File: 061539F - From documents
Opinion issued January 29, 2008
Court of Appeals
District of Texas at Dallas
RODNEY R. ELKINS, Appellant
CAPITAL ONE BANK AND CAPITAL ONE
SERVICES, INC., Appellees
On Appeal from the County Court at Law No.
Trial Court Cause No.
Before Justices Whittington, Bridges and Francis
Opinion By Justice Whittington
Following a bench trial,
Rodney R. Elkins appeals the take nothing judgment entered in favor of Capital One Bank and Capital One Services, Inc.
(collectively “Capital One”). In five issues Elkins contends the trial judge
erred in (i) failing to award Elkins damages and attorney's fees, (ii) admitting
certain evidence, (iii) failing to grant Elkins declaratory relief, (iv) failing
to find a breach of contract, and (v) failing to find in favor of Elkins on his
claim of defamation. On cross-appeal, Capital One contends the trial judge erred
in failing to grant the motion to strike portions of Elkins's pleading. We
affirm the trial court's judgment.
Elkins applied for a
credit card with Capital One in September 2003. Elkins used the credit card to pay for a skin care product he ordered from
GRC*Proactiv Solution in late 2003 or early 2004. Every two months, Proactiv
sent Elkins additional product and charged Elkins's Capital One credit card for
the product. In September 2004, Elkins notified Capital One he wanted to close
his credit card account. The following month, when Proactiv sent Elkins
additional skin care product and charged the amount due to Elkins's credit card,
Capital One reopened the credit card account and billed Elkins. When Elkins
complained to Capital One, the company reminded Elkins in writing of the terms
of their agreement that provided for the reopening of his account. Only after
Elkins contacted Proactiv did the company cease periodic shipment of the product
and stop charges to his credit card account.
Elkins sued Capital One
for breach of contract, violations of federal and statutory regulations, defamation, negligence and gross negligence, for
which he sought a declaratory judgment, damages and attorney's fees. Following a
bench trial, the trial court entered a take- nothing judgment in favor of
Capital One. The trial court also entered findings of fact and conclusions of
Legal and Factual Sufficiency
Standards of Review
Findings of fact in a
nonjury trial have the same force and effect as a jury's verdict. Compass Bank v. MFP Fin. Servs., Inc., 152
S.W.3d 844, 851 (Tex. App.-Dallas 2005, pet. denied) (citing Catalina v.
Blasdel, 881 S.W.2d 295, 297 (Tex. 1994)). When a complete reporter's record
is filed, the trial judge's fact findings may be reviewed for legal and factual
sufficiency under the same standards as jury verdicts. Compass Bank, 152
S.W.3d at 851 (citing Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996)
(per curiam)). In doing so, we do not substitute our judgment for that of the
fact finder, even if we would have reached a different conclusion when reviewing
the evidence. FDIC v. F & A Equip. Leasing, 854 S.W.2d 681, 684-85
(Tex. App.-Dallas 1993, no writ). Unchallenged findings of fact are conclusive
on appeal unless the contrary is established as a matter of law or there is no
evidence to support the findings. Toles v. Toles, 45 S.W.3d 252, 265 n. 6
(Tex. App.-Dallas 2001, pet. denied) (citing McGalliard v. Kuhlmann, 722
S.W.2d 694, 696 (Tex. 1986)). We evaluate a trial judge's conclusions of law
independently, determining whether the trial judge drew the correct legal
conclusions from the facts. Dallas Morning News Co. v. Bd. of Trustees of
Dallas Indep. Sch. Dist., 861 S.W.2d 532, 536 (Tex. App.-Dallas 1993, writ
A party challenging the
legal sufficiency of an adverse finding on an issue on which that party had the burden of proof at trial must demonstrate on
appeal that the evidence conclusively established, as a matter of law, all vital
facts in support of the issue. Dow Chem. Co. v. Francis, 46 S.W.3d 237,
241 (Tex. 2001). In reviewing a matter of law challenge, we first examine the
record for evidence that supports the adverse finding, while ignoring all
evidence to the contrary. Dow Chem. Co., 46 S.W.3d at 241 (citing
Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989)). We indulge
every reasonable inference to support the finding, crediting favorable evidence
if a reasonable jury could and disregarding contrary evidence unless a
reasonable jury could not. City of Keller v. Wilson, 168 S.W.3d 802, 807,
822 (Tex. 2005). If there is no evidence to support the adverse finding, we then
examine the entire record to determine if the contrary proposition is
established as a matter of law. Dow Chem., 46 S.W.3d at 241 (citing
Sterner, 767 S.W.2d at 690). We sustain the point of error only if the
contrary proposition is conclusively established. Dow. Chem., 46 S.W.3d
at 241 (citing Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex.
