                                   NO. 07-06-0205-CV

                             IN THE COURT OF APPEALS

                      FOR THE SEVENTH DISTRICT OF TEXAS

                                      AT AMARILLO

                                        PANEL C

                                 FEBRUARY 8, 2007
                          ______________________________

                 VAUGHN EXCAVATING AND CONSTRUCTION, INC.
             A/K/A VAUGHN CONCRETE PRODUCTS, INC., APPELLANT

                                            V.

                        CENTERGAS FUELS, INC., APPELLEE
                        _________________________________

       FROM THE COUNTY COURT AT LAW NO. ONE OF POTTER COUNTY;

            NO. 92,923-1; HONORABLE W. F. CORKY ROBERTS, JUDGE
                       _______________________________


Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.


                                         OPINION


       Appellant, Vaughn Excavating and Construction, Inc. (Vaughn), appeals from a

judgment granted Centergas Fuels, Inc. after a bench trial in a suit on a sworn account for

fuel delivered to Vaughn. Appellant’s sole contention is that it established the affirmative

defense of accord and satisfaction as a matter of law. We affirm.
                           Factual and Procedural Background


         By an open account arrangement, Vaughn had been buying diesel fuel from

Centergas and Centergas’s predecessor, Signal, for a considerable period of time.          In

November 2003, a 2003 Kenworth truck owned by Vaughn was allegedly damaged by

contaminated fuel furnished by Centergas. The repair cost for the Kenworth truck was

$8,732.95. Vaughn requested that Centergas pay the repair bills for the Kenworth,

however, there was never an agreement that Centergas would accept responsibility for the

repair cost and pay the bills. After the mechanical failure of the Kenworth truck, Centergas

delivered additional loads of fuel to Vaughn without any further claims or allegations of

contaminated fuel. By early 2004, the total outstanding amount on the open account was

$11,304.22. Vaughn sent a check for $2,571.27 with a notation on the check that cashing

the check acknowledged payment in full for all outstanding purchases up to the date of the

check.    Additionally, the check was attached to Vaughn stationary that included a

statement that the check represented a deduction of $8,732.95 for the repair of the

Kenworth truck. Centergas negotiated the check and subsequently filed suit on the open

account for the balance of $8,732.95.        Vaughn filed a general denial, alleged the

affirmative defense of accord and satisfaction and a counter claim alleging breach of

expressed and implied warranties. Trial was to the court and judgment was granted to

Centergas for $8,732.95 plus attorney fees, interest, and court costs. Additionally, the trial

court dismissed Vaughn’s counterclaim. Findings of fact were filed by the trial court and

the pertinent finding was number 6, “Defendant has failed to prove, or Plaintiff has

negated, at least one element of each of Defendant’s defenses and counterclaims.” It is


                                              2
this finding of fact that Vaughn attacks in its appeal. Vaughn contends that the evidence

established as a matter of law the affirmative defense of accord and satisfaction.


                                    Standard of Review


       The trial court’s fact findings are reviewed for legal and factual sufficiency the same

as a jury’s answer to jury questions. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996) (per

curiam). Therefore, we will review the finding of fact under the legal sufficiency test. See

Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001) (per curiam). When reviewing

a legal sufficiency challenge to a finding on an issue on which appellant has the burden of

proof, the reviewing court will examine the record for evidence that supports the finding,

while ignoring all contrary evidence. Id. If, upon review, there is no evidence to support

the finding, we will then examine the entire record to see if the contrary position is

established as a matter of law. Id. If the contrary position is established conclusively, we

will sustain the issue. Id.


                                          Analysis


       Appellant’s contention is that its claim for accord and satisfaction was pursuant to

section 3.311 of the Texas Business and Commerce Code. TEX . BUS. & COMM. CODE ANN .

§ 3.311 (Vernon 2006). 1 As such, appellant has undertaken to prove that 1) the person in

good faith tendered an instrument to the claimant as full satisfaction of the claim; 2) the




       1
           References to Texas Business and Commerce Code will hereafter be by § __.

                                              3
amount of the claim was unliquidated or subject to a bona fide dispute; and 3) the claimant

obtained payment of the instrument. § 3.311(a).2


       To review the bona fide dispute requirement, we turn to § 3.311(a)(2). There is no

question that the claim of Centergas was liquidated, therefore, there must be a bona fide

dispute for the affirmative defense of accord and satisfaction to apply. The next question

would be, what constitutes evidence of a bona fide dispute? The dispute must be as to the

claim. Klemp Corp. v. Thompson, 402 S.W.2d 257, 261 (Tex.App.–Waco 1966, no writ)

(emphasis added). Further, a comment to § 3.311 states that the section does not apply

to a liquidated amount not subject to a bona fide dispute. § 3.311 cmt. 4. In the current

situation, Vaughn claimed that the fuel was defective, yet the evidence at trial indicated

that Vaughn actually paid for the fuel he claimed was defective and did not dispute the

quality of the fuel nor the amount of the charges for the fuel that was the subject of the suit,

namely the fuel delivered after the discovery of the truck’s mechanical problems. The

conclusion that the claimant’s claim is not the subject of a bona fide dispute is further

buttressed by the following evidence adduced at trial. The mechanical failures suffered by

the Kenworth truck ceased after the installation of a locking fuel tank cap on the truck. In

addition, there was testimony about a Vaughn employee having a personal vendetta

against another employee, the implication being that the Kenworth truck was sabotaged

by the first Vaughn employee. Therefore, it appears the attempt at offset by way of accord



       2
         In the present case, there is no dispute that the claimant, Centergas, obtained
payment of the instrument. Although Centergas contests the good faith requirement, our
conclusion as to the issue of whether a bona fide dispute exists pretermits any discussion
of the good faith requirement.

                                               4
and satisfaction was not aimed at the claimant’s action but was in fact more in the nature

of Vaughn’s counterclaim which the trial court denied and about which Vaughn has not

complained. Accordingly, we cannot say there was no evidence to support the finding of

fact of the trial court. Therefore, we overrule Vaughn’s contention.


                                       Conclusion


      Having overruled Vaughn’s sole issue, the judgment of the trial court is affirmed.




                                         Mackey K. Hancock
                                              Justice




                                            5
