Mega Builders, Inc. and Mega Texas Realty, Inc. v. American Door Products, Inc. D/B/A A.J. May, Inc., Pearland Industries and Versatrac

Opinion issued March 19, 2013.

In The

Court of Appeals

For The

First District of Texas

————————————

NO. 01-12-00196-CV

———————————

MEGA BUILDERS, INC. AND MEGA TEXAS REALTY, INC., Appellants

V.

AMERICAN DOOR PRODUCTS, INC. D/B/A A.J. MAY, INC., PEARLAND

INDUSTRIES AND VERSATEC, Appellee

On Appeal from the 25th District Court

Colorado County, Texas

Trial Court Case No. 22,708

MEMORANDUM OPINION

Mega Builders, Inc. and Mega Texas Realty, Inc. contend, in a single issue

on appeal, that the trial court erred in granting a traditional summary judgment and

a no-evidence summary judgment in favor of American Door Products, Inc. d/b/a

A.J. May, Inc., Pearland Industries and Versatec (ADP) in this construction

dispute. We reverse and remand.

Background

This appeal arises from a dispute over the construction of a Best Western

hotel in Columbus, Texas. Mega Texas Realty, the property owner, hired Mega

Builders to serve as the general contractor for the hotel’s construction. Mega

Builders, in turn, contracted with ADP for the provision of doors and related

hardware for the hotel. The total contract price for the doors and hardware was

$79,722.88. When Mega Builders refused to pay more than $39,946.27 on the

contract, ADP filed a lawsuit to recover the $39,776.61 balance.1

ADP’s petition stated causes of action for breach of contract, sworn account,

and promissory estoppel against Mega Builders. Against both Mega Builders and

Mega Texas Realty, ADP asserted claims for quantum meruit and misapplication

of trust funds. ADP also alleged that Mega Texas Realty was responsible for Mega

Builder’s obligations under the alter-ego and single-business-enterprise theories of

liability. And finally, ADP sought foreclosure of its constitutional and statutory

liens and attorney’s fees.

1

ADP’s lawsuit named three defendants: Mega Builders, Mega Texas Realty, and

Mega Best Western Operations, LLC. The trial court dismissed the claims against

Mega Best Western in the final judgment. Only Mega Builders and Mega Texas

Realty appealed.

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Mega Builders and Mega Texas Realty generally denied the allegations in

ADP’s petition. The companies asserted that no further money was owed under the

contract because ADP “failed to perform the work in a good and workmanlike

manner” by drilling “holes [for locks] in the doors in the wrong locations causing

the locks to malfunction” and that, as a result, Mega Builders had incurred

“thousands of dollars in additional costs and damages[.]” Mega Builders also

pleaded counterclaims against ADP for breach of contract, breach of the implied

warranties of merchantability and fitness, declaratory judgment regarding the

validity of ADP’s liens, and attorney’s fees.

After the lawsuit had been pending for more than one year, ADP filed a

combined traditional and no-evidence motion for summary judgment. The motion

asserted that ADP had conclusive evidence of two of its own claims―breach of

contract and sworn account―and that Mega Builders had no evidence of its

contract counterclaim. ADP also requested that, as part of the summary judgment

proceedings, the trial court order judicial foreclosure of ADP’s liens and award

attorney’s fees. The trial court granted ADP’s motion for summary judgment in all

respects. Then, having been awarded all of the relief it requested, ADP moved to

dismiss its remaining claims against Mega Builders and Mega Texas Realty and

for entry of final judgment.

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Pursuant to ADP’s motion and in accordance with its summary judgment

order, the trial court rendered judgment for ADP and against Mega Builders. The

final judgment provided that:

1. . . . [ADP] recover damages from MEGA BUILDERS . . . in the

sum of THIRTY NINE THOUSAND SEVEN HUNDRED

SEVENTY-SIX AND 61/00 DOLLARS ($39,776.61), post-

judgment interest on the total sum at the annual rate of 6%, and

costs of Court.

2. . . . [ADP] was granted the right to judicially foreclose its

constitutional lien against [Mega Texas Realty’s property].

3. . . . [ADP] is awarded judicial foreclosure of its constitutional

lien against the legal property above described to collect the

judgment for THIRTY NINE THOUSAND SEVEN

HUNDRED SEVENTY-SIX AND 61/00 DOLLARS

($39,776.61) in actual damages, its reasonable and necessary

attorney’s fees, post-judgment interest on the total sum at the

annual rate of 6% and costs of Court.

4. In the alternative, [ADP] was granted the foreclosure of its

removables lien on materials it provided to MEGA BUILDERS

. . . , in use by MEGA REALTY . . . at the property legally

described above. . . . [ADP] shall have the right to enter and

remove property installed at the above described property

pursuant to its removables liens on such material located at the

aforementioned property, and may proceed thereon at its own

election.

