its discretion by failing to admit these records into evidence.

        We review the exclusion of evidence under an abuse of discretion standard. McEwen v.

Wal–Mart Stores, Inc., 975 S.W.2d 25, 27 (Tex. App.—San Antonio 1998, pet. denied). Abuse

of discretion is found when a trial court acts without reference to any guiding rules or principles.

Garcia v. Martinez, 988 S.W.2d 219, 222 (Tex. 1999). We will uphold the trial court’s ruling on


. . . . If we consider your account to be in default, we may close your account without notice and require you to pay
your unpaid balance immediately. We may also require you to pay interest at the rate of two percent (2%) a month
on the unpaid balance when we deem your account to be six or more billing cycles past due.” (Emphasis added.)
Chase did not exercise its right to consider Campos in default when she failed to make her next minimum payment
on January 22, 2006. Instead, the account remained open for her continued use and she continued to make payments
until September 15, 2006.
2
 The records attached to Chaffin’s affidavit include: (1) the credit card member agreement between Chase and
Campos; (2) a document indicating Dodeka purchased Campos’s account; (3) eighteen monthly Chase statements,
dating from August 2005 through January 2007; and (4) Dodeka’s demand letter to Campos.


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the exclusion of evidence if there is any legitimate basis for the ruling.            Owens-Corning

Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998).

       A proponent of hearsay must bear the burden of showing that testimony fits within an

exception to the general rule prohibiting admission of the hearsay evidence. Volkswagen of Am.,

Inc. v. Ramirez, 159 S.W.3d 897, 908 n.5 (Tex. 2004); see also TEX. R. EVID. 802. A business

record that contains information concerning activity that is regularly conducted is one exception.

TEX. R. EVID. 803(6) (stating that “[a] . . . record . . . made at or near the time by, . . . a person

with knowledge, if kept in the course of a regularly conducted business activity, and if it was the

regular practice of that business activity to make the . . . record . . . ” is not excluded as hearsay).

The business records may also be “admissible in evidence in any court in this state upon the

affidavit of [a] person” that can satisfy the requirements of Rule 803(6). Id. R. 902(10), 803(6).

        Additionally, a business record created by one entity that later becomes another entity’s

primary record is still admissible as a record of regularly conducted activity under Rule 803(6).

Martinez v. Midland Credit Mgmt., Inc., 250 S.W.3d 481, 485 (Tex. App.—El Paso 2008, no

pet.). However, documents received from another entity are not admissible under Rule 803(6), if

the sponsoring witness is not qualified to testify about the other entity’s record keeping. Id. A

witness is qualified to testify about the documents of another entity if it can be established the

documents were kept in the ordinary course of business and the documents formed the basis for

the ongoing transactions. Abrego v. Harvest Credit Mgmt. VII, LLC, No. 13-09-00026-CV, 2010

WL 1718953, at *3 (Tex. App.—Corpus Christi-Edinburg Apr. 29, 2010, no pet.) (mem. op.).

       Campos contends Chaffin did not have sufficient personal knowledge to attest to Chase’s

business records because Dodeka is a third party who purchased the account and was not the

original author of the documents. Further, Campos argues that Chaffin is not qualified to testify



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about Chase’s documents because she did not indicate that she or anyone from Dodeka knew of

the events or conditions recorded in Chase’s records or had knowledge of the manner in which

Chase prepared the documents. But, “a record may be ‘made’ by a business although it was

initially authored by a different business.” Simien v. Unifund CCR Partners, 321 S.W.3d 235,

244 (Tex. App.—Houston [1st Dist.] 2010, no pet.). Personal knowledge by a third party of the

procedures used in preparing the original documents is not required when the documents are

incorporated into the business of the third party, are relied upon by the third party, and there are

other indicators of reliability. Id. (citing Air Land Forwarders, Inc. v. United States, 172 F.3d

1338, 1343 (Fed. Cir. 1999)).

