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


                        No. 06-18-00013-CV



ROBYN DALE MURPHY, JR., AKA ROBIN DALE MURPHY, JR., Appellant

                                 V.

                EXETER FINANCE CORP., Appellee



            On Appeal from the County Court at Law No. 2
                        Gregg County, Texas
                 Trial Court No. 2016-2095-CCL2




            Before Morriss, C.J., Moseley and Burgess, JJ.
                    Opinion by Justice Moseley
                                           OPINION
       After entering into a written contract to purchase a truck, Robyn Dale Murphy, Jr., aka

Robin Dale Murphy, Jr., sued Exeter Finance Corporation, raising claims for usury, deceptive trade

practices, and breach of contract based on allegations that Exeter charged or received interest

exceeding the legally allowable rate. Exeter denied the allegations and filed special exceptions, a

traditional motion for summary judgment, and a no-evidence motion for summary judgment.

Murphy responded with his own motion for summary judgment. The trial court denied Murphy’s

motion for summary judgment and granted both Exeter’s traditional and no-evidence motions for

summary judgment.

       On appeal, Murphy contends that the trial court erred in granting Exeter’s motions for

summary judgment as to his claims that Exeter had committed usury, had engaged in deceptive

trade practices, and had breached its contract with him. Murphy also argues that the trial court

erred in denying his motion for summary judgment (including his claim to recover attorney fees)

and in granting attorney fees to Exeter.

       We reverse the trial court’s award of attorney fees to Exeter because the fees were not

incurred to enforce the contract, but we otherwise affirm the trial court’s judgment because

Murphy failed to produce more than a scintilla of evidence in support of his claims for usury,

deceptive trade practices, and breach of contract.

I.     Factual and Procedural Background

       On or about June 26, 2014, Murphy entered into a written Retail Sales Contract, Simple

Finance Charge Agreement with Excel Pre-Owned Super Center to purchase a 2011 Dodge Ram


                                                 2
1500 truck. Excel assigned the contract to Exeter. Murphy paid $17,330.00 for the truck, making

a $1,000.00 down payment with the remaining principal amount of $16,330.00 to be financed at

an equivalent rate of 20.6%, resulting in a total finance charge of $12,406.64 if all payments were

timely and fully made, for a total sales price of $29,736.64. Murphy agreed to make seventy-two

payments of $399.12 beginning on August 5, 2014. All of this was set out in the contract, to which

Murphy agreed by affixing his signature.

         On December 29, 2016, Murphy filed suit against Exeter1 alleging that Exeter demanded,

charged, and/or received usurious interest. He alleged that this action rendered Exeter liable for

penalties for having practiced usury and for deceptive trade practices under Sections 17.46,

subsections (b)(5) and (12), of the Texas Business and Commerce Code (the Deceptive Trade

Practices Act (DTPA)), in addition to having breached the contract with Murphy. Exeter filed a

denial and special exceptions. Thereafter, Exeter filed a no-evidence motion for summary

judgment and a traditional motion for summary judgment, both of which included a claim to

recover attorney fees. Attached to the motions were a copy of the original contract signed by

Murphy, a schedule setting out Murphy’s payment history (this also showing the allocation of each

such payment), a copy of the Motor Vehicle Rate Chart issued by the Texas Office of Consumer

Credit Commissioner, and an affidavit from Exeter’s attorney which buttressed the claim for

attorney fees. The attorney’s affidavit claimed “that the attorney’s fees and expenses in the amount

of $5,550.00 is a reasonable fee for the services rendered in pursuing this claim” and that



1
 The petition also named Excel as a defendant, but Murphy later nonsuited his claims against Excel, leaving Exeter as
the sole defendant.
                                                         3
       [i]n the event this matter is appealed to The Court of Appeals, it is [the attorney’s]
       opinion that $7,500.00 is a reasonable and necessary fee. In the event a writ of
       error is filed in the Texas Supreme Court, it is [the attorney’s] opinion that
       $5,500.00 is a reasonable and necessary fee. In the event a writ of error is granted,
       it is [the attorney’s] opinion that $5,500.00 is a reasonable and necessary fee.

Murphy filed a response to Exeter’s motions and a traditional motion for summary judgment,

arguing that the copy of the original contract and the payment schedule, together with the evidence

attached to his motion, supported and conclusively proved his claims. The trial court granted

Exeter’s motions for summary judgment and denied Murphy’s motion. Murphy filed this appeal.