5. . . . The Court ORDERS and AWARDS MEGA BUILDERS

. . . to pay [ADP] the sum of TEN THOUSAND FOUR

HUNDRED NINEY-TWO AND 60/00 DOLLARS

($10,492.60) for attorney’s fees.

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The trial court further ordered all remaining claims not addressed in the final

judgment dismissed, thereby making the judgment final and appealable. 2

Standard of Review

ADP filed a combined traditional and no-evidence motion for summary

judgment. On its own claims for breach of contract, sworn account, judicial

foreclosure of liens, and attorney’s fees, ADP sought a traditional summary

judgment. See TEX. R. CIV. P. 166a(c). On Mega Builders’ counterclaim for breach

of contract, ADP sought a no-evidence summary judgment. See TEX. R. CIV. P.

166a(i). We review the trial court’s grant of summary judgment de novo, and we

apply the standard of review appropriate for each type of summary judgment

motion. See Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005);

Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997) (explaining

2

The record indicates that, at the time the trial court rendered its final judgment,

Mega Builders’ counterclaims for breach of implied warranties and declaratory

judgment were still pending. ADP did not move for summary judgment on those

counterclaims, and the record does not indicate that Mega Builders non-suited or

otherwise abandoned them. Nevertheless, the parties do not dispute the finality of

the trial court’s judgment for purposes of appeal. The judgment expressly states

that ADP prevails and Mega Builders takes nothing; that all claims not addressed

in the judgment are dismissed; and that the judgment is final, disposes of all

claims and all parties, and is appealable. M.O. Dental Lab v. Rape, 139 S.W.3d

671, 673 (Tex. 2004) (per curiam); see also Lehmann v. Har-Con Corp., 39

S.W.3d 191, 200 (Tex. 2001) (stating that order or judgment entered before

conventional trial on the merits is final for purposes of appeal if it actually

disposes of every pending claim and party or if it states “with unmistakable

clarity” that it finally disposes of all claims and parties). Mega Builders has not

raised an issue challenging the trial court’s dismissal of its other counterclaims in

the final judgment.

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traditional standard); Flameout Design & Fabrication, Inc. v. Pennzoil Caspian

Corp., 994 S.W.2d 830, 834 (Tex. App.—Houston [1st Dist.] 1999, no pet.)

(explaining no-evidence standard).

Traditional Summary Judgment on ADP’s Claims

Mega Builders and Mega Texas Realty first challenge the trial court’s

traditional summary judgment on ADP’s claims for (1) breach of contract, (2)

sworn account, (3) judicial foreclosure of liens, and (4) attorney’s fees.

Under the traditional-summary-judgment standard, ADP had the burden to

show that no genuine issue of material fact existed and that it was entitled to

judgment as a matter of law. TEX. R. CIV. P. 166a(c); KPMG Peat Marwick v.

Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). Summary

judgment for ADP, the plaintiff here, was proper if ADP conclusively established

each element of its causes of action. Unless ADP conclusively established its

causes of action, Mega Builders and Mega Texas Realty had “no burden to respond

to [the] summary judgment motion.” M.D. Anderson Hosp. & Tumor Inst. v.

Willrich, 28 S.W.3d 22, 23 (Tex. 2000); see also Rizkallah v. Conner, 952 S.W.2d

580, 582−83 (Tex. App.—Houston [1st Dist.] 1997, no writ) (holding that lack of

response by nonmovant “does not supply by default the summary judgment proof

necessary to establish the movant’s right to summary judgment”) (citing

McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 343 (Tex. 1993)).

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However, “a party who fails to expressly present to the trial court any written

response in opposition to a motion for summary judgment waives the right to raise

any arguments or issues post-judgment.” Unifund CCR Partners v. Weaver, 262

S.W.3d 796, 797 (Tex. 2008). Because a motion for summary judgment must stand

on its own merit, Mega Builders and Mega Realty―even without filing a response

to all of ADP’s summary judgment allegations in the trial court―still may argue

on appeal that ADP’s summary judgment proof was insufficient as a matter of law.

See Grace v. Titanium Electrode Prods., Inc., 227 S.W.3d 293, 297 (Tex. App.—

Houston [1st Dist.] 2007, no pet.) (stating that nonmovant may complain about

insufficiency of movant’s summary judgment proof on appeal even if nonmovant

did not file response to motion); Rizkallah, 952 S.W.2d at 582−83 (same); Jones v.

Legal Copy, Inc., 846 S.W.2d 922, 924 (Tex. App.—Houston [1st Dist.] 1993, no

writ) (same). We take as true all evidence favorable to Mega Builders and Mega

Texas Realty, the nonmovants, and indulge every reasonable inference in their

favor. See Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 549 (Tex. 1985).

A. Breach of Contract

The elements of ADP’s breach of contract claim are: (1) the existence of a

valid contract; (2) ADP’s performance or tendered performance; (3) Mega

Builders’ breach of the contract; and (4) damages sustained by ADP as a result of

the breach. See Wright v. Christian & Smith, 950 S.W.2d 411, 412 (Tex. App.—

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Houston [1st Dist.] 1997, no writ). The parties do not dispute that a valid contract

existed for the manufacture and purchase of doors and related hardware, that ADP

delivered doors and hardware to Mega Builders, that ADP made some repairs to

the doors, and that Mega Builders did not pay the total contract price. The parties’

only disagreement is regarding whether ADP’s doors complied with the contract

specifications. Thus, we consider the performance element of ADP’s contract

claim. ADP argues that it conclusively demonstrated the absence of a fact issue

regarding its performance. Mega Builders argues that a material fact issue existed

as to whether ADP delivered defective doors and Mega Builders therefore was

relieved of its obligation to pay the full contract price. We agree with Mega

Builders that a fact issue precluded summary judgment on ADP’s contract claim.

1. ADP’s summary judgment motion and evidence

Regarding performance, ADP argued that it conclusively established its

compliance with the contract by delivery of the contracted-for materials. The

traditional summary judgment motion stated:

ADP performed its obligations under the contract, delivering

conforming goods and making repairs requested (and accepted) by

MEGA BUILDERS. MEGA BUILDERS has never claimed, nor has

it produced any evidence, that ADP failed to deliver the materials

ordered under the contract. Upon hearing MEGA BUILDERS’

proffered excuse for failure to pay the invoices, a private investigator

was dispatched to [the hotel] and confirmed that there were no

apparent defects with the doors. Furthermore, [the hotel’s] quality

assurance inspection made no mention of defective doors.

Notwithstanding the ADP-MEGA BUILDERS contract terms, MEGA

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BUILDERS promised to pay outstanding invoices upon a favorable

[hotel] inspection. Nonetheless, no further payments have been

remitted.

ADP supported these statements with (1) a verification from its president that the

facts stated in ADP’s original petition were true and correct, (2) a “Detail Aged

Trial Balance” sheet showing the amounts ADP invoiced to Mega Builders and the

balance due on the invoices, (3) email communications between representatives of

ADP and Mega Builders related to the repair needs for the doors and ADP’s

demand for payment from Mega Builders, (4) a private investigator’s report of an

on-site investigation of the doors, and (5) the hotel’s quality assurance report

addressing the conditions of the property.

2. Mega Builders’ summary judgment response and evidence

Mega Builders’ response on the issue of ADP’s performance alleged that

Mega Builders was justified in withholding the balance of the contract price

because ADP failed to perform under the contract by delivering “non-conforming”

doors. Specifically, regarding performance, Mega Builders’ response stated:

[Mega Builders] sent the specifications and shop drawings, including

showing where to drill the holes in the doors to install the locks, to

[ADP] for its review and compliance. . . . [The] template [was not]

followed by [ADP] as directed by [Mega Builders]. . . . [ADP] was

notified and it sent out its representatives to correct the holes as

directed by the template. . . . Because the original holes [ADP] drilled

and the subsequent holes drilled by [ADP] to fit the template[ ] are

right next to each other, with time and use of the doors[,] including[ ]

the opening and shutting of the doors, this has caused the holes which

are side by side to become one larger hole causing the locks on the

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doors to shake, move and loosen. The result is that the sensitive

electronic locks malfunction and will not operate properly to allow for

the room doors to open and close and lock as required.

Mega Builders supported these statements with the affidavit of its president,

Dhananjay Mody, averring that the doors were non-conforming for the reasons

stated in the response. Attached to Mody’s affidavit were copies of (1) the template

provided to ADP for drilling the holes in the doors, (2) documents purported to be

invoices from Mega Builders’ locksmiths and painter showing the costs incurred

by Mega Builders to repair or replace the defective doors, and (3) the same email

communications attached to ADP’s summary judgment motion.

ADP argues that Mody’s affidavit and its attachments are not competent

summary judgment evidence. In the trial court, ADP objected that the affidavit was

conclusory because Mody’s averments regarding the repair and replacement costs

incurred by Mega Builders were not supported by documentary evidence (e.g.,

photographs, bids, invoices, cancelled checks, payment drafts, or receipts) showing

that the doors delivered by ADP were non-conforming and that Mega Builders had

incurred, or would incur, replacement costs. ADP renews those objections in this

Court and also objects for the first time on appeal that the attachments to Mody’s

affidavit were not properly authenticated. However, we do not reach the

competency of Mody’s affidavit or the admissibility of its attachments in passing

upon the trial court’s traditional summary judgment because, for reasons discussed

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below, we conclude that ADP’s own summary judgment evidence does not

constitute conclusive proof of ADP’s performance under the contract. We therefore

reserve the competency and admissibility issues for our discussion of other claims.