A party challenging on
appeal the factual sufficiency of an adverse finding on which that party had the burden of proof at trial must demonstrate that
the adverse finding is against the great weight and preponderance of the
evidence. Dow Chem., 46 S.W.3d at 242. The reviewing court must consider
and weigh all the evidence and may set aside the finding only if the evidence is
so weak or the finding is so against the great weight and preponderance of the
evidence that it is clearly wrong and unjust. Dow Chem., 46 S.W.3d at
Breach of Contract
In his fourth issue,
Elkins asserts the trial judge erred in failing to hold Capital One breached its contract with Elkins by reopening the credit
card account for the recurring charges from Proactiv.
findings of fact and conclusions of law, the trial judge found Elkins failed
to prove by a preponderance of the evidence each
element of any cause of action asserted, which includes Elkins's alleged breach
of contract by Capital One.
The evidence shows Elkins
signed the customer agreement with Capital One agreeing he would make monthly payments on any outstanding account
balance and that Capital One could report any delinquencies in Elkins's account
to other financial service providers, including credit bureaus. In the credit
card application, Elkins further agreed that, in the event he had set up
recurring charges to be made on the account and subsequently requested the
account be closed, Capital One was authorized to re-open the account when the
recurring charge was posted to the account and to charge both a service fee and
any past due fees for late payments. The customer agreement states if a customer
closes an account without cancelling preauthorized billing arrangements with a
third-party, Capital One will consider the receipt of such a charge to the
credit account as an authorization to reopen the account. The agreement provides
an example of such a situation:
For example, if you authorized a
purchase from a merchant and we receive the transaction from the merchant after your account has been closed, your account will
be reopened, the amount of the charge will be added to your account, and you
will be responsible for payment. If there is a membership fee for your account,
the fee will continue to be charged, to the extent permitted by law, until the
account has been paid in full as defined above.
In late 2003 or early
2004, Elkins ordered a skin care product from GRC*Proactiv Solution. Every two months Proactiv charged Elkins $45.90 on
the Capital One credit card for additional product. Elkins received the product
and did not cancel the account with Proactiv. In September 2004, Elkins notified
Capital One he wanted to close his credit card account and pay the outstanding
balance. However, Elkins did not cancel the recurring order from Proactiv, which
again charged Elkins for the facial product in October 2004. Elkins did not
cancel the account with Proactiv at that time. The evidence shows that in
accordance with the customer credit card agreement and
notice printed on the billing statements, See Footnote 1
Capital One re-opened Elkins's account and held Elkins responsible for the
Proactiv product purchased. Elkins did not make further payment to Capital One,
and Capital One charged the late fee and the annual membership fee, which came
due during this period of time.
Proactiv again charged
Elkins's credit card account in December 2004. Elkins did not pay Capital One for that charge. Elkins complained to Capital One
regarding the reopening of his account and the fees charged. Capital One
reminded Elkins in writing to close all accounts with automatic charges. When
Elkins contacted Proactiv regarding the recurring charges, the recurring charges
by Proactiv ceased.
In the trial court's
findings of fact and conclusions of law, the trial judge found Elkins failed to prove by a preponderance of the evidence
each element of any cause of action asserted. Further, the trial judge found
Elkins failed to prove (i) Capital One's investigation of the billing dispute
was less than what was required by the credit card agreement, (ii) Capital One's
investigation was unreasonable, and (iii) Elkins suffered damages as a result of
Capital One's noncompliance with all contractual time requirements for
addressing billing disputes.
