Opinion
No. 3-99-CV-0307-BD.
June 6, 2000.
MEMORANDUM OPINION AND ORDER
Plaintiff Siemens Financial Services, Inc. has filed a motion for summary judgment in this suit on an equipment lease, promissory note, and personal guaranty. For the reasons stated herein, the motion is granted with respect to liability and damages but denied as to attorney's fees.
I.
On July 11, 1995, Phy Med, Inc. leased a Magnetom Vision System from Siemens Credit Corporation. The lease required an initial payment of $16,155.00 upon delivery of the equipment, with the balance due and payable in 60 monthly installments. (Plf. App. at 010-14). In a separate transaction, Phy Med borrowed $175,000.00 from Siemens. This loan is evidenced by a promissory note dated August 30, 1995. The note provides for repayment of principal and interest in 60 monthly installments of $3,668.00 each. ( Id. at 036). Both the equipment lease and promissory note were guaranteed by George C. Barker, President of Phy Med, and his wife. ( Id. at 018, 038).
Siemens Credit Corporation changed its name to Siemens Financial Services, Inc. after this lawsuit was filed. See ORDER SUBSTITUTING PARTIES, 6/1/00.
Phy Med subsequently defaulted on its obligations under the lease and promissory note. Siemens accelerated the debt, demanded the return of the equipment, and sought payment under the guarantees. ( Id. at 019-21, 039-41). Phy Med and the Barkers ignored this demand. This lawsuit followed.
Siemens now moves for summary judgment as to liability, damages, and attorney's fees. It seeks actual damages in the amount of $1,850,827.96 on the equipment lease and lease guaranty, $105,211.46 on the promissory note and note guaranty, and $43,454.00 in attorney's fees. Defendants have filed a response to the motion and this matter is ripe for determination.
II.
Summary judgment is proper when there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. FED. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). A dispute is "genuine" if the issue could be resolved in favor of either party. Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Thurman v. Sears, Roebuck Co., 952 F.2d 128, 131 (5th Cir.), cert. denied, 113 S.Ct. 136 (1992). A fact is "material" if it might reasonably affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986); Matter of Gleasman, 933 F.2d 1277, 1281 (5th Cir. 1991).
A movant who bears the burden of proof at trial must submit evidence to establish every essential element of its claim or affirmative defense. See Richmond Capital Corp. v. Federal Express Corp., 29 F. Supp.2d 737, 738 (M.D.La. 1998); Brenham Community Protective Association v. United States Department of Agriculture, 893 F. Supp. 665, 668 (W.D.Tex. 1995). The burden then shifts to the nonmovant to show that summary judgment is not proper. Richmond Capital, 29 F. Supp.2d at 738-39. The nonmovant may satisfy its burden by tendering depositions, affidavits, and other competent evidence. Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir), cert. denied, 113 S.Ct. 82 (1992). All the evidence must be viewed in the light most favorable to the party opposing the motion. Rosado v. Deters, 5 F.3d 119, 122 (5th Cir. 1993). However, conclusory statements and testimony based merely on conjecture or subjective belief are not competent summary judgment evidence. Topalian, 954 F.2d at 1131.
III.
Both sides raise a number of objections to the summary judgment evidence. Most of the challenged affidavits and exhibits are not necessary to the disposition the pending motion. However, the Court must address the objections to George Barker's affidavit. Barker speculates as to the propriety of certain late charges, repossession expenses, and the Stipulated Loss Value provision of the lease. (Def. App. at 2-4). He then concludes that Siemens' damage calculations are invalidated by erroneous postings, duplicate charges, and unjustified legal fees. ( Id.).
Siemens objects to this testimony on multiple grounds. Although many of these objections are well-taken, the most compelling reason for excluding this evidence is that Barker lacks personal knowledge and the required expertise to challenge the calculation of damages. In addition, his testimony is clearly based on hearsay. Siemens' objections are sustained on that basis. The remaining objections are overruled as moot.
IV.
Siemens seeks summary judgment as to liability, damages, and attorney's fees. Defendants acknowledge that they defaulted in their obligations under the equipment lease, promissory note, and personal guarantees. (Def. Response at 4; Def. App. at 2). However, they maintain that Siemens has failed to prove that the equipment was repossessed and sold in a commercially reasonable manner or that the damage calculations are correct. The Court will address each argument in turn.
A.