II.    Is There Evidence to Support Murphy’s Claims for Usury?

       In his first three points of error, Murphy contends that the trial court erred in granting

Exeter’s no-evidence motion for summary judgment as to his claims of usury, claimed violations

of the DTPA, and allegations that Exeter had breached the contract.

       We review a trial court’s summary judgment de novo. Travelers Ins. Co. v. Joachim, 315

S.W.3d 860, 862 (Tex. 2010). “When a party moves for summary judgment on both no-evidence

and traditional grounds, the appellate court should ordinarily address the no-evidence grounds

first.” Burleson v. Lawson, 487 S.W.3d 312, 317 (Tex. App.—Eastland 2016, no pet.) (citing

Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013)).

       A no-evidence summary judgment is essentially a pretrial directed verdict. Therefore, we

apply the same legal sufficiency standard in reviewing a no-evidence summary judgment as we

apply in reviewing a directed verdict. Wal-Mart Stores, Inc. v. Rodriguez, 92 S.W.3d 502, 506

(Tex. 2002). We must determine whether Murphy produced any evidence of probative force to

raise a fact issue on the material questions presented. See id.; Woodruff v. Wright, 51 S.W.3d 727,

                                                 4
734 (Tex. App.—Texarkana 2001, pet. denied).                         Murphy will defeat Exeter’s no-evidence

summary judgment motion if Murphy presented more than a scintilla of probative evidence on

each element of its claim. See King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003);

Rhine v. Priority One Ins. Co., 411 S.W.3d 651, 657 (Tex. App.—Texarkana 2013, no pet.). “More

than a scintilla of evidence exists when the evidence rises to a level that would enable reasonable

and fair-minded people to differ in their conclusions.” Crocker v. Babcock, 448 S.W.3d 159, 163

(Tex. App.—Texarkana 2014, pet. denied) (citing Merrell Dow Pharms., Inc. v. Havner, 953

S.W.2d 706, 711 (Tex. 1997)). “Less than a scintilla of evidence exists when the evidence is ‘so

weak as to do no more than create a mere surmise or suspicion of a fact.’” Id. (quoting King

Ranch, Inc., 118 S.W.3d at 751). During our analysis, “we review the evidence in the light most

favorable to the non-movant, credit evidence favorable to that party if reasonable jurors could, and

disregard contrary evidence unless reasonable jurors could not.” Sage v. Howard, 465 S.W.3d

398, 402 (Tex. App.—El Paso 2015, no pet.) (citing Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572,

582 (Tex. 2006); King Ranch, Inc., 118 S.W.3d at 751).

            Murphy’s petition contends that Exeter committed usury, violated the DTPA, and breached

the contract by charging him interest over and above the 20.6% agreed to in the contract and by

applying his payments primarily or entirely to accrued interest rather than his principal balance. 2

In order to determine whether the evidence Murphy produced has merit sufficient to overcome

Exeter’s no-evidence motion for summary judgment, we must first examine the applicable law and

Exeter’s application of that law to this transaction.


2
    Murphy does not argue that the contract itself or the contract-specified finance rate of 20.6% is usurious.
                                                              5
         If one looks only at the usury laws that prevail in Texas, Murphy’s claim might have some

merit. However, the applicable laws do not fit so neatly into one box. The motor vehicle

installment contract Murphy entered into is governed by Chapter 348 of the Texas Finance Code.

See TEX. FIN. CODE ANN. §§ 348.0015(a), 348.007(d) (West 2016). Under the contract signed by

Murphy, he was not charged interest, but rather, a time price differential3 (a daily finance charge

in addition to the principal) of $12.50 per $100.00 per year on the principal balance which, over

seventy-two months, is the equivalent of the 20.6% annualized percentage rate specified in the

contract.4     See TEX. FIN. CODE ANN. § 348.104(d) (West 2016); 7 TEX. ADMIN. CODE

§ 84.201(d)(2)(B)(iii) (West, West current through July 27, 2018) (Office of Consumer Credit

Comm’r, Time Price Differential).

