law-sworn-account | rule 185 | Tex. R. Civ. P. 185

  
WHAT IS THE NATURE OF A SWORN ACCOUNT UNDER TEXAS LAW?

A claim based on a sworn account is brought pursuant to Texas Rule of Civil Procedure 185. Tex. R. Civ. P.
185. Rule 185 is a procedural tool that limits the evidence necessary to establish a prima facie right to
recovery on certain types of accounts. Id. Rule 185 applies only "to transactions between persons, in which
there is a sale upon one side and a purchase upon the other, whereby title to personal property passes from
one to the other, and the relation of debtor and creditor is thereby created by general course of dealing . . .
." Bird v. First Deposit Nat'l Bank, 994 S.W.2d 280, 282 (Tex. App.-El Paso 1999, pet. denied); see also Hou-
Tex Printers, Inc. v. Marbach, 862 S.W.2d 188, 190 (Tex. App.-Houston [14th Dist.] 1993, no writ).

Suit on a sworn account

A suit on a sworn account is "a procedural tool that limits the evidence necessary to establish a prima facie
right to recover 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. To establish a claim
under Rule 185 of the Rules of Civil Procedure, a plaintiff must allege that: it sold and performed services for
the defendant; the claim is due; the charges were just and true; all lawful offsets, payments, and credits were
applied; and the damages are liquidated. The plaintiff must also include in its petition a systematic record of
the services provided, which shows with a reasonable degree of certainty the name, date, and charge for
each item and provides details on how the total amount was determined. Meaders v. Biskamp, 316 S.W.2d
75, 78 (Tex. 1958); Hou—Tex Printers, Inc. v. Marbach, 862 S.W.2d 188, 190 (Tex. App.-Houston [14th Dist.]
1993, no writ).

SWORN ACCOUNT SUITS (Rule 185)

Under Rule 185, a suit on a sworn account must contain a systematic record of the goods sold or services
rendered and be supported by an affidavit stating that the "claim is, within the knowledge of affiant, just and
true, that it is due, and that all just and lawful offsets, payments and credits have been allowed." Tex. R. Civ.
P. 185. A petition that complies with the Rule establishes a prima facie case entitling the plaintiff to summary
judgment. See Whiteside v. Ford Motor Credit Co., 220 S.W.3d 191, 194 (Tex. App.-Dallas 2007, no pet.);
Powers v. Adams, 2 S.W.3d 496, 498 (Tex. App.-Houston [14th Dist.] 1999, no pet.). If the sworn petition
contains any deficiency, however, the account will not constitute prima facie evidence of the debt. Panditi v.
Apostle, 180 S.W.3d 924, 927 (Tex. App.-Dallas 2006, no pet.).

A party resisting a claim on a sworn account must submit a sworn denial supported by affidavit. Tex. R. Civ.
P. 93(10). The filing of a sworn denial destroys the evidentiary effect of the itemized account, requiring the
plaintiff to produce proof of the claim. Rizk v. Fin. Guardian Ins. Agency, Inc., 584 S.W.2d 860, 862 (Tex.
1979); Thorp v. Adair & Myers, 809 S.W.2d 306, 307 (Tex. App.-Houston [14th Dist.] 1991, no writ).

In its original and amended petitions, JKC purported

CREDIT CARD DEBT SUIT
CANNOT BE BROUGHT AS SWORN ACCOUNT SUIT UNDER RULE 185

Gellatly  v. Unifund CCR Partners v. Gellatly (Tex.App.- Houston [1st Dist.] July 3, 2008)(Nuchia) (credit
card suit by assignee of card issuer against consumer,
deemed admissions, sufficiency of summary judgment
proof, breach of contract and
quantum meruit exclusive of each other)
Unifund is not entitled to recover as on a sworn account.  Under the Rules of Civil Procedure, the evidence needed to
establish a prima facie right to recovery on certain accounts, including sworn accounts, is limited. TEX.R.CIV.P.185. We
recently held that Rule 185 does not apply to a suit to recover credit card debt. Williams v. Unifund CCR Partners Assignee of
Citibank, No. 01-06-00927-CV, 2008 WL 339855, *3 (Tex. App.—Houston [1st Dist.] February 7, 2008, no pet.).
AFFIRM TC JUDGMENT: Opinion by Justice Nuchia  [
pdf version here]
Before Justices Nuchia, Alcala and Hanks
01-07-00552-CV Unifund CCR Partners v. Sara Morgan Gellatly
Appeal from County Civil Court at Law No 4 of Harris County
Trial Court Judge:
Hon. Roberta A. Lloyd  