Defendant's first argument is founded on the assumption that Siemens was required to sell the repossessed equipment in a "commercially reasonable manner." As authority for this proposition, defendants cite Section 9.504 of the Texas Uniform Commercial Code. However, that section applies only to secured transactions. The equipment lease at issue in this case is governed by Chapter 2A of the UCC. See TEX. BUS. COMM. CODE ANN. § 2A. 102 (Vernon 1994) ("This chapter applies to any transaction, regardless of form, that creates a lease of goods."). Section 2A.523 provides, in relevant part:
Section 9.504 of the UCC provides, in relevant part:
(a) A secured party after default may sell, lease or otherwise dispose of any or all of the collateral in its then condition or following any commercially reasonable preparation or processing . . .
* * * *
(c) Disposition of the collateral may be by public or private proceedings and may be made by way of one or more contracts. Sale or other disposition may be as a unit or in parcels and at any time and place and on any terms but every aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable . . .
TEX. BUS. COMM. CODE ANN. § 9.504 (Vernon 1991).
(a) If a lessee wrongfully rejects or revokes acceptance of goods or fails to make a payment when due or repudiates with respect to a part of the whole, then, with respect to any goods involved, and with respect to all of the goods if under an installment lease contract, the value of the whole lease contract is substantially impaired . . . the lessee is in default under the lease contract and the lessor may:
* * * *
(3) withhold delivery of the goods and take possession of goods previously delivered . . .
* * * *
(5) dispose of the goods and recover damages . . .
Id. § 2A.523. There is no requirement that leased goods be repossessed and sold in a commercially reasonable manner.
B.
Defendants further argue that Siemens has failed to prove its damages by competent summary judgment evidence. George Abreu, Director of Compliance for Siemens Credit Corporation, calculated damages in his sworn affidavit. Abreu states that the total amount due under the equipment lease and lease guaranty as of February 14, 2000 was $1,850,827.96. (Plf. App. at 005, ¶ 28). This sum represents: (1) past due rentals; (2) amounts due under the stipulated loss schedule in the lease; (3) sales tax; (4) property tax; (5) late charges; and (6) repossession expenses. ( Id. at 004-5, ¶ 27). Late charges continue to accrue at the rate of $978.68 per day. ( Id. at 004, ¶ 28). All monies received from the sale of the equipment have been credited to defendants. ( Id.). A statement of account reflecting these damage calculations is attached to the affidavit. ( Id. at 005, ¶ 29 Exh. H).
Abreu also calculated the total amount due under the promissory note and note guaranty. As of February 14, 2000, Abreu states that defendants owed $105,211.46 in principal and interest on the note. ( Id. at 007, ¶ 47). Interest continues to accrue at the rate of $41.63 per day. ( Id.). A statement of account reflecting these calculations is attached to the affidavit. ( Id. Exh. M).
Defendants suggest that "it is virtually impossible to reconstruct a proper claim" due to the complexity of the lease documents and payment schedules. (Def. Response at 7). However, Abreu had little difficulty calculating damages from these documents and explaining his results to the Court. Defendants attempt to create a fact issue by contesting the propriety of certain late charges, repossession expenses, and the Stipulated Loss Value provision of the lease. This Court previously determined that George Barker was not competent to testify regarding those matters. No other summary judgment evidence has been offered to controvert Siemens' damage calculations. Therefore, the Court concludes that liability and damages have been established as a matter of law.
C.
Siemens also seeks attorney's fees in the amount of $43,454.00 through trial and additional sums if this case is appealed. This request is supported by the affidavit of counsel. However, the affidavit does not itemize the legal services performed and time spent in connection with this matter. It is therefore impossible to determine whether these fees are reasonable. See TEX. CIV. PRAC. REM. CODE ANN. § 38.001 (Vernon 1997) (successful litigant entitled to recover "reasonable attorney's fees" in suit on oral or written contract). For these reasons, Siemens is not entitled to summary judgment on its claim for attorney's fees.
CONCLUSION
There are no genuine issues of material fact and Siemens is entitled to judgment as a matter of law in the amount of $1,850,827.96 on the equipment lease and lease guaranty and $105,211.46 on the promissory note and note guaranty, together with late charges and interest. The parties are directed to confer on the calculation of late charges and interest and submit a proposed final judgment to the chambers of the magistrate judge by June 30, 2000 . The judgment must be approved as to form and signed by all counsel of record.
The parties are also directed to confer on the amount of attorney's fees. If this issue cannot be resolved by agreement, Siemens may file an application for fees and expenses within 14 days after the judgment is entered. See FED. R. CIV. P. 54(d).
SO ORDERED.