         Under the terms of the contract, Murphy was assessed a daily finance charge (the amount

of which is determined by using the true daily earnings method that is based on the annualized

percentage rate and the outstanding principal balance divided by the 365 days in a year: $16,330

x 20.6% = $3,368.98 ÷ 365 = $9.21638 per day). See 7 TEX. ADMIN. CODE § 84.201(b), (d)(3)(A)

(West, West current through July 27, 2018) (Office of Consumer Credit Comm’r, Time Price


3
 A time price differential is not interest. Interest is “compensation for the use, forbearance, or detention of money.
The term does not include time price differential, regardless of how it is denominated.” TEX. FIN. CODE ANN.
§ 301.002(a)(4) (West 2016). A time price differential is “an amount, however denominated or expressed,” that is
added to the sales price, principal amount, or amount financed “paid or payable to the seller by the purchaser for the
privilege of paying the offered sales price after the time of sale,” such as through a retail installment contract. TEX.
FIN. CODE ANN. § 301.002(a)(16) (West 2016), § 348.001(9) (West Supp. 2017).

4
 The Texas Office of Consumer Credit Commissioner conveniently calculates the equivalent annualized percentage
rates based on the allowable add-on rate specified in Section 348.104, the model of the vehicle, the year of purchase,
and the number of payments. TEXAS OFFICE OF CONSUMER CREDIT COMMISSIONER, CURRENT MOTOR VEHICLE RATE
CHART (2018), https://occc.texas.gov/industry/motor-vehicle-sales-finance-mvsf/rate-charts; TEXAS OFFICE OF
CONSUMER CREDIT COMMISSIONER, SUPPLEMENT TO MOTOR VEHICLE RATE CHART (2018),
https://occc.texas.gov/industry/motor-vehicle-sales-finance/rate-charts/supplement.
                                                           6
Differential). Under this formula, the $9.21638 daily finance charge accrued every day from the

day after the contract was signed until a payment sufficient to reduce the principal was made. If

the seventy-two scheduled payments of $399.12 were made in full and on time, the principal would

slowly decrease, which under the above formula, would result in a lower daily finance charge each

successive month. See 7 TEX. ADMIN. CODE § 84.201(d)(3)(A), (E)(i) (West, West current through

July 27, 2018) (Office of Consumer Credit Comm’r, Time Price Differential). However, the

contract clearly stated that payments would be applied first to “earned but unpaid finance charge”

then “to anything else [Murphy] owe[d] under [the] Agreement,” explaining, “If you do not timely

make all your payments in at least the correct amount, you will have to pay more Finance Charge”

and, “If you make scheduled payments early, your Finance Charge will be reduced (less). If you

make your scheduled payments late, your Finance Charge will increase.” See 7 TEX. ADMIN. CODE

§ 84.201(d)(3)(E)(i) (Office of Consumer Credit Comm’r, Time Price Differential).

         As mentioned previously, Murphy attached the following to his response to Exeter’s no-

evidence motion for summary judgment: (a) a statement of account from Exeter showing his

payments from August 2014 through March 2016, and the allocation of each payment toward

finance charge5 and toward principal; (b) a list of calculations listing how much of each payment

was allocated to the finance charge versus the 20.6% of each payment Murphy alleges should have

been allocated thereto; and (c) Murphy’s affidavit alleging, in part, that Exeter told him that he

“had to pay all interest first before any principal payments would be credited to [his] account.”


5
 Even though the statement of account labels the allocation for a finance charge as “interest,” this is not an interest-
based transaction, and a time price differential, no matter how it is denominated or what it is called, is not interest.
See TEX. FIN. CODE ANN. § 301.002(a)(4), (16) (West 2016), § 348.001(9); 7 TEX. ADMIN. CODE § 84.201(b),
(d)(3)(A) (Office of Consumer Credit Comm’r, Time Price Differential).
                                                           7
       Murphy’s first payment of $399.12 as prescribed in the contract was due on August 5,

2014. The finance charge accrued from June 27, 2014, through the scheduled date of Murphy’s

first payment at a rate of $9.21638 per day. To determine if any payment or allocation shown in

the statement of account amounts to evidence of usury in violation of Chapter 348 of the Texas

Finance Code, we examine several of the payments and allocations listed in the statement. That

examination reveals the following:

1.     On August 12, 2014 (seven days after his scheduled payment as set out in the contract was
       to be made), Murphy paid $400.00. As of that date, Murphy owed $433.17 in accrued
       finance charge (47 days x $9.21638 = $433.17). As per the terms of the contract, because
       the payment was less than the total accrued finance charges, his payment was allocated
       entirely to the finance charges, leaving a balance of $33.17 in unpaid finance charges.