3. The fact issue regarding ADP’s performance

The law requires ADP’s motion for traditional summary judgment to stand

on its own merit. See Grace, 227 S.W.3d at 297; Rizkallah, 952 S.W.2d at 582−83;

Jones, 846 S.W.2d at 924. Viewed in the light most favorable to Mega Builders,

the evidence relevant to the performance issue and attached to ADP’s summary

judgment motion does not entitle ADP to judgment as a matter of law.

We begin with the emails attached to ADP’s summary judgment motion,

which are communications between representatives of ADP and Mega Builders

related to the repair of the doors and ADP’s demand for payment. ADP does not

dispute that it was contractually obligated to drill holes for the installation of locks

or that Mega Builders provided a template for the proper placement of the holes.

That there was a problem with the holes ADP drilled is established by the emails.

In the first email, Mody, presumably in response to a payment demand from ADP,

informed Luis Castillo, the ADP representative, that Mega Builders would “release

some funds.” Mody explained in the same email that Best Western had inspected

the hotel property: “If inspection fails on doors, frames, hardware you supply, then

we have problem otherwise we release the full funds.” Fourteen days later, Castillo

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wrote to inquire why the “full funds” had not been released. Mody responded that

Mega Builders had replaced thirty-five doors and asked, “[W]ho is going to pay for

all this mess?” The parties exchanged five more emails regarding the repair of the

doors and Mega Builders’ obligation to pay. This email from Mody to Castillo

complaining about ADP’s work is the parties’ final communication:

Contrary to ADP’s assertion, these emails do not conclusively establish that ADP

performed under the contract by delivering the doors and by “making repairs

requested (and accepted) by” Mega Builders.

Perhaps recognizing that the emails themselves were problematic, ADP

argued in its reply to Mega Builders’ summary judgment response that the trial

court should disregard the emails to the extent they raised an issue of fact as to

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whether the doors were deficient because the doors passed inspection by Best

Western.3 ADP has provided this Court with only a general citation to the entire

quality assurance report. ADP has not provided any substantive discussion of the

report or made any effort to explain how it demonstrates ADP’s performance as a

matter of law. After independently reviewing the report, we disagree that it

constitutes conclusive proof that ADP either delivered conforming doors or

adequately repaired the doors that were non-conforming.

Although the report states that the hotel property complied with “all locking

device requirements,” the inspector noted at least four instances of damage to or

“poor workmanship in repair” of doors. The doors described as damaged or

suffering from “poor workmanship in repair” included the doors to guest rooms

320 and 423, the women’s public restroom on the first floor, and a meeting room.

Regarding the “poor workmanship” on the door to guest room 423, the inspector

noted in parenthesis that the “wrong shade of paint [was] used for touch up.” But

with respect to the other three doors, the inspector did not explain the “poor

workmanship” or damage observed. ADP’s summary judgment motion and

3

To the extent ADP argues that the email promising to release funds upon passing

the Best Western inspection was a new contract, we reject that proposition as a

ground for summary judgment in this case. ADP did not plead it or state it as a

basis for summary judgment in its motion. ADP did not raise the issue until it filed

its reply to Mega Builders’ summary judgment response.

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evidence do not address these discrepancies or state that the doors at issue were not

doors manufactured or repaired by ADP.

Neither is the private investigator’s report―entitled “Asset & Liability

Investigation, Site Visit”―affirmative evidence that ADP performed under the

contract by delivering the doors and “making repairs requested (and accepted) by”

Mega Builders. The report states in pertinent part:

I met with Mr. Manish the manager of the Best Western Columbus

Inn & Suites. I introduced myself and stated the purpose of my visit. I

asked to speak with Mr. Dhananjay Mody aka DJ. Mr. Manish stated,

“DJ is not here; . . . .” I advised Mr. Manish that I needed to take some

pictures of doors that were said to be nonfunctional. Mr. Manish did

not understand so I clarified by saying “doors that did not close or

open properly or that were hung wrong.” Mr. Manish accompanied

me while I took several pictures on the ground floor. He stated that he

did not know of any door(s) that were not operating properly. We took

the elevator to the 4th floor and worked down to the 2nd floor where he

said that there was a door to a storage area that may not be locking

properly. I took a picture of the door. I asked Mr. Manish if he knew

of any problems with the construction at the facility. He stated “not

that I know of.”