A credit card debt is not a sworn account
Tully v. Citibank (South Dakota), N.A., 173 S.W.3d 212, 216, No. 06-05-00027-CV (Tex.App.- Texarkana
2005, no pet.)
First, Citibank cannot collect a credit card debt through a suit on a
sworn account. A suit on a sworn
account is permitted only if the claim is "founded upon an open account or other claim for goods,
wares and merchandise, including any claim for a liquidated money demand based upon written
contract or founded on business dealings between the parties, or is for personal service rendered,
or labor done or labor or materials furnished . . . ." Tex. R. Civ. P. 185. "A sworn account applies
only to transactions between persons, in which there is a sale upon one side and a purchase upon
the other, whereby title to personal property passes from one to the other, and the relation of debtor
and creditor is thereby created by general course of dealing--it does not mean transactions between
parties resting upon special contract." Bird v. First Deposit Nat'l Bank, 994 S.W.2d 280, 282 (Tex.
App.—El Paso 1999, pet. denied). Because no title to personal property passes from the bank to
the cardholder, a credit card debt is not a sworn account as contemplated by Texas Rule of Civil
Procedure 185.
Id. Citibank was not entitled to summary judgment based on its suit on a sworn
account theory.
Tully v. Citibank (South Dakota), N.A., 173 S.W.3d 212, 216, No. 06-05-00027-CV (Tex.App.- Texarkana
2005, no pet.)(a credit card debt is not a sworn account)

Houston: Sworn Account not appropriate for collection of credit card debt
In his fifth issue, Williams argues that the trial court erred in granting summary judgment on Unifund's claim
for a sworn account pursuant to Texas Rule of Civil Procedure 185. (1) Rule 185 is a procedural tool that
limits the evidence necessary to establish a prima facie right to recovery on certain types of accounts. (2)
Tex. R. Civ. P. 185. Rule 185 applies only "to transactions between persons, in which there is a sale upon
one side and a purchase upon the other, whereby title to personal property passes from one to the other,
and the relation of debtor and creditor is thereby created by general course of dealing. . . ." Meaders v.
Biskamp, 316 S.W.2d 75, 78 (Tex. 1958) (emphasis in original); Bird v. First Deposit Nat'l Bank, 994 S.W.2d
280, 282 (Tex. App.--El Paso 1999, pet. denied); Hou-Tex Printers, Inc. v. Marbach, 862 S.W.2d 188, 190
(Tex. App.--Houston [14th Dist.] 1993, no writ). It does not apply to transactions between parties resting upon
a special contract. Meaders, 316 S.W.2d at 78; Bird, 994 S.W.2d at 282. A credit card issued by a financial
institution is a special contract that does not create the sort of debtor-creditor relationship to bring a claim
within the scope of Rule 185. See Bird, 994 S.W.2d at 282; see also Sherman Acquisition II LP v. Garcia, 229
S.W.3d 802, 807 (Tex. App.--Waco 2007, no pet.); Tully v. Citibank (South Dakota), N.A., 173 S.W.3d 212,
216 (Tex. App.--Texarkana 2005, no pet.).

Williams v. Unifund CCR Partners Assignee of Citibank, — SW3d —, 2008 WL 339855, at *4 (Tex.App.
—Houston [1st Dist.] Feb. 7, 2008, no pet. h.)(Keyes) (Plaintiff failed to produce the Card Agreement or any
document that established the agreed terms, including the applicable interest rate or the method for
determining the applicability and amount of finance charges.)
We reach this conclusion because no title to personal property passes from the bank to the cardholder;
rather, the card evidences a line of credit extended by the bank which the cardholder may use to purchase
goods and services from a third party. And where the transaction in question is a cash advance, there is no
good or service involved at all, but a pure loan of money.

An unpaid bank credit card account, therefore, creates a cause of action for the bank's money or credit
advanced as a loan, but not for goods or services sold or delivered to the cardholder. Bird, 994 S.W.2d at
282. Therefore, Rule 185 is not available in a suit to recover credit card debt. The trial court erred to the
extent it granted summary judgment on Unifund's claim on a sworn account.

We sustain Williams's fifth issue and hold that Unifund is not entitled to summary judgment on a sworn
account under Rule 185. Although Unifund cannot prevail under Rule 185, it is important to remember that
Rule 185 is merely a procedural tool that is unavailable here under established law. Williams also argues that
Unifund was not entitled to summary judgment on its breach of contract theory. (3)