2.     Murphy failed to pay the scheduled September 5, 2014 payment. On October 11, 2014
       (sixty days after the August payment under the contract was made), Murphy paid another
       $400.00. As of that date, Murphy owed $586.15 in accrued and carried-over, unpaid
       finance charge (60 x $9.21638 = $552.98 + $33.17 = $586.15). His payment of $400.00
       was allocated entirely to finance charges, leaving a balance of $186.15 in unpaid finance
       charges.

3.     Murphy failed to make the payment prescribed under the contract to be paid on November
       5, 2014. On December 11, 2014 (sixty days after the payment prescribed in the contract to
       have been paid in October), Murphy paid $890.05. As of that date, Murphy owed $748.35
       in accrued and carried-over, unpaid finance charge (60 x $9.21638 = $562.20 + $186.15 =
       $748.35). Because his payment exceeded the total finance charges, $141.70 was allocated
       to the principal balance ($890.05 - $748.35 = $141.70), reducing the principal from
       $16,330 to $16,188.30. Because the principal balance was reduced, the daily finance rate
       was reduced to $9.13641 ($16,188.30 x 20.6% = $3,334.79 ÷ 365 = $9.13641).

4.     On December 22, 2014, eleven days after his previous payment, Murphy paid $140.00. As
       of that date, Murphy owed $100.50 in finance charges (11 x $9.13641 = $100.50). Because
       his payment exceeded the accrued finance charges, $39.50 was allocated to the principal
       balance ($140.00 - $100.50 = $39.50), reducing the principal from $16,188.30 to
       $16,148.80, this reducing the daily finance rate to $9.114117 ($16,148.80 x 20.6% =
       $3,326.6528 ÷ 365 = $9.114117).


                                               8
The numerous remaining payments and allocations shown in the statement of account are

consistent in formulation and allocation with those detailed hereinabove.

       Here, the finance charges and allocations shown in the statement of account follow the

provisions of the contract as well as the rates and mathematical formulas and allocations authorized

by Chapter 348 of the Texas Finance Code. See TEX. FIN. CODE ANN. § 348.104 (West 2016);

7 TEX. ADMIN. CODE § 84.201(d)(3)(A), (E)(i) (Office of Consumer Credit Comm’r, Time Price

Differential). Murphy’s list of calculations is apparently based on a misunderstanding of the

transaction and the law governing it. Therefore, Murphy’s list of calculations is inaccurate and is,

therefore, not probative evidence. Similarly, Murphy’s affidavit is not evidence of sufficient

probative force to raise a fact issue on any material question, because the terms of the contract

specify that payments will first be allocated to accrued but unpaid finance charges with any

remainder being allocated to the principal. This is in accord with Section 84.201(d)(3)(A) of the

Texas Administrative Code. Therefore, even granting all inferences in Murphy’s favor, we find

that the statement of account, Murphy’s listed calculations, and his affidavit fail to present any

evidence of probative value to support his usury claim against Exeter. Accordingly, we overrule

this point of error and affirm the trial court’s judgment granting Exeter’s no-evidence motion for

summary judgment as to Murphy’s usury claim.

       Murphy’s DTPA causes of action pursuant to Section 17.65, subsection (b)(5) and (12), of

the Texas Business and Commerce Code are based on his claims that in violation of the contract,

Exeter demanded, charged, and/or received usurious interest and committed the “usury frequent

practice of applying monthly payments illegally to interest, with frequent, if not all, payments

                                                 9
never being credited properly to reduction of principal.” Similarly, Murphy argues that Exeter

violated the terms of the contract because “Exeter charges, collects, and receives usurious interest”

and “immediately applies [his] payments to alleged accrued and unpaid interest, and not finance

charges.” However, as detailed hereinabove, Murphy has produced no evidence of probative force

that Exeter charged Murphy interest, assessed him finance charges in excess of the rates agreed to

in the contract or the statutory rates of Chapter 438 of the Finance Code, or allocated Murphy’s

payments in a manner that violated either the contract or Texas law. Therefore, we overrule his

second and third points of error and affirm the trial court’s grant of Exeter’s no-evidence motion

for summary judgment as to Murphy’s DTPA and breach of contract claims.

