Elizabeth Harper v. Mac Haik Ford Ltd.

Opinion issued July 1, 2010

In The

Court of Appeals

For The

First District of Texas

NO. 01-09-01144-CV

ELIZABETH HARPER, Appellant

V.

MAC HAIK FORD, LTD., Appellee

On Appeal from the County Civil Court at Law No. 4

Harris County, Texas

Trial Court Cause No. 910257

MEMORANDUM OPINION

Almost

four years after she purchased a new Ford F-150 truck, Elizabeth Harper sued

Mac Haik Ford, Ltd. (“Mac Haik”) for fraud, negligent misrepresentation,

tortious interference with prospective business relations, and violations of

the Texas Finance Code and Deceptive Trade Practices Act. The trial court granted summary judgment in

favor of Mac Haik on all of Harper’s claims.

On appeal, Harper contends that the trial court erred in granting

summary judgment because Harper filed her claims within the applicable statutes

of limitation and fact issues exist to support them. [1] We hold that limitations bars Harper’s claims

and therefore affirm.

Background

On March 18, 2004, Harper bought a new

Ford F-150 from Mac Haik. She financed

the purchase through MemberSource Credit Union (“MemberSource”) at a 10.5%

interest rate. During the purchase

negotiations, a Mac Haik representative allegedly informed Harper that the

dealership would obtain the “lowest price available” from MemberSource.

Harper also purchased an extended

service contract and financed the price of this contract as part of the total

purchase price. The extended service

contract charge appeared in an itemized section of the installment contract

entitled “Other Charges Including Amounts Paid to Others on Your Behalf.” The caption of this section notes that the

“Seller may keep part of these amounts.”

In a subsection, Mac Haik identified “Ford ESP” as a payee for a

“service contract” in the amount of $2700.

On December 21, 2007, Harper sued Mac

Haik, claiming that (1) it did not give her the lowest available financing

rate, (2) it misrepresented the amount paid to Ford ESP, and (3) it pocketed

the difference in both cases. Harper’s

counsel requested that the clerk issue a citation and return it to counsel for

service at a later date. Harper served

Mac Haik with citation about three months later, on March 19, 2008. In 2009, Harper amended her petition to add

claims against Mac Haik for negligent misrepresentation, tortious interference

with prospective business relations, and for violation of the DTPA laundry

list.

Mac Haik moved for summary judgment

on all of Harper’s claims. Mac Haik

contended that Harper could present no evidence of any element of her claims

and further contended that limitations barred Harper’s claims because Harper

did not file suit within two years of her alleged injury, and did not serve Mac

Haik within four years of her injury.

Harper responded on September 21,

2009, four days before the hearing on Mac Haik’s summary judgment motions. Harper contended that she sued and served Mac

Haik within the limitations period because the discovery rule applied to all of

her claims due to Mac Haik’s “fraudulent and deceptive conduct.” She further contended that her causes of

action did not accrue when she purchased the vehicle, but instead accrued when

she consulted her attorney about the purchase, “well after the March 18, 2004

purchase date.”

As summary judgment evidence, Harper

attached her affidavit, describing the representations made to her by Mac Haik,

and the deposition of Jeffrey Heath, chief financial officer of Mac Haik. Harper stated that Mac Haik representatives

told her that 10.5% was the lowest available interest rate from MemberSource,

even though MemberSource actually had approved a 7.5% rate. Heath testified that, usually, Mac Haik

contracts with the customer for a 10.5% interest rate before it submits the

credit application to the lender. The

interest rate contracted for is higher than the MemberSource rate; MemberSource

keeps a portion of that differential, generally 25%, and pays the remainder to

Mac Haik as a fee. Harper also contended

that Mac Haik intentionally interfered with her prospective business

relationship with MemberSource, because MemberSource approved financing

Harper’s purchase at a 7.5% rate, but Mac Haik induced Harper to sign the

contract at 10.5%.

Harper further stated that Mac Haik

representatives told her that the extended service contract cost $2700, but Mac

Haik only paid $725.71 to Ford ESP and retained the remainder. Heath confirmed that, although the contract

stated that the cost of an extended service contract, payable to Ford ESP, was

$2700, Mac Haik paid Ford ESP $725.71 and kept a portion of the remainder. Harper contended that Mac Haik’s

misrepresentations violated the DTPA’s prohibition against failing to disclose

information concerning goods or services when the defendant intends this

failure to induce the consumer into the transaction. See

Tex. Bus. & Com. Code Ann.

§ 17.46(b )( 24) (Vernon Supp. 2009).

In its supplemental reply, Mac Haik

requested that the trial court strike Harper’s response and affidavit because

Harper failed to file and serve these documents at least seven days before the

summary judgment hearing and she did not obtain leave of court to late-file.

The trial court granted summary

judgment in favor of Mac Haik on all of Harper’s claims.

Discussion

Standard of Review

We

review de novo the trial court’s ruling on a motion for summary judgment. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding , 289

S.W.3d 844, 848 (Tex. 2009).

After an adequate time for discovery, a party may move for no-evidence

summary judgment if no evidence exists of one or more essential elements of a

claim or defense on which the adverse party bears the burden of proof at

trial. Tex.

R. Civ. P. 166a( i); see also Hamilton v. Wilson , 249 S.W.3d 425, 426 (Tex. 2008). The trial court must grant a no-evidence

summary judgment motion unless the non-movant produces competent summary

judgment evidence that raises a genuine issue of material fact on each element

specified in the motion. Tex. R. Civ. P. 166a( i);

Mack Trucks, Inc. v. Tamez , 206

S.W.3d 572, 582 (Tex. 2006). In a traditional

motion for summary judgment, the movant must establish that no genuine issue of

material fact exists and the movant is thus entitled to judgment as a matter of

law. Tex.

R. Civ. P. 166a(c). To determine if the non-movant raised a fact

issue, we review the evidence in the light most favorable to the non-movant,

crediting favorable evidence if reasonable jurors could do so, and disregarding

contrary evidence unless reasonable jurors could not. See

Fielding , 289 S.W.3d at 848 (citing City

of Keller v. Wilson , 168 S.W.3d 802, 827 (Tex. 2005)).

Late-Filed Summary Judgment Response

Mac

Haik first contends that the trial court correctly granted summary judgment on

Harper’s claims because she filed and served her response, affidavit, and

supporting evidence four days before the hearing on Mac Haik’s motions and did

not request leave of court to late-file these documents. Except on leave of court, the non-movant may

file and serve its summary judgment response and any opposing affidavits “not

later than seven days prior to the day of hearing.” Tex. R. Civ. P. 166a(c). We presume that the trial court does not

consider a late-filed summary judgment response and supporting evidence when

“the record contains nothing indicating the trial court considered a late-filed

response.” Neimes v. Ta , 985 S.W.2d 132, 138 (Tex. App.—San Antonio 1998, pet.

dism’d) (citing Benchmark Bank v. Crowder ,

919 S.W.2d 657, 663 (Tex. 1996)); INA of

Tex. v. Bryant , 686 S.W.2d 614, 615 (Tex. 1985) (“Bryant’s response to

INA’s motion for summary judgment was not timely filed, and nothing appears of

record to indicate that the late filing was with leave of court. Therefore, we must presume that the trial

court did not consider it in rendering a take nothing judgment in favor of

INA.”). The trial court can grant

permission to late-file a response in “a separate order, a recital in the

summary judgment, or an oral ruling contained in the reporter’s record of the

summary judgment hearing. In any event,

the record must contain an affirmative indication . . . that

the trial court permitted the late filing of the response.” Neimes ,

985 S.W.2d at 138 ; see also Pinnacle Data

Servs., Inc. v. Gillen , 104 S.W.3d 188, 193 (Tex. App.—Texarkana 2003, no

pet.) ( holding that merely mentioning response in

summary judgment does not defeat presumption that trial court did not consider

response).

Here, Harper filed her response,

affidavit, and supporting deposition testimony four days before the summary

judgment hearing. She did not move the

trial court for leave to late-file the response. The trial court, however, stated the

following in its summary judgment:

“After considering the Motion, the response, the evidence presented and

the arguments of counsel, the Court is of the opinion that the Motion is

well-taken and is hereby GRANTED.” This

recitation in the summary judgment reflects that the trial court considered

Harper’s response and supporting evidence, despite its untimely filing. We therefore hold that Harper’s summary

judgment response and evidence was properly before the trial court.

Statute of Limitations

Statute

of limitations is an affirmative defense, and thus a defendant moving for

summary judgment on this basis must (1) conclusively prove when the cause of

action accrued, and (2) negate the discovery rule, if it applies and the

plaintiff has pleaded or raised it, by proving that no fact issue exists

regarding when the plaintiff discovered, or should have discovered through

reasonable diligence, the nature of her injury.

KPMG Peat Marwick

v. Harrison County Hous. Fin. Corp. , 988 S.W.2d 746, 748

(Tex. 1999).

Generally, a cause of action accrues when a party is injured by the acts

or omissions of another, even if “the fact of injury is not discovered until

later, and even if all resulting damages have not yet occurred.” S.V. v.

R.V. , 933 S.W.2d 1, 4 (Tex. 1996); see

also Barker v. Eckman , 213 S.W.3d 306, 311 (Tex. 2006). For the discovery rule to apply,

the nature of the injury must be inherently undiscoverable and the injury must

be objectively verifiable. Barker , 213 S.W.3d at

312 . Discovery of a particular

injury depends on the nature of the injury, as well as the circumstances in

which the injury occurred and the plaintiff’s diligence. S.V. ,

933 S.W.2d at 7 .

An injury is inherently undiscoverable if, by its nature, it is unlikely

to be discovered within the particular limitations period despite due diligence

by the plaintiff. Id. ; see also Computer

Assocs. Int’l, Inc. v. Altai, Inc. , 918 S.W.2d 453, 456 (Tex. 1996).

If the movant establishes that limitations bars the action, the non-movant must present

evidence raising a fact issue on the applicability of the discovery rule to

avoid limitations. See KPMG Peat Marwick , 988 S.W.2d at 748 . The plaintiff bears the burden of pleading and

proving facts supporting the discovery rule.

See J.M. Krupar

Constr. Co. v. Rosenberg , 95 S.W.3d 322, 329 (Tex. App.—Houston [1st Dist.]

2002, no pet.).

A.

DTPA and Tortious Interference Claims

A

plaintiff must bring suit under the DTPA within two years after the date on

which the false, misleading, or deceptive act or practice occurred, or within

two years after the consumer discovered, or should have discovered through the

exercise of reasonable diligence, the occurrence of the false, misleading, or

deceptive act or practice. Tex. Bus. & Com. Code Ann.

§ 17.565 (Vernon 2002); KPMG Peat

Marwick , 988 S.W.2d at 749 (noting that discovery rule applies to DTPA

claims). The statute of limitations for

tortious interference with prospective business relations is also two years

from accrual of the cause of action. See First Nat’l Bank v. Levine , 721

S.W.2d 287 , 288–89 (Tex. 1986) (holding that tortious interference falls within

the definition of “trespass” under section 16.003(a) of Civil Practice and

Remedies Code, which provides for two-year limitations period). A cause of action for tortious interference

with prospective business relations accrues when “existing negotiations, which

are reasonably certain of resulting in a contract, are interfered with such that

the negotiations terminate and harm to the plaintiff results.” Hill v. Heritage Res., Inc. , 964 S.W.2d 89, 116 (Tex. App.—El Paso

1997, pet. denied).

Harper first

asserted her DTPA and tortious interference claims in her first amended

petition, filed in July 2009. Her

amended petition relates back to her original petition, filed on December 21,

2007, because these claims are based on the same transaction or occurrence. See

Tex. Civ. Prac. & Rem. Code Ann.

§ 16.068 (Vernon 2008). Even

relating these claims back to the filing date, however, they come more than two

years past the purchase of the car.

Harper thus urged that the discovery rule applies to defer the accrual

date for these causes of action to some point that is within two years of the

date of filing the suit.

As the

party asserting the discovery rule in response to Mac Haik’s limitations affirmative

defense, Harper bears the burden to raise a fact issue regarding application of

the rule. See KPMG Peat Marwick , 988 S.W.2d at 748 ; J.M. Krupar Constr. Co. , 95 S.W.3d at

329 . In her affidavit, Harper stated: “I was not aware of my claims against [Mac

Haik] until such time as I sought legal advice from my attorney.” Harper offered nothing else to support her

contention that the discovery rule applies.

Harper does not state when she consulted her attorney, nor does she

detail any attempts she made to discover her injury or the impetus behind

consulting an attorney regarding this purchase.

An

affidavit that states conclusions without admissible supporting facts is not

proper summary judgment evidence. See Ryland Group, Inc. v. Hood , 924

S.W.2d 120, 122 (Tex. 1996) (“Conclusory affidavits are not enough to raise

fact issues. They are not credible, nor

susceptible to being readily controverted.”); Prime Prods., Inc. v. S.S.I. Plastics, Inc. ,

97 S.W.3d 631, 637 (Tex. App.—Houston [1st Dist.] 2002, pet. denied) (holding

that affidavits opposing summary judgment motions must set forth facts

admissible in evidence). We hold that

Harper did not raise a fact issue about the discovery rule so as to toll the

limitations beyond March 18, 2006 for a car purchase that took place on March

18, 2004, with a statement that she learned of her claim when she consulted an

attorney on an unidentified date. The

trial court correctly ruled that Harper’s DTPA and tortious interference claims

are barred by limitations.

B.