First, the investigator noted at least one instance of a door that was not locking

properly―a “storage area” door. Again ADP’s summary judgment motion and

evidence do not address this discrepancy or state that the storage door at issue was

not a door manufactured by ADP. Second, regarding the other doors on the

property, the report does not establish that the investigator asked the manager

whether the locks on any of the doors were not functional because of the misplaced

holes. The only question the investigator reported having asked was whether the

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manager knew of any doors that “did not close or open properly or that were hung

wrong.” Third, the report does not establish that the manager was a person with

knowledge of the contract specifications, the locking mechanisms, or the problems

relayed by Mody to Castillo in the emails discussed above.

Under the applicable standard of review, we conclude that a genuine issue of

fact exists as to whether ADP performed under the contract. Thus, the trial court

erred in granting traditional summary judgment on ADP’s breach of contract

claim.

B. Sworn Account

We next consider whether ADP’s sworn account claim can sustain the trial

court’s judgment. Mega Builders contends that the summary judgment on ADP’s

counterclaim cannot be affirmed because Mega Builders filed a “sworn denial

stating that the account was not just or true and that all just and lawful offsets had

not been allowed and that ADP failed to perform the work in a good and

workmanlike manner causing the locks to malfunction and resulting in damages

claimed as an offset.”

A suit on a sworn account is “a procedural tool that limits the evidence

necessary to establish a prima facie right to recovery on certain types of accounts.”

Williams v. Unifund CCR Partners Assignee of Citibank, 264 S.W.3d 231, 234

(Tex. App.—Houston [1st Dist.] 2008, no pet.); see TEX. R. CIV. P. 185. In order to

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establish sufficient evidence to support a prima facie case in its suit on a sworn

account, as well as summary disposition of the case, ADP must have strictly

adhered to rule 185, which governs suits on sworn accounts. See TEX. R. CIV. P.

185; Powers v. Adams, 2 S.W.3d 496, 498 (Tex. App.—Houston [14th Dist.] 1999,

no pet.); Andrews v. E. Tex. Med. Ctr.-Athens, 885 S.W.2d 264, 267 (Tex. App.—

Tyler 1994, no writ). “Rule 185 is not a rule of substantive law. Rather, it is a rule

of procedure regarding the evidence necessary to establish a prima facie right of

recovery.” Panditi v. Apostle, 180 S.W.3d 924, 926 (Tex. App.—Dallas 2006, no

pet.) (citations omitted). Rule 185 defines an open account to include “any claim

for a liquidated money demand based upon written contract . . . , or [ ] for . . . labor

done or labor or materials furnished.” TEX. R. CIV. P. 185. Under this rule, a

plaintiff’s petition on a sworn account must contain “a systematic, itemized

statement of the goods or services sold, . . . reveal offsets made to the account, and

[ ] be supported by an affidavit stating the claim is within the affiant’s knowledge,

and that it is ‘just and true.’” Andrews, 885 S.W.2d at 267; see also Panditi, 180

S.W.3d at 926 (stating requirements for sworn account petition and accompanying

affidavit, including requirement that account “show with reasonable certainty the

name, date, and charge for each item, and provide specifics or details as to how the

figures were arrived at”); Nguyen v. Short, How, Frels & Heitz, P.C., 108 S.W.3d

558, 562 (Tex. App.—Dallas 2003, pet denied) (same). “General statements . . .

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without description of specific items are insufficient to comply with Rule 185.”

Jones v. Ben Maines Air Conditioning, Inc., 621 S.W.2d 437, 439 (Tex. App.—

Texarkana 1981, no writ). If there is a deficiency in the plaintiff’s sworn account,

the account will not constitute prima facie evidence of the debt. See Enernational

Corp. v. Exploitation Eng’rs, Inc., 705 S.W.2d 749, 750 (Tex. App.—Houston [1st

Dist.] 1986, writ ref’d n.r.e.).

In the same context, the defendant’s denial must be written and supported by

an affidavit denying the account. See TEX. R. CIV. P. 93(10), 185; Andrews, 885

S.W.2d at 267. When a defendant files a sworn denial of the plaintiff’s account in

the form required by rule 185, the evidentiary effect of the itemized account is

destroyed and the plaintiff is forced to put on proof of its claim. See Roberts

Express, Inc. v. Expert Transp., Inc., 842 S.W.2d 766, 770 (Tex. App.—Dallas

1992, no writ); Thorp v. Adair & Myers, 809 S.W.2d 306, 307 (Tex. App.—

Houston [14th Dist.] 1991, no writ); United Bus. Machs. v. Entm’t Mktg., Inc., 792

