Opinion
No. 02-19-00415-CV
03-18-2021
ERIC SAUM, Appellant v. AMERICAN EXPRESS NATIONAL BANK, Appellee
On Appeal from the 352nd District Court Tarrant County, Texas
Trial Court No. 352-299569-18 Before Birdwell, Womack, and Wallach, JJ.
MEMORANDUM OPINION
Eric Saum appeals a judgment in favor of American Express National Bank ("AmEx National") for $36,759.11, the balance due on Saum's American Express credit card. Saum challenges the legal and factual sufficiency of the evidence, as well as the trial court's rulings permitting withdrawal of deemed admissions, admitting evidence relating to AmEx National's business records, and denying his request for a continuance. We affirm.
Background
A. Pretrial
Saum opened an American Express credit card account in 2010. The cardmember agreement reflects that American Express Centurion Bank was the issuing entity. In May 2018, AmEx National filed a petition alleging breach of contract and suit on a stated account against Saum. AmEx National explained in a footnote that, "[o]n April 1, 2018 American Express Centurion Bank changed its name to American Express National Bank." Saum answered with only a general denial.
In September 2018, Saum served a request for admissions, but AmEx National did not timely respond. AmