Opinion
No. 04-16-00219-CV
10-26-2016
Todd LINDLEY d/b/a GoldenLife Senior Care, Inc. and d/b/a Veranda Place, Appellant v. PERFORMANCE FOOD GROUP OF TEXAS, L.P., Appellee
MEMORANDUM OPINION
From the County Court at Law No. 2, Travis County, Texas
Trial Court No. C-1-CV-13-003440
Honorable Todd T. Wong, Judge Presiding Opinion by: Marialyn Barnard, Justice Sitting: Karen Angelini, Justice Marialyn Barnard, Justice Rebeca C. Martinez, Justice REVERSED AND REMANDED
Todd Lindley appeals the trial court's order granting a summary judgment in favor of Performance Food Group of Texas, L.P. in a suit on a sworn account. Lindley contends the trial court erred in concluding he was individually liable for the account debt. Alternatively, Lindley contends a genuine issue of material fact exists regarding the amount owed on the account. Lindley also contends the trial court erred in overruling his objections to Performance's summary judgment evidence, and the evidence does not support the amount of attorney's fees awarded to Performance. Holding a fact issue exists regarding the amount owed on the account, we reverse the trial court's judgment and remand the cause for further proceedings.
BACKGROUND
On November 10, 2003, GoldenLife Senior Care, Inc. d/b/a Veranda Place signed an account application setting forth the terms under which Performance would deliver goods to GoldenLife's nursing home. The application lists Lindley as a corporate officer. Although the application contains a provision for an individual personal guaranty, the term "N/A" was written in the signature space for this provision, indicating the personal guaranty was not applicable to the parties' agreement.
On April 12, 2013, Performance sued Lindley alleging he was individually liable for the amount owed on the account because GoldenLife was an assumed name Lindley used to operate the nursing home. Performance later amended its pleadings to also allege Lindley was personally liable for the debt incurred on the account during the period of time GoldenLife's corporate charter was forfeited. Performance moved for summary judgment, attaching invoices and statements establishing that $47,277.52 in goods were delivered to the nursing home between March 27, 2012, and May 25, 2012. Performance also attached evidence establishing that GoldenLife's corporate charter was forfeited on July 29, 2011 and was not reinstated until April 4, 2013. Finally, Performance attached its credit manager's affidavit which stated the amount then due on the account was $44,737.52, after all payments, offsets, and credits were allowed.
Lindley filed a response and objections to the affidavit attached to Performance's motion. In his response and in the affidavit accompanying his response, Lindley asserted GoldenLife was a corporation and not an assumed name. Lindley also asserted the debt owed on the account was incurred while GoldenLife's corporate charter was in good standing. Lindley further asserted he created a new corporate entity in 2008 named Crescent Senior Care, LLC, which entered into a successor liability agreement with the State of Texas, thereby assuming the liabilities of GoldenLife. Lindley stated Performance was aware of this agreement, and Crescent made numerous payments in 2011 and 2012 for goods delivered on GoldenLife's account. Finally, Lindley stated payments made by Crescent had not been fully credited to the account.
Lindley attached to his affidavit a copy of a document on Performance's letterhead authorizing Performance to draft Crescent's bank account. The document is dated October 26, 2012, and authorizes a draft of $1,000 per month beginning November 5, 2012. Although Performance makes an argument in its brief for imposing liability on Lindley based on this document, no such argument was presented in its motion for summary judgment or in its response to Lindley's motion for summary judgment. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 675-77 (Tex. 1979) (holding issues presented on appeal of a summary judgment must have been presented to and considered by the trial court). The document identifies Crescent as the customer but also lists the same customer number included in the invoices and statements attached to Performance's motion for summary judgment.
Lindley also filed a motion for summary judgment asserting he was not individually liable for amounts owed on the account. Performance filed a response asserting the same grounds for holding Lindley individually liable as asserted in its motion.
The trial court granted Performance's motion and denied Lindley's motion. The trial court awarded Performance $44,737.52 in damages, $28,107.42 in prejudgment interest, and $14,912.51 in attorney's fees. The trial court also awarded conditional appellate attorney's fees. Lindley appeals.
