11th Court of Appeals

                                                                  Eastland, Texas

                                                             Memorandum Opinion

Gary W. Watson

Appellant

Vs.                   No. 11-02-00274-CV B Appeal from Erath County

Gore Bros., Inc. and Gore=s Inc.

Appellees

Gary W. Watson (Watson) appeals from a summary judgment granted in favor of Gore Bros., Inc. (Gore Bros.) and Gore=s Inc.  The trial court ordered that Watson take nothing on his claims against Gore Bros. and Gore=s Inc. and further ordered that Watson pay Gore Bros. $45,546.38, the amount due on a secured note that Watson owed Gore Bros.  We affirm.

The summary judgment evidence shows that Watson was a dairy farmer who resides in Erath County.  Gore Bros. was a feed store in Comanche, and Gore=s Inc. was a retail store in Comanche.  For many years, Watson bought feed for his livestock from Gore Bros. on an open account basis.  Watson also had a charge account at Gore Bros. Agri Service, a division of Gore=s Inc.  In May 2000, Watson=s account balance with Gore Bros. exceeded $38,000.00.  Gore Bros. closed Watson=s open account and told him that he must pay cash on delivery of any feed that he ordered.  Watson told Gore Bros. that he would pay with a check when the feed was delivered.  However, Watson also stated that there would not be sufficient funds to clear the checks until he received payment for milk sales.  The parties operated under that arrangement for a time.  Larry Alan Stephenson, Credit Manager of Gore Bros., testified in his deposition that it was his practice to check with the bank to see if Watson=s checks would clear before depositing them into Gore Bros.=s account.  Nine checks written by Watson between September 25, 2000, and November 13, 2000, totaling $17,123.39 were returned by Watson=s bank for insufficient funds.  Also, in November 2000, Gore Bros. prepared a promissory note designed to resolve Watson=s delinquent open account.  The note was for $45,546.38 with 15 percent  interest per year.  The note was secured by Watson=s livestock.  Watson was to pay the note in 12 monthly installments of $4,164.04.  After Watson=s attorney reviewed the note, Watson signed it on December 1, 2000.  Watson never paid any of the note.  In April 2001, Watson was indicted for 9 counts of appropriating feed belonging to Gore Bros. 

Watson sued Gore Bros.  He sought a declaratory judgment that would set forth the correct amount of credit given to him on his account with Gore Bros.  Watson also alleged that Gore Bros. used duress in obtaining Watson=s signature on the note, that Gore Bros. charged an usurious interest on Watson=s open account, and that Gore Bros. engaged in malicious prosecution and abuse of process in seeking an indictment for the nine returned checks.  Additionally, Watson alleged that Gore Bros. intentionally inflicted emotional distress upon Watson by seeking to destroy Watson financially, physically, and mentally and thereby obtaining Watson=s livestock at a cheap foreclosure price.  Watson also claimed that Gore Bros. violated debt collection practices, as set forth in TEX. FIN. CODE ANN. ch. 392 (Vernon 1998 & Supp. 2003).  Watson sought exemplary damages for all the above causes of action, and he also sought attorney=s fees.  Gore Bros. counterclaimed for breach of contract and alleged that Watson had not paid any amount on the note.  Gore Bros. sought damages in the amount of the note, $45,546.38.

Gore Bros. filed a motion for summary judgment, both as defendant and as counter-plaintiff.  The trial court granted partial summary judgment for Gore Bros. on Watson=s claims of malicious prosecution and abuse of process, intentional infliction of emotional distress, and conditional delivery of post-dated checks.

 Prior to the time that the trial court granted partial summary judgment, Watson amended his petition to include Gore=s Inc. in the lawsuit.   In his amended petition, Watson sought a declaratory judgment that he had not received credit for payments he had made.  Watson further alleged that he suffered mental anguish as a result of the duress placed upon him in order to get him to sign the note.  He also claimed that both Gore=s Inc. and Gore Bros. charged him usurious interest.  The amended petition also includes causes of action for malicious prosecution and abuse of process, intentional infliction of emotional distress, and violation of Chapter 392.  Watson sought exemplary damages and attorney=s fees in his amended petition as well.

 Gore=s Inc. filed a traditional motion for summary judgment and a no-evidence motion for summary judgment.  Gore Bros. filed an amended traditional motion for summary judgment as defendant and counter-plaintiff.  The trial court granted all three motions and entered a summary judgment that Watson take nothing in connection with any of  his causes of action. The trial court awarded Gore Bros. $45,543.38, representing the principal amount of the secured note and postjudgment interest at 10 percent and attorney=s fees in the amount of  $2,730.00. 

Watson brings two issues on appeal.  First, he alleges that the trial court erred in granting Gore Bros.=s and Gore=s Inc.=s motions for summary judgment because there were numerous material issues of fact.  Secondly, he alleges that the trial court erred in entering final judgment without entering an order disposing of  $17,123.39 alleged to be held in the registry of the court.

A trial court must grant a traditional motion for summary judgment if the moving party establishes that no genuine issue of material fact exists and that he is entitled to judgment as a matter of law. TEX.R.CIV.P. 166a(c); Lear Siegler, Inc. v. Perez, 819 S.W.2d 470, 471 (Tex. 1991). Once the movant establishes a right to a summary judgment, the non-movant must come forward with evidence or law that precludes summary judgment.  City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678-79 (Tex. 1979). When reviewing a summary judgment, the appellate court takes as true evidence favorable to the non-movant.  Every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its favor.  American Tobacco Company, Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997); Nixon v. Mr. Property Management Company, Inc., 690 S.W.2d 546, 548-49 (Tex. 1985).

The trial court must grant a no-evidence motion for summary judgment unless the non-movant produces evidence that raises a genuine issue of material fact on all challenged elements of his claim or defense.  TEX.R.CIV.P. 166a(i). The appellate court reviews evidence presented in response to a motion for a no-evidence summary judgment in the same way it reviews evidence presented in support of, or in response to, a motion for traditional summary judgment:  it accepts as true evidence favorable to the non-movant and indulges every reasonable inference and resolves all doubts in favor of the non-movant.  Hight v. Dublin Veterinary Clinic, 22 S.W.3d 614, 619 (Tex.App. - Eastland 2000, pet=n den=d); see American Tobacco Company, Inc. v. Grinnell, supra at 425;  Nixon v. Mr. Property Management Company, Inc., supra at 548-49.  However, the appellate court reviews only evidence presented by the non-movant.  Rule 166a(i);  Hight v. Dublin Veterinary Clinic, supra at 618-19.  If the non-movant presents more than a scintilla of evidence on the disputed element, a no-evidence summary judgment is improper.  Hight v. Dublin Veterinary Clinic, supra;  Denton v. Big Spring Hospital Corporation, 998 S.W.2d 294, 298 (Tex.App. - Eastland 1999, no pet=n);  cf.  Merrell Dow Pharmaceuticals, Inc. v. Havner, 953 S.W.2d 706 (Tex. 1997), cert. den=d, 523 U.S. 1119 (1998).

Here, Gore=s Inc.=s summary judgment evidence included affidavits by Stephenson, the Credit Manager of Gore Bros.; Richard B. Hill, the Chief Financial Officer of Gore Bros.; John Terrill, District Attorney of Erath County; James H. Dudley, attorney for Gore Bros.; and portions of Watson=s deposition.  Gore Bros.=s motion also contained a copy of the secured note signed by Watson, a Gore Bros.=s credit application signed by Watson, and a financing statement. 

The summary judgment evidence shows that Gore=s Inc. is not a proper party to this suit.  Watson alleges duress and mental anguish by Gore=s Inc. in obtaining his signature on the note.  However, he never provided any summary judgment evidence that Gore=s Inc. threatened him or harassed him.  Gore=s Inc. was not a secured party on the note, and Gore=s Inc. was not a payee on the note.  Stephenson and Hill both offered summary judgment evidence that the principal of the note was a compilation of the retail and feed store account at Gore Bros. only.  Gore=s Inc. was not the recipient of the returned checks.  The checks that were returned for insufficient funds were made to Gore Bros.  Gore=s Inc. did not pursue prosecution of Watson for the returned checks because Watson did not appropriate any property belonging to Gore=s Inc.    Watson attempts to rebut Gore=s Inc.=s summary judgment evidence with his affidavit. Summary judgment may be granted on affidavits from interested parties; but, such evidence must be clear, positive, direct, credible, free from contradictions, and susceptible of being readily controverted.  TEX.R.CIV.P. 166a.  Conclusory statements in affidavits are not competent evidence to support a summary judgment.   Hidalgo v. Surety Savings and Loan Association, 487 S.W.2d 702, 703 (Tex. 1972). Watson=s affidavit is unclear because he refers to AGore@ throughout most of the affidavit.  There is not a distinction between the two defendants.  Watson=s affidavit also contained conclusory statements.  Further, Watson offered copies of checks and bills to rebut Gore=s Inc.=s motion for summary judgement.  The checks and bills provided indicate that the party involved in this dispute is AGore Brother=s Inc.@ not Gore=s Inc.  Appellant contends that Stephenson and Hill do not state how they obtained personal knowledge of the facts stated in their affidavits.  However, Stephenson is the credit manager of Gore Bros., and he testified in his deposition that he compiled the amount due on the note and that it included only the accounts of Gore Bros.  Both Stephenson and Hill, the chief financial officer, have personal knowledge of the accounts of Gore Bros. based on their positions with the company.  Gore=s Inc. has established that there was no genuine issues of material fact and that it is entitled to summary judgment as a matter of law.  Further, Watson provided no evidence of Gore=s Inc.=s liability to him.  The trial did not error in granting summary judgment in favor of Gore=s Inc.   Watson=s first issue on appeal, insofar as it pertains to Gore=s Inc., is overruled. 

Gore Bros.=s summary judgment evidence as counter-plaintiff included:  an affidavit by Stephenson, the Credit Manager of Gore Bros.; an affidavit by Hill, the Chief Financial Officer of Gore Bros.; an affidavit of Dudley, attorney for Gore Bros.; an affidavit of Randall G. Walters regarding reasonable attorney=s fees; and portions of Watson=s deposition.  Gore Bros.=s affidavits contained attachments consisting of a copy of the secured note signed by Watson, a credit application signed by Watson, and the financing statement.  

The summary judgment evidence clearly shows that Watson signed the secured note and that Gore Bros. was the secured party, as well as the holder of the note.  The evidence is clear as to the payments owed; Watson admitted that he signed the note and had made no payments on it.  See Hudspeth v. Investor Collection Services Limited Partnership, 985 S.W.2d 477 (Tex.App.  B San Antonio 1998, no pet=n).  Watson alleges that he did not get credit for $12,530.28 that he paid with cashier=s checks; however, those checks were written before he signed the note.  If there was a dispute as to the amount he owed on the account, that dispute was resolved effectively when Watson signed the note.  Watson also testified that he signed the note on December 1, 2000, after he discussed the note with his attorney.  Under the summary judgment standards of review, we hold that the trial court did not err in granting counter-plaintiff Gore Bros.=s motion for summary judgment for the amount due on the note.  Watson=s first issue on appeal is overruled insofar as it pertains to the award to Gore Bros. as counter-plaintiff.  

Gore Bros.=s summary judgment evidence as defendant included: an affidavit by  Stephenson, the Credit Manager of Gore Bros.; an affidavit by Hill, the Chief Financial Officer of Gore Bros.; an affidavit by Dudley, attorney for Gore Bros.; an affidavit by Walters regarding reasonable attorney=s fees; and portions of Watson=s deposition.  Gore Bros.=s motion for summary judgment contained a copy of the secured note signed by Watson, the credit application signed by Watson, and the financing statement.

We will now address Watson=s claim that Gore Bros. coerced him into signing the note.  Duress is the threat to do some act that the threatening party has no right to do.  This threat must take away a person=s free agency, overcome that person=s will, and cause that person to do something that the person would not do or was not legally bound to do.   The threat must be imminent.  Chapman Children=s Trust v. Porter & Hedges, L.L.P., 32 S.W.3d 429 (Tex.App. B Houston [14th Dist.] 2000, pet=n den=d).  Economic duress occurs when the allegedly threatening party is the cause of the plaintiff=s financial stress.  Deer Creek, Limited v. North American Mortgage Company, 792 S.W.2d 198 (Tex.App. B Dallas 1990, no writ).                 

It is clear that Gore Bros. had a legal right to obtain payment for the feed sold to Watson, and Watson testified that he felt pressure to sign the note only because he needed to feed his cows and that he did not like owing people money.  Gore Bros. was not the cause of Watson=s financial stress. There is no fact issue as to Watson=s duress claim. See Roberts v. U.S. Home Corporation, 694 S.W.2d 129, 136 (Tex.App. B San Antonio 1985, no writ).

To prevail on a claim of intentional infliction of emotional distress, a plaintiff must show that  the defendant acted intentionally or recklessly, that the conduct was extreme and outrageous, and that this conduct caused the plaintiff severe emotional distress.  Twyman v. Twyman, 855 S.W.2d 619, 621‑22 (Tex. 1993).  There is no evidence of intentionally or recklessly extreme and outrageous behavior by Gore Bros.  Whether conduct is outrageous is a matter of law.  Motsenbocker v. Potts, 863 S.W.2d 126 (Tex.App. B Dallas 1993, no writ).  Liability for outrageous conduct exists when:

[C]onduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. 

Twyman v. Twyman, supra at 621.  Further, there is no showing of severe emotional distress.  See GTE Southwest, Incorporated v. Bruce, 998 S.W.2d 605 (Tex. 1999).  Watson=s claim of intentional infliction of emotional distress fails as a matter of law, and the trial court did not err when it granted summary judgment on this issue. 