Fraud and Finance Code Claims

The Civil Practice and Remedies Code provides that a plaintiff must bring suit for a fraud claim

within four years from the date the cause of action accrues. See

Tex. Civ. Prac. & Rem. Code Ann.

§ 16.004(a )( 4) (Vernon 2002); see also Tex. Fin. Code Ann. § 349.402(a) (Vernon 2006) (“[A]n

action under this chapter must be brought before the later of (1) the fourth

anniversary of the date of the loan or retail installment transaction with

respect to which the violation occurred; or (2) the second anniversary of

the date on which the violation occurred.”).

In fraud cases, the statute of limitations does not begin to run until

the plaintiff discovers the fraud or might have discovered it through the

exercise of reasonable diligence. Little v. Smith , 943 S.W.2d 414, 420

(Tex. 1997); Computer Assocs. , 918

S.W.2d at 455 (“Similar to the discovery rule exception, where fraud is

alleged, we have granted the claimant the benefit of deferring the cause of

action until the claimant discovered or should have discovered the fraud.”).

Harper’s

summary judgment evidence does not create a fact issue on when she discovered

the nature of her injury beyond the date she purchased the car. Mac Haik’s alleged misrepresentations

occurred when Harper purchased the vehicle on March 18, 2004. Harper offers no evidence as to when she

discovered their fraudulent nature save for her affidavit that she “was not

aware of my claims against Defendant until such time as I sought legal advice

from my attorney.” Such an affidavit

does not defer limitations because it does not set forth facts establishing

that Harper did not discover, and with reasonable diligence, could not have

discovered the fraudulent nature of the representations so as to defer the

accrual date beyond when Mac Haik made the misrepresentations.

Second,

no evidence exists that Mac Haik “deceitfully conceal[ ed

its] wrongdoing until limitations [had] run.”

See S.V. , 933

S.W.2d at 6 . Harper discovered the fraud and asserted

fraud claims within the original limitations period. Harper has not raised a fact issue that the

injury here was inherently undiscoverable.

An injury is “inherently undiscoverable” if, due to the nature of the

injury, it is “unlikely to be discovered within the prescribed limitations

period despite due diligence” by the plaintiff.

Id. at 7 . Here, Harper discovered her injury within the

four-year limitations period, and brought suit within that period.

C.

Service of Suit and Limitations

Because we hold that the record

raises no issue of fact to apply the discovery rule to defer the accrual of Harper’s

fraud and Finance Code claims, we must determine whether Harper exercised

diligence in serving Mac Haik. A timely

filed suit does not interrupt the applicable statute of limitations unless the

plaintiff “exercises due diligence in the issuance and service of

citation.” Proulx v. Wells , 235 S.W.3d 213, 215 (Tex. 2007) (citing Murray v. San Jacinto Agency, Inc. , 800

S.W.2d 826, 830 (Tex. 1990)); Ashley v.

Hawkins , 293 S.W.3d 175, 179 (Tex. 2009) (“[S]ervice outside the

limitations period may still be valid if the plaintiff exercises diligence in

procuring service on the defendant.”). If

the plaintiff diligently effects service after limitations expires, the date of

service relates back to the date of filing.

Proulx , 235

S.W.3d at 215 .

Once

the defendant affirmatively pleads limitations and demonstrates that it was not

served until after limitations expired, the summary judgment burden shifts to

the plaintiff to explain the delay. Id. at 216 . The plaintiff must present evidence

demonstrating the efforts made to serve the defendant and explaining “every

lapse in effort or period of delay.” Id. ; Brown v. Shores , 77 S.W.3d 884, 887 (Tex. App.—Houston [14th Dist.]

2002, no pet.) (“Lack of diligence may be shown as a matter of law based

on unexplained lapses of time between the filing of the petition and service on

the defendant.”). Here, Harper sued Mac

Haik on December 21, 2007 and requested that the clerk issue and return citation

to her attorney’s office for service at a later date. The clerk issued citation on December 27;

however, Harper did not serve Mac Haik until March 19, 2008, one day after the

expiration of limitations. In her

summary judgment response, Harper asserted the discovery rule, but did not

offer any explanation for her delay in serving Mac Haik. Without an explanation for her delay in

serving Mac Haik, Harper’s claims are barred by limitations. The trial court thus properly granted summary

judgment.

Conclusion

We hold that limitations

bars Harper’s claims. We

therefore affirm the judgment of the trial court.

Jane Bland

Justice

Panel consists of Chief Justice

Radack and Justices Bland and Sharp.

[1] Harper does not challenge the trial court’s grant of

summary judgment on her negligent misrepresentation claim.