Having reviewed all the
evidence, we conclude Elkins did not prove the elements of his breach of contract claim as a matter of law and that the
trial judge's conclusion Capital One did not breach the agreement is not so
against the great weight and preponderance of the evidence to be manifestly
unjust. We overrule Elkins's fourth issue.
In his third issue,
Elkins asserts the trial judge erred in failing to grant a declaratory judgment that Capital One had violated the credit
card agreement. There is no basis for declaratory relief when in the same action
a party seeks a different, enforceable remedy, and a judicial declaration would
add nothing to what would be implicit or express in a final judgment for the
enforceable remedy. Universal Printing Co. v. Premier Vacation Homes,
Inc., 73 S.W.3d 283, 296 (Tex. App.-Houston [1st Dist.] 2001, pet.
Here the trial judge
specifically found and we have concluded Elkins failed to prove by a preponderance of the evidence each element of his
breach of contract claim against Capital One. Therefore no declaratory action
would have been appropriate with respect to an alleged violation of the credit
card agreement. We overrule Elkins's third issue.
In his fifth issue,
Elkins asserts the trial judge erred in denying his defamation claim against Capital One because he offered circumstantial
evidence establishing the defamatory statements. In a defamation action, the
plaintiff must prove the defendant published a defamatory statement concerning
the plaintiff while acting with negligence regarding the truth of the statement.
WFAA- TV, Inc. v. McLemore, 978 S.W.2d 568, 571 (Tex.
Elkins did not any
introduce direct evidence of any allegedly false statement or statements Capital One made to credit agencies. In support of
his defamation claim, Elkins testified generally that Capital One reported
false, negative information about him to credit bureaus and damaged his credit.
Without knowing the allegedly false statement or statements Capital One provided
the credit agencies, we cannot conclude Elkins established his defamation claim
as a matter of law or that the trial judge's finding Elkins did not is against
the great weight and preponderance of the evidence. We overrule Elkins's fifth
Exclusion and Admission of
In his second issue,
Elkins asserts the trial judge erred in admitting hearsay evidence in the form of an unsworn letter from Capital One to
We review a trial court's
discovery rulings and evidentiary rulings admitting or excluding evidence as committed to the trial court's sound discretion.
Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998);
Texas Dep't of Tansp. v. Able, 35 S.W.3d 608, 617 (Tex. 2000); Avary
v. Bank of Am., N.A., 72 S.W.3d 779, 787 (Tex. App.-Dallas 2002, pet.
denied). The test for abuse of discretion is whether the trial court acted
without reference to any guiding rules or principles. See Downer v.
Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). Absent an
abuse of discretion, we do not reverse the trial judge's evidentiary rulings.
E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 558 (Tex.
1995). Error in admitting or excluding evidence will not be cause for reversal
unless an appellant shows both that the ruling was error and that it probably
caused the rendition of an improper judgment. See Tex. R. App. P.
44.1(a)(1); Owens-Corning Fiberglas Corp., 972 S.W.2d at 43; City of
Brownsville v. Alvarado, 897 S.W.2d 750, 753 (Tex. 1995). We will uphold the
trial judge's ruling if there is any legitimate basis for the ruling. See
Owens-Corning Fiberglas Corp., 972 S.W.2d at 43.
Unless an exception
applies, hearsay is not admissible. Tex. R. Evid. 802. Nevertheless, error in the admission of hearsay is not reversible unless
the error probably caused the rendition of an improper judgment. Tex. R. App. P.
In the trial judge's
findings of fact and conclusions of law, there is a finding Elkins did not prove Capital One's investigation of the
billing dispute was unreasonable from the viewpoint of an ordinary prudent
credit card provider. The trial judge indicated he considered, among other
evidence, the letter from Capital One to Elkins. However, the trial judge stated
he did not consider the hearsay portion of the letter in finding Capital One's
investigation was reasonable. The letter is not hearsay in its entirety.
Further, Capital One did not offer the letter for the truth of the matter
asserted therein, namely that Capital One contacted Proactiv regarding charges
Proactiv was making to Elkins's account. Rather, the letter was offered by
Capital One to demonstrate Capital One responded in writing to Elkins's
inquiries concerning his account. We conclude the trial judge did not abuse his
discretion when he admitted the letter. Furthermore, even assuming the trial
judge erred in admitting the letter, our review of the record reveals the
admission of the evidence did not cause an improper judgment and was not
reversible error. We overrule Elkins's second issue.