STANDARD OF REVIEW
We review a trial court's granting of a summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). To prevail on a traditional motion for summary judgment, the movant must show "there is no genuine issue as to any material fact and the [movant] is entitled to judgment as a matter of law." TEX. R. CIV. P. 166a(c); see also Diversicare Gen. Partner, Inc. v. Rubio, 185 S.W.3d 842, 846 (Tex. 2005). In reviewing a summary judgment, we take as true all evidence favorable to the non-movant, indulging every reasonable inference and resolving any doubts in the non-movant's favor. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 157 (Tex. 2004).
LINDLEY'S INDIVIDUAL LIABILITY
Performance alleged Lindley was individually liable either because GoldenLife was an assumed name or GoldenLife incurred the amount owed on the account when its corporate charter had been forfeited. Lindley responded GoldenLife is a corporation and the account application was signed while its corporate charter was in good standing.
With regard to Performance's allegation that GoldenLife was an assumed name used by Lindley to operate the nursing home, a copy of GoldenLife's articles of incorporation filed with the Texas Secretary of State in 1999 was included in the summary judgment evidence. In addition, Performance's account application identified GoldenLife as a corporation. Finally, Performance's reliance on GoldenLife's forfeiture of its corporate charter as a means to impose personal liability on Lindley is inconsistent with its assertion that GoldenLife is not a corporation. Accordingly, the summary judgment evidence conclusively established that GoldenLife is a Texas corporation, and the trial court would have erred in granting summary judgment against Lindley on the basis that GoldenLife was an assumed name used by Lindley to operate the nursing home.
We note Lindley's objections to the affidavit of Performance's credit manager were directed at statements relating to this theory of liability. However, Lindley did not obtain a ruling on his objections, and this court has rejected Lindley's argument that a trial court implicitly overrules objections in ruling on a motion for summary judgment. See Well Solutions, Inc. v. Stafford, 32 S.W.3d 313, 317 (Tex. App.—San Antonio 2000, no pet.). Therefore, Lindley's complaint that the trial court erred in overruling his objections has not been preserved for our consideration. See TEX. R. APP. P. 33.1. --------
With regard to Performance's allegation that Lindley was individually liable because the amounts owed on the account were incurred when GoldenLife's corporate charter was forfeited, section 171.255(a) of the Texas Tax Code provides:
If the corporate privileges of a corporation are forfeited for the failure to file a report or pay a tax or penalty, each director or officer of the corporation is liable for each debt of the corporation that is created or incurred in this state after the date
on which the report, tax, or penalty is due and before the corporate privileges are revived.TEX. TAX CODE ANN. § 171.255(a) (West 2015). Lindley acknowledges he is a director and officer of GoldenLife but contends the debt owed to Performance was created or incurred in November of 2003 when the account application was signed and before GoldenLife's corporate charter was forfeited.
In Schwab v. Schlumberger Well Surveying Corp., the Texas Supreme Court addressed when a debt is created or incurred in this context. 198 S.W.2d 79, 81-82 (Tex. 1946). In that case, F.P. Schwab and M.F. Schwab were officers of S. K. & C. Company (the "Company"). Id. at 80. In 1938 and 1939, Schlumberger provided well surveying services to the Company under an open account. Id. On April 1, 1939, the Company executed a note for the amount it owed to Schlumberger on the open account. Id. "Thereafter, six renewal notes were executed by the [Company] prior to the forfeiture of its right to do business." Id. "Then, after the forfeiture, and while its right to do business was suspended, the seventh renewal note, the one sued upon, was executed for the same indebtedness pursuant to correspondence solely in the name of the [Company]." Id. "There was nothing in the correspondence exchanged between the parties, nor in the seventh renewal note, to indicate the assumption personally of any liability on the part of the Schwabs." Id. The trial court entered judgment against the Schwabs, and they appealed. Id.