Watson=s claim against Gore Bros. for usury also fails as a matter of law.  A person who contracts for, charges, or receives interest that is greater than the amount authorized by law is liable to the obligor for penalties set forth in the usury statutes.  TEX. FIN. CODE ANN. ' 305.001 (Vernon Supp. 2003).

Here, the credit application signed by Watson indicated that the interest rate to be charged was the highest legal rate.  Also, the secured note set the interest rate at 15 percent.  Both of these documents clearly show that there was an agreement as to the interest rate and that it was not usurious.    Watson offers no controverting summary judgment evidence to rebut these documents.  The trial court did not err when it granted summary judgment on the usury issue. 

Furthermore, there is no evidence to support Watson=s claims under Chapter 392.  Watson alleged that Gore Bros. used threats and coercion in collecting the debt.  Watson offered his affidavit as evidence of the threats.  He stated that Gore Bros. made numerous phone calls, threatened to file charges against him for the hot checks that he had written, reported him to the credit bureau, and sued him.  However, none of the statements made in his affidavit fall under the provisions of Section 392.301.  Section 392.301 provides:

(a) In debt collection, a debt collector may not use threats, coercion, or attempts to coerce that employ any of the following practices:

(1) using or threatening to use violence or other criminal means to cause harm to a person or property of a person;

(2) accusing falsely or threatening to accuse falsely a person of fraud or any other crime;

(3) representing or threatening to represent to any person other than the consumer that a consumer is wilfully refusing to pay a non-disputed consumer debt when the debt is in dispute and the consumer has notified in writing the debt collector of the dispute;

(4) threatening to sell or assign to another the obligation of the consumer and falsely representing that the result of the sale or assignment would be that the consumer would lose a defense to the consumer debt or would be subject to illegal collection attempts;

(5) threatening that the debtor will be arrested for nonpayment of a consumer debt without proper court proceedings;

(6) threatening to file a charge, complaint, or criminal action against a debtor when the debtor has not violated a criminal law;

(7) threatening that nonpayment of a consumer debt will result in the seizure, repossession, or sale of the person=s property without proper court proceedings; or

(8) threatening to take an action prohibited by law.

(b) Subsection (a) does not prevent a debt collector from:

(1) informing a debtor that the debtor may be arrested after proper court proceedings if the debtor has violated a criminal law of this state;

(2) threatening to institute civil lawsuits or other judicial proceedings to collect a consumer debt;  or

(3) exercising or threatening to exercise a statutory or contractual right of seizure, repossession, or sale that does not require court proceedings.

The summary judgment evidence shows, as a matter of law, that Gore Bros. did not engage in activities that violated Chapter 392.  The trial court was correct in its ruling on this issue.

Watson=s malicious prosecution and abuse of process claims also fail as a matter of law.  The elements of malicious prosecution are: (1) commencement of a criminal prosecution against the plaintiff; (2) termination of the proceeding in favor of the plaintiff; (3) absence of probable cause for the proceeding; (4) malice on the part of the defendant; and (5) damage to the plaintiff.  Richey v. Brookshire Grocery Co., 952 S.W.2d 515 (Tex. 1997).  The record before us does not show that the criminal case against Watson has terminated or that there has been a final adjudication.  A malicious prosecution cause of action will not accrue until after the prosecution has ended and plaintiff has been proven innocent. Richey v. Brookshire Grocery, Co., supra.  Further, Watson testified that he had written checks to Gore Bros. when he knew there was no money in the bank to pay them.  It is clear that there was probable cause to commence a criminal charge against Watson.  Additionally, there is no summary judgment evidence that Gore Bros. acted with malice.  The trial court did not err when it granted summary judgment on this issue.

Gore Bros. has established that there are no material issues of fact as to any of Watson=s claims against it and that it is entitled to summary judgment as a matter of law.  We overrule Watson=s first issue on appeal.  

In his second issue on appeal, Watson alleges that the trial court erred in entering a final judgment without an order regarding the funds held in the registry of the court.  Watson stated that he had deposited $17,123.39 into the registry of the court.  There is no summary judgment evidence to show that this deposit was made in connection with the civil case now before us on appeal. Therefore, there are no material issues of fact in the issue relating to such deposit. We overrule Watson=s second issue on appeal.

We affirm the judgment of the trial court.

JIM R. WRIGHT                    

JUSTICE

September 4, 2003

Not designated for publication.  See TEX.R.APP.P. 47.2(a).

Panel consists of:  Arnot, C.J., and

Wright, J., and McCall, J.