S.W.2d 262, 263−64 (Tex. App.—Houston [1st Dist.] 1990, no writ) (finding that

even when defendant verifies its sworn denial to suit on sworn account, “[a]

plaintiff can properly recover summary judgment . . . if it files legal and competent

summary judgment evidence establishing the validity of its claim as a matter of

law.”). On the other hand, when a defendant fails to file a verified denial to a

sworn account, the sworn account is received as prima facie evidence of the debt

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and the plaintiff is entitled to summary judgment on the pleadings. See Andrews,

885 S.W.2d at 267 (concluding that defendant who does not properly file written

denial under oath will not be permitted to dispute the receipt of services or

correctness of charges); Tex. Dep’t of Corrs. v. Sisters of St. Francis of St. Jude

Hosp., 753 S.W.2d 523, 524 (Tex. App.—Houston [1st Dist.] 1988, no writ);

Enernational Corp., 705 S.W.2d at 750. In other words, a defendant’s

noncompliance with rule 185 conclusively establishes that there is no defense to

the suit on the sworn account. See Enernational Corp., 705 S.W.2d at 750.

ADP’s live petition did not comply with the requirements of rule 185

because, although ADP’s president verified that the account was within his

knowledge and was “just and true,” ADP did not include any systematic or

itemized record of the parties’ transaction. Thus, ADP’s pleadings did not

constitute prima facie evidence of Mega Builders’ debt. See Panditi, 180 S.W.3d at

927 (“If there is a deficiency in the plaintiff’s sworn account, the account will not

constitute prima facie evidence of the debt.”); see also Enernational Corp., 705

S.W.2d at 750. The only itemized statement of the amounts owed by Mega

Builders was attached to ADP’s summary judgment motion, not to any of its

petitions. We decline to hold that ADP’s summary judgment evidence cured the

deficiency in its sworn account petition. This Court and others have determined

that a sworn denial of an account in a response to a summary judgment motion

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does not satisfy the strict requirements of rule 185. See Cooper v. Scott Irrigation

Constr., Inc., 838 S.W.2d 743, 746 (Tex. App.—El Paso 1992, no writ); Rush v.

Montgomery Ward, 757 S.W.2d 521, 523−24 (Tex. App.—Houston [14th Dist.]

1988, writ denied); Bavishi v. Sterling Air Conditioning, Inc., No. 01-10-00610-

CV, 2011 WL 3525417, at *7 (Tex. App.—Houston [1st Dist.] Aug. 11, 2011, no

pet.) (mem. op.). The same conclusion applies to deficiencies in a plaintiff’s sworn

account―they cannot be cured in a summary judgment motion.

Even had ADP complied with the requirements of rule 185, it would not

have been entitled to summary judgment on its sworn account claim. Mega

Builders filed a verified answer, putting ADP to proof its claim. And ADP does not

challenge the sufficiency of Mega Builders’ verified answer denying the account.

As the plaintiff in a suit on an account, ADP was required to prove that all lawful

offsets, payments, and credits had been applied to its account with Mega Builders.

See Panditi, 180 S.W.3d at 926. Our conclusion that a genuine issue of fact exists

as to whether ADP performed under the contract precludes a holding that ADP

established as a matter of law that all lawful offsets, payments, and credits had

been applied to the account. We hold instead that the trial court erred in granting

traditional summary judgment on ADP’s sworn account claim.

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C. Remedies

Given our holding of error with respect to the traditional summary judgment

in favor of ADP, it is not necessary for us to address the foreclosure and attorney’s

fees issues. Having failed to demonstrate its entitlement to summary judgment on

either its breach of contract or sworn account claims, ADP was not entitled to

summary judgment for foreclosure or attorney’s fees. See TEX. CIV. PRAC. & REM.

CODE ANN. § 38.001(7), (8) (West 2008); Green Int’l, Inc. v. Solis, 951 S.W.2d

384, 390 (Tex. 1997) (holding that party must prevail and recover damages to be

entitled to attorney’s fees under section 38.001(8)).

No-Evidence Summary Judgment on Mega Builders’ Counterclaim

Mega Builders also challenges the no-evidence summary judgment on its

breach-of-contract counterclaim. Mega Builders’ counterclaim rests on the same

factual allegations as its defense to ADP’s claims: ADP drilled holes for locks in

the wrong location on sixty-six of the doors it manufactured; as a result, the locks

installed on those doors did not function correctly; the problem was not

resolved―but instead actually worsened―when ADP re-drilled the holes; and

Mega Builders incurred repair and replacement costs. Our conclusion that a fact

issue precluded summary judgment on ADP’s contract claim does not dictate the

same conclusion regarding the no-evidence summary judgment on Mega Builders’

contract claim. We determined that ADP was not entitled to judgment as a matter

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of law based on the insufficiency of its own summary judgment evidence, not as a

result of any fact issue raised by Mega Builders. We have not resolved the issue of

whether, in responding to ADP’s no-evidence motion, Mega Builders presented

evidence raising genuine fact issues on its own contract claim. We turn to that

issue now.