Federal Statutory Claims
In his first issue,
Elkins argues the trial judge erred in failing to award him statutory damages and attorney's fees under his federal
Texas Rule of Civil
Procedure 193.6 governs the admission of evidence not timely disclosed in discovery and provides that a party may not introduce
in evidence material or information that was not timely disclosed unless the
court finds (i) there was good cause for the failure to timely disclose or (ii)
the failure to timely disclose will not unfairly surprise or unfairly prejudice
the other party. Tex. R. Civ. P. 193.6(a). The burden to show good cause or lack
of unfair prejudice is on the party seeking to admit the evidence. Tex. R. Civ.
P. 193.6(b); see also Williams v. County of Dallas, 194 S.W.3d 29, 32
(Tex. App.-Dallas 2006, pet. denied). Rule 193.6(a), entitled “Failing to Timely
Respond-Effect on Trial,” is mandatory, and the penalty-exclusion of evidence-is
automatic, absent a showing of (i) good cause, (ii) lack of unfair surprise or
(iii) unfair prejudice. Lopez v. La Madeleine of Tex., Inc., 200 S.W.3d
854, 860 (Tex. App.-Dallas 2006, no pet.). The sanction of automatic exclusion
of undisclosed evidence, subject to the exceptions set forth in the rule, is
well established. Lopez, 200 S.W.3d at 860. The party offering the
undisclosed evidence has the burden to establish good cause or lack of surprise,
which must be supported by the record. Tex. R. Civ. P. 193.6(b).
he was entitled to statutory damages because in his findings of fact, the trial judge found Capital One did not comply with
all federal statutory time requirements. However, the trial judge further
specifically found Elkins did not prove he suffered damages as a result of that
conduct. Further, the trial judge found Elkins had failed to respond to Capital
One's request for disclosure with regard to damage calculations relating to his
federal claims. See Tex. R. Civ. P. 194.2(d).
The record confirms that,
despite written discovery sent to Elkins by Capital One requesting information and disclosure of the amount and any method of
calculating economic damages, Elkins did not identify the federal statutory
provisions allegedly violated by Capital One until the end of the trial.
Further, Elkins did not identify his damages as requested or offer any evidence
of damages at trial. The trial judge found the federal statutory violation
relied upon by Elkins permitted damage calculation, contrary to his statement in
response to discovery that his damages were “unliquidated [and] are not subject
to precise calculation.” The trial judge found Capital One's objections to
Elkins's discovery responses were meritorious and timely. Because the court
found Elkins did not timely disclose the basis and calculation of his damages,
the court declined to award statutory damages and attorney's fees. The record
does not show Elkins established good cause for failing to timely disclose the
amount or basis for calculation of his damages or that his failure to timely
disclose would not unfairly surprise or prejudice Capital One. On this record,
we cannot conclude the trial judge erred in refusing to award statutory damages
and attorney's fees to Elkins. We overrule Elkins's first issue.
In light of
our disposition of the issues raised by Elkins, we need not address Capital One's cross-appeal issue. See Tex. R. App. P.
We affirm the trial
The provision states in part:
If You Close Your Account. . . . You must. . . cancel all preauthorized
billing, and cease using your account. If you do
not cancel preauthorized billing arrangements, we will consider receipt of a
charge your authorization to reopen your account. Additionally, your account
will not be closed until you pay all amounts you owe us including: any
transactions you have authorized, finance charges, past due fees. . . . You are
responsible for these amounts whether they appear on your account at the time
you request to close the account or they are incurred subsequent to your request
to close the account. This may result in charges appearing on your account after
you have requested the account to be closed or the reopening of your account if
it has already been closed.
The Capital One bill listing the October Proactiv charge, in
addition to including the telephone contact
number for Proactiv, states:
Your request to close
your account has been received. Your account will be closed when it reaches a $0 balance. Until then, you will continue to
receive statements and must continue to make payments. All terms and conditions
of the account will apply while a balance remains. Please remember to cut your
cards and cancel all charges which automatically bill to your