The Texas Supreme Court noted the statute "fixes liability upon the directors and officers of a corporation only for debts 'created or incurred' after the forfeiture of the corporation's right to do business." Id. at 81. The court held "no debt was 'created' or 'incurred' by the renewal of the note because the obligation theretofore existed." Id.; see also Cain v. State, 882 S.W.2d 515, 516-17 (Tex. App.—Austin 1994, no writ) (noting corporation in Schwab "accumulated a corporate obligation on open account — a liquidated sum and therefore an obvious 'debt' in legal usage").
Lindley cites several cases in which the courts held the debt was incurred when the initial contract or lease was signed even though the corporation later defaulted in making the installment payments or rent due under the contract or lease. See Rossman v. Bishop Colo. Retail Plaza, L.P., 455 S.W.3d 797, 800, 802-04 (Tex. App.—Dallas 2015, pet. denied) (involving five-year commercial lease of two suites in a shopping center and debt arising out of failure to perform under the terms of the lease); McKinney v. Anderson, 734 S.W.2d 173, 174-75 (Tex. App.—Houston [1st Dist.] 1987, no writ) (involving rental payments due under equipment lease); Curry Auto Leasing, Inc. v. Byrd, 683 S.W.2d 109, 110-12 (Tex. App.—Dallas 1984, no writ) (involving payments due under forty-eight-month car lease). The cited cases are distinguishable, however, from a debt incurred on an open account. As the Texas Supreme Court recognized in Schwab, the debt on an open account is incurred when the goods or services are delivered or performed. 198 S.W.2d at 81 (noting "obligation theretofore existed" before the note was signed); Cain, 882 S.W.2d at 517 (noting debt in Schwab "came into existence as a liquidated sum on open account at a time well before forfeiture"); see also Geodetic Positioning Serv., Inc. v. Brown & Root Const., Ltd., C14-92-01248-CV, 1993 WL 393787, at *1 (Tex. App.—Houston [14th Dist.] Oct. 7, 1993, no writ) (agreeing officer would not be personally liable for promissory note executed on date when corporate charter was forfeited because note simply renewed an obligation incurred on a sworn account prior to the forfeiture) (not designated for publication); Simmons Carpet Co. v. Hooker, No. A14-91-00145-CV, 1991 WL 273195, at *1 (Tex. App.—Houston [14th Dist.] Dec. 19, 1992, no writ) (holding debt was incurred on an open account on the date carpet was delivered and installed) (not designated for publication); Concrete Const. Supply, Inc. v. M. F. C., Inc., 636 475, 483 (Tex. App.—Dallas 1982, no writ) (noting "each item on an open account is a separate transaction between the parties): Watson v. Cargill, Inc., 573 S.W.2d 35, 39 (Tex. Civ. App.—Waco 1978, writ ref'd n.r.e.) (same). In this case, the invoices and statements attached to Performance's motion establish the goods were delivered between March 27, 2012, and May 25, 2012. Because those debts were incurred on dates GoldenLife's corporate charter was forfeited, the trial court did not err in holding Lindley personally liable for the debts incurred on those dates.
AMOUNT OF DEBT
With regard to the amount of the debt owed to Performance, Performance attached the affidavit of its credit manager to its motion. In the affidavit, the credit manager stated the amount due on the account was $44,737.52, after all payments, offsets, and credits were allowed.
Lindley attached his affidavit to his response. In his affidavit, Lindley stated Crescent was formed in 2008, and made numerous payments in 2011 and 2012 for goods delivered on GoldenLife's account. Lindley also stated payments made by Crescent had not been fully credited to the account.
Under the applicable standard of review, we view the evidence in the light most favorable to Lindley. See Two Thirty Nine Joint Venture, 145 S.W.3d at 157. Therefore, we hold a genuine issue of material fact exists as to the amount due on the account.
CONCLUSION
Although we hold Lindley is individually liable for the debts incurred on GoldenLife's open account between March 27, 2012, and May 25, 2012, we also hold Lindley raised a genuine issue of material fact regarding the total amount owed on the account. Therefore, we reverse the trial court's order. Because we reverse the trial court's order as to the amount of damages awarded, we also reverse the trial court's order as to the amount of attorney's fees awarded. See Young v. Qualls, 223 S.W.3d 312, 314-15 (Tex. 2007).
Marialyn Barnard, Justice