ADP’s no-evidence motion was properly granted if (1) ADP asserted that

there was no evidence of one or more essential elements of the claim for which

Mega Builders had the burden of proof at trial and (2) Mega Builders produced no

summary judgment evidence raising a genuine issue of material fact on those

elements. See TEX. R. CIV. P. 166a(i). Mega Builders was not obligated to marshal

its proof, but it was required to present evidence raising genuine fact issues on the

challenged elements. Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex.

2002).

In moving for no-evidence summary judgment, ADP asserted that Mega

Builders had no evidence of (1) breach on ADP’s part, (2) performance or tendered

performance on Mega Builders’ part, or (3) damages. This satisfied ADP’s initial

burden, as stated in rule 166a(i). See TEX. R. CIV. P. 166a(i); Johnson v. Brewer &

Pritchard, P.C., 73 S.W.3d 193, 207 (Tex. 2002); Mathis v. RKL Design/Build,

189 S.W.3d 839, 844 (Tex. App.—Houston [1st Dist.] 2006, no pet.); Flameout

Design & Fabrication, 994 S.W.2d at 834. Accordingly, the burden shifted to

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Mega Builders to provide some evidence, more than a scintilla, that raised a fact

issue concerning whether ADP breached; Mega Builders performed, tendered

performance, or was excused from performing; and Mega Builders sustained

damages. The burden having shifted to Mega Builders, the trial court had a duty,

pursuant to rule 166a(i), to grant ADP’s no-evidence motion for summary

judgment unless Mega Builders responded to that motion by producing more than

a scintilla of evidence that raised a genuine issue of material fact on the three

challenged elements. See TEX. R. CIV. P. 166a(i); Sw. Elec. Power Co., 73 S.W.3d

at 215; Rueda v. Paschal, 178 S.W.3d 107, 109 (Tex. App.—Houston [1st Dist.]

2005, no pet.).

In support of its counterclaim, Mega Builders presented the affidavit of its

president, Dhananjay Mody, and three attachments, which included copies of (1)

the door template Mega Builders provided ADP, (2) invoices from Mega Builders’

locksmiths and painter, and (3) the email correspondence between Mega Builders

and ADP that was also attached to ADP’s summary judgment motion. Mega

Builders contends that the Mody affidavit and its attachments raised a fact issue as

to each of the challenged elements of its counterclaim. But ADP argues that the

trial court could not have considered Mega Builders’ summary judgment evidence

because the Mody affidavit was conclusory and its attachments were not properly

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authenticated. The trial court did not rule on ADP’s objections to Mega Builders’

summary judgment evidence.

To preserve objections to the form of summary judgment evidence for

appeal, a party must both make an objection in the trial court and obtain a ruling at

or before the summary judgment hearing. Vice v. Kasprzak, 318 S.W.3d 1, 11

(Tex. App.—Houston [1st Dist.] 2009, pet. denied); see TEX. R. APP. P. 33.1(a)(1);

TEX. R. CIV. P. 166a(f). “[A] trial court’s ruling on an objection to summary-

judgment evidence is not implicit in its ruling on the motion for summary

judgment.” Delfino v. Perry Homes, 223 S.W.3d 32, 35 (Tex. App.—Houston [1st

Dist.] 2006, no pet.) (citing Well Solutions, Inc. v. Stafford, 32 S.W.3d 313, 317

(Tex. App.—San Antonio 2000, no pet.)). Objections to improper authentication

are defects in form, which require a ruling for appellate review. See TEX. R. CIV. P.

166a(f); Commint Technical Servs., Inc. v. Quickel, 314 S.W.3d 646, 651 (Tex.

App.—Houston [14th Dist.] 2010, no pet.) (holding that objection that summary

judgment evidence is not properly authenticated is objection to form); Gomez v.

Allstate Tex. Lloyds Ins. Co., 241 S.W.3d 196, 202 (Tex. App.—Fort Worth 2007,

no pet.) (finding waiver when objection to authenticity of summary judgment

evidence was raised for first time in motion for new trial); Petro-Hunt, L.L.C. v.

Wapiti Energy, L.L.C., No. 01-10-01030-CV, 2012 WL 761144, at *4 (Tex.

App.—Houston [1st Dist.] Mar. 8, 2012, pet. denied) (mem. op.); Petroleum

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Analyzer Co. L.P. v. Olstowski, No. 01-09-00076-CV, 2010 WL 2789016, at *20

(Tex. App.—Houston [1st Dist.] July 15, 2010, no pet.) (mem. op.). However, an

objection that statements in an affidavit are conclusory is a defect of substance,

which may be raised for the first time on appeal. See Dodge v. Durdin, 187 S.W.3d

523, 532 (Tex. App.—Houston [1st Dist.] 2005, no pet.) (citing Rizkallah, 952

S.W.2d at 585); Green v. Indus. Specialty Contractors, 1 S.W.3d 126, 130 (Tex.