       Thus, in order to introduce business records authored or created by a third party, the

proponent must establish three factors: (a) the document is incorporated and kept in the course of

the testifying witness’s business; (b) that business typically relies upon the accuracy of the

contents of the document; and (c) the circumstances otherwise indicate the trustworthiness of the

document. Id. at 240-41.

       In her affidavit, Chaffin recited she was “personally acquainted with the facts” stated in

the affidavit and that they are “true and correct.” Her affidavit further states she is the custodian

of Dodeka’s records, and that she is familiar with how these records are prepared and

maintained. She states that she reviewed the file, that she is the designated agent for the records,

she has personal knowledge of Campos’s account concerning this claim, she has maintained

these files under her control and supervision, and that Campos’s account remains unpaid. The

affidavit explains how Dodeka acquired Campos’s account, and the affidavit indicates Dodeka’s

records, which include Campos’s credit account, were “made at or near the time or reasonably

soon after the act” by an employee “with knowledge of the act [or] event.” In referencing the



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numerous pages of records attached to her affidavit, Chaffin states Dodeka acquired the records

from Chase Bank, USA, N.A. Further, Chaffin’s affidavit states the documents are kept “in the

regular course of business” and incorporated into Dodeka’s business practices.             Dodeka

produced evidence that it reasonably relied on the accuracy of the documents to determine the

existence and value of Campos’s debt that is now due to Dodeka. Chaffin attests to Dodeka’s

reliance on the accuracy of the records created by Chase in her affidavit. We conclude Chaffin’s

affidavit sufficiently shows Dodeka incorporated the Chase records into its regular and daily

business use, and Dodeka reasonably relied upon the accuracy of the documents it received from

Chase in order to determine the existence and value of Campos’s debt that is now due to Dodeka.

       Finally, Campos contends the records themselves are untrustworthy. However, we note

that the creator of the documents, Chase, must keep careful records of its customer’s accounts,

otherwise its “business would greatly suffer or even fail.” Id. at 244 (quoting Harris v. State,

846 S.W.2d 960, 964 (Tex. App.—Houston [1st Dist.] 1993, writ ref’d)). Furthermore, if Chase

failed to keep accurate records, it could face criminal or civil penalties. Id.; see also TEX. FIN.

CODE ANN. § 392.304(a)(8) (West 2006) (prohibiting consumer debt misrepresentation); TEX.

FIN. CODE § 392.402 (providing criminal penalties for violations of Chapter 392 of the Texas

Finance Code). We believe these circumstances lend support to Dodeka’s claim that the Chase

documents are trustworthy.

       For these reasons, we conclude the trial court erred when it sustained Campos’s objection

to Chaffin’s affidavit and the attached records. Therefore, we next determine whether the error

probably caused the rendition of an improper judgment. See TEX. R. APP. P. 44.1(a)(1) (when

trial court errs, we reverse only if the error probably caused the rendition of an improper

judgment); Bay Area Healthcare Grp., Ltd. v. McShane, 239 S.W.3d 231, 234 (Tex. 2007)



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(same).     In order to show harm from an evidentiary ruling, the complaining party must

demonstrate the judgment turns on the particular evidence denied by the trial court.           See

McShane, 239 S.W.3d at 234. Because its documents were not admitted into evidence, Dodeka

was prevented from presenting its case against Campos. Therefore, the error probably caused the

rendition of an improper judgment. See TEX. R. APP. P. 44.1(a)(1).

                                          CONCLUSION

          Because the statute of limitations had not yet expired when Dodeka filed suit, we reverse

the trial court’s judgment on Campos’s counterclaim under the FDCPA and render a take-

nothing judgment in favor of Dodeka on that claim. Because we conclude the trial court erred by

not admitting Dodeka’s business records into evidence, we reverse the take-nothing judgment

against Dodeka and remand this cause to the trial court for further proceedings as to Dodeka’s

claim for breach of contract.




                                                  Sandee Bryan Marion, Justice




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