III.   Was Exeter Entitled to an Award of Attorney Fees?

       In granting Exeter’s no-evidence motion for summary judgment, the trial court awarded

Exeter $5,500.00 in attorney fees and expenses, as well as conditional awards in the event of

successful appeals to the court of appeals and the Texas Supreme Court. In his final point of error,

Murphy contends that the trial court erred in awarding Exeter attorney fees.

       Whether a party is entitled to recover attorney fees is a question of law that we review

de novo. Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 94 (Tex. 1999) (per curiam). In Texas,

attorney fees may not be recovered from an opposing party unless they are authorized by statute

or by contract between the parties. Id. at 95; Travelers Indem. Co. of Conn. v. Mayfield, 923

S.W.2d 590, 593 (Tex. 1996). No statute allows attorney fees to be awarded for successfully

prosecuting a no-evidence motion for summary judgment, so they must be authorized by the



                                                 10
contract for the trial court’s award to be proper. Exeter contends that the language of the contract

signed by Murphy entitles it to an award of attorney fees, and the relevant contract provision states:

          If [Exeter] hire[s] an attorney who is not [its] employee to enforce this contract,
          [Murphy] will pay reasonable attorney’s fees and court costs as the applicable law
          allows. [Murphy] will also pay [Exeter’s] reasonable out-of-pocket expenses
          incurred in connection with retaking, holding and selling the vehicle as the
          applicable law allows.

          In construing a written contract, our primary concern is to ascertain the intentions of the

parties as expressed in the instrument. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662

(Tex. 2005); Craig Sessions, M.D., P.A. v. TH Healthcare, Ltd., 412 S.W.3d 738, 742 (Tex. App.—

Texarkana 2013, no pet.). A contract term is given its plain and ordinary meaning unless the

instrument indicates a different meaning is intended by the parties. Dynegy Midstream Servs., Ltd.

P’ship v. Apache Corp., 294 S.W.3d 164, 168 (Tex. 2009); Craig Sessions, M.D., P.A., 412 S.W.3d

at 742.

          Here, the contract entitles Exeter to recover attorney fees only if [it] “hire[s] an attorney

. . . to enforce this contract.” Provisions in contracts which allow the recovery of attorney fees in

suits to “enforce a contract” are narrowly construed.6 See, e.g., Fazio v. Cypress/GR Houston I,

L.P., 403 S.W.3d 390, 398 (Tex. App.—Houston [1st Dist.] 2013, pet. denied) (en banc); Oat Note,

Inc. v. Ampro Equities, Inc., 141 S.W.3d 274, 280–81 (Tex. App.—Austin 2004, no pet.). Though


6
 Contract provisions allowing the award of attorney fees to the prevailing party in an action “related to,” “brought
under,” or “with respect to” the contract are interpreted rather broadly. See Robbins v. Capozzi, 100 S.W.3d 18, 26–
27 (Tex. App.—Tyler 2002, no pet.) (holding party entitled to recover attorney fees for successfully defending fraud
and DTPA claims under contract provision for such fees when agreement allowed their recovery by “[t]he prevailing
party in any legal proceeding brought under or with respect to the transaction described in his contract”); Rich v. Olah,
274 S.W.3d 878, 888 (Tex. App.—Dallas 2008, no pet.) (holding that fraud and DTPA tort claims related to contract
for purpose of provision awarding attorney fees when contract provided for recovery by “prevailing party in any legal
proceeding related to this contract”).
                                                          11
Exeter’s pleadings allege that Murphy defaulted on the contract, the trial court made no such

finding. Exeter did not seek in this suit to repossess the vehicle, failed to bring a counterclaim or

other cause of action against Murphy for breach of contract, and sought no damages or other relief

from Murphy that would provide a contractual basis for the award of attorney fees. Therefore,

Exeter was not entitled to an award of attorney fees because, by its actions in this case, it did not

seek “to enforce” the contract against Murphy. See Fazio, 403 S.W.3d at 398; Oat Note, Inc., 141

S.W.3d at 280–81. We sustain this point of error.

       We reverse the trial court’s award of attorney fees to Exeter, but affirm the remainder of

the trial court’s order granting Exeter’s no-evidence motion for summary judgment.




                                              Bailey C. Moseley
                                              Justice

Date Submitted:        July 12, 2018
Date Decided:          August 9, 2018




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