App.—Houston [1st Dist.] 1999, no pet.).

Because ADP did not secure a ruling on its objections to Mega Builders’

summary judgment evidence, only its objections that assert a defect of substance

are preserved. See Vice, 318 S.W.3d at 11. The only such objection is ADP’s

contention that Mody’s affidavit was conclusory. ADP contends the affidavit was

conclusory because Mody’s conclusions that the doors were “non-conforming” and

that Mega Builders would incur more than $44,000 in replacement costs were not

supported by facts or other competent summary judgment evidence. The affidavit

was conclusory if it stated “a conclusion without any explanation” or asked the

factfinder to “take [Mody’s] word for it.” Arkoma Basin Exp. Co. v. FMF Assocs.

1990-A Ltd., 249 S.W.3d 380, 389 (Tex. 2008); see also Rizkallah, 952 S.W.2d at

587 (“A conclusory statement is one that does not provide the underlying facts to

support the conclusion.”); Black’s Law Dictionary 308 (9th ed. 2009) (defining

“conclusory” as “[e]xpressing a factual inference without stating the underlying

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facts on which the inference is based”). If the affidavit contained conclusory

statements―statements that failed to provide the underlying facts to support the

conclusion―it was not proper summary judgment evidence. See Prime Prods., Inc.

v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 637 (Tex. App.—Houston [1st Dist.] 2002,

pet. denied); Dolcefino v. Randolph, 19 S.W.3d 906, 925−27 (Tex. App.—Houston

[14th Dist.] 2000, pet. denied).

Mody, as president of Mega Builders, made his affidavit on personal

knowledge, as the person who “supervised the construction process[,] including the

ordering and installation of doors.” Regarding ADP’s performance, Mody stated

that ADP delivered sixty-six “non-conforming” doors. Contrary to ADP’s

assertions, Mody’s affidavit demonstrates the factual basis for his conclusion that

sixty-six of the doors provided by ADP did not conform to the contract

specifications. Mody explained that Mega Builders sent ADP a template, a copy of

which was attached to his affidavit, showing “where to drill the holes in the doors

to install the locks.” He described the defects in the doors, stating that, when the

time came for installation of the locks, the lock supplier “discovered that the . . .

template had not been followed by [ADP] as directed by [Mega Builders]”; “[t]he

holes on the lock did not match the drilled holes.” Mody stated that ADP was

notified of the problem, and ADP “sent out its representatives to correct the holes

as directed by the template.” However, ADP “redrilled the holes in the doors close

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to and next to the original holes after [the doors] had been installed. Because the

original holes [ADP] drilled and the subsequent holes drilled by [ADP] to fit the

template are right next to each other, with time and use of the doors[,] including[ ]

the opening and shutting of the doors, this has caused the holes which are side by

side to become one larger hole causing the locks on the doors to shake, move and

loosen.” He further explained, “The result is that the sensitive electronic locks

malfunction and will not operate properly to allow for the room doors to open and

close and lock as required.” With respect to the statement that the doors were “non-

conforming,” we conclude that Mody’s affidavit was not conclusory and was some

evidence of the breach and performance elements of Mega Builders’ contract

counterclaim.

We need not decide whether Mody’s statement regarding the cost to replace

the allegedly “non-conforming” doors was conclusory. Mega Builders presented

other evidence of damages to which ADP did not object. Specifically, Mody

averred that Mega Builders spent $12,669 repairing doors in twenty-five guest

rooms. Mega Builders attached to Mody’s affidavit invoices from its locksmiths

and painter showing the costs to repair some of the guest room doors. Viewed in

the light most favorable to Mega Builders, the unobjected-to portions of Mody’s

affidavit and its attachments were some evidence of the damage element of Mega

Builders’ contract counterclaim.

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Because Mega Builders presented some evidence as to each of the elements

of its contract counterclaim challenged by ADP―breach, performance, and

damages―the trial court’s no-evidence summary judgment on that claim was

improper.

Conclusion

Having concluded that the trial court erred by (1) granting a traditional

summary judgment on ADP’s affirmative claims for breach of contract and sworn

account and awarding ADP judicial foreclosure of its liens and attorney’s fees and

(2) granting a no-evidence summary judgment on Mega Builders’ counterclaim,

we sustain Mega Builders’ issue on appeal. We reverse the trial court’s judgment

and remand for further proceedings consistent with this opinion.

Harvey Brown

Justice

Panel consists of Chief Justice Radack and Justices Higley and Brown.

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