



Pruitt v. Franklin Federal                                          



IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,

AT AUSTIN


 



NO. 3-91-196-CV



SUZANNE PRUITT,


	APPELLANT


vs.



FRANKLIN FEDERAL BANCORP,

	APPELLEE


 


FROM THE DISTRICT COURT OF TRAVIS COUNTY, 147TH JUDICIAL DISTRICT

NO. 485,168, HONORABLE HUME COFER, JUDGE PRESIDING

 


	Franklin Federal Bancorp, appellee, sued Suzanne Pruitt, appellant, for deficiency
balances remaining on two promissory notes after foreclosure on deeds of trust securing payment
of the notes.  The trial court granted summary judgment for Franklin Federal for principal,
interest, and attorney's fees.  Pruitt appeals, contending, among other arguments, that the
summary judgment evidence regarding the amount of interest that had accrued was insufficient. 
We will reverse and remand.

THE SUMMARY JUDGMENT EVIDENCE
	In 1983 Pruitt borrowed $119,200 from Lockhart Savings & Loan Association and
signed two "adjustable rate" promissory notes, one dated December 8, 1983, in the amount of
$62,400 and one dated December 15, 1983, in the amount of $56,800.  Through a series of events
not relevant to this appeal, the two notes were eventually transferred to Franklin Federal.  Pruitt
defaulted on the notes, whereupon on May 2, 1989, Franklin Federal accelerated the maturity
dates of the notes and foreclosed on the properties securing the indebtedness.  For purposes of this
appeal, the relevant terms of the two notes, those pertaining to interest, are identical:

2. INTEREST

	Interest will be charged on that part of principal which has not been
paid, beginning on the date I receive principal and continuing until the full amount
of principal has been paid.

 Beginning on the date I receive principal, I will pay interest at a
yearly rate of 13.25%.  The interest rate I will pay will change in accordance with
Section 4 of this Note.

	The interest rate required by this Section, Section 4, and Section 5
of this Note is the rate I will pay both before and after any default described in
Section 9(B) of this Note.

*     *     *

4. INTEREST RATE AND MONTHLY PAYMENT CHANGES

	(A)  Change Dates

The interest rate I will pay may change on January 1, 1987, and on that day of the
month every thirty-six (36) months thereafter.  Each date on which my interest rate
could change is called a "Change Date."

	(B)  The Index

 Beginning with the first Change Date, my interest rate will be based
on an "Index."  The Index is the weekly average yield on United States Treasury
securities adjusted to a constant maturity of three (3) years, as made available by
the Federal Reserve Board.  The most recent Index figure available as of 45 days
before each Change Date is called the "Current Index."

	If the index is no longer available, the Note Holder will choose a
new index which is based upon comparable information.  The Note Holder will
give me notice of its choice.

	(C)  Calculation of Changes

 Before each Change Date, the Note Holder will calculate my new
interest rate by adding 1.575 percentage points to the Current Index.  The sum will
be my new interest rate.

	The Note Holder will then determine the amount of the monthly
payment that would be sufficient to repay in full the principal I am expected to owe
on the Change Date in substantially equal payments by the maturity date at my new
interest rate.  The result of this calculation will be the new amount of my monthly
payment.

	(D)  Effective Date of Changes

	My new rate will become effective on each Change Date.  I will pay
the amount of my new monthly payment beginning on the first monthly payment
date after the Change Date until the amount of my monthly payment changes again.

(Emphasis added.)
	The summary judgment evidence consisted of:  (1) an affidavit of Dianna Gordon,
an officer of Franklin Federal, to which copies of the relevant notes were attached; and (2) an
affidavit of Franklin Federal's attorney, which related only to attorney's fees.  The only portion
of Gordon's affidavit that addressed the amount of interest that had accrued on the notes was the
following sentence:  "In accordance with the terms of the Notes, interest has accrued and
continues to accrue on the matured amount at the rate as set out therein."

STANDARD OF REVIEW
	The standards for reviewing a summary judgment are well established:

1.	The movant for summary judgment has the burden of showing that there
is no genuine issue of material fact and that it is entitled to judgment as a
matter of law.

2.	In deciding whether there is a disputed material fact issue precluding
summary judgment, evidence favorable to the non-movant will be taken as
true.

3.	Every reasonable inference must be indulged in favor of the non-movant
and any doubts resolved in its favor.


Nixon v. Mr. Property Mgt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985).

DISCUSSION
	In her third point of error, Pruitt asserts that Franklin Federal did not satisfy its
burden of showing that there are no genuine issues of material fact regarding the amount of
interest to which Franklin Federal is entitled.  We agree.
	Section 2 of the notes expressly states that the interest rate will change in
accordance with the provisions of Section 4.  Section 4 provides that on January 1, 1987, and
every three years thereafter the interest rate will change to the "current index" plus 1.575 percent. 
The "current index" is based on the current yield  of United States Treasury securities.  The
summary judgment evidence contains no information whatsoever from which to calculate what the
current index was on January 1, 1987, or what the interest rate on the notes was after that date. 
Nor does Dianne Gordon's affidavit contain any conclusory statements about how much interest
had accrued by a particular date or what the per diem accrual of interest was.  In short, there is
absolutely nothing in the summary judgment evidence by which the trial court could determine
how much interest Franklin Federal was entitled to recover.
	Franklin Federal cites several cases for the proposition that the nonmovant has the
burden to controvert the movant's summary judgment evidence with his own evidence in order
to raise a fact issue.  The nonmovant has no such burden, however, unless and until the movant
has met its summary judgment burden of establishing that there are no genuine issues of material
fact and that it is entitled to judgment as a matter of law.  City of Houston v. Clear Creek Basin
Auth., 589 S.W.2d 671, 678 (Tex. 1979).  In this instance, Pruitt did not have any burden to
contradict Franklin Federal's motion or present evidence to "raise a fact issue," because Franklin
Federal did not present sufficient evidence to warrant summary judgment in the first instance. 
We sustain Pruitt's third point of error.
	In light of our foregoing holding, we need not address Pruitt's other points of error
or Franklin Federal's cross-point.
	The judgment of the trial court is reversed and the cause is remanded to that court
for further proceedings.


  
					J. Woodfin Jones, Justice
[Before Justices Jones, Kidd and B. A. Smith]
Reversed and Remanded
Filed:   February 19, 1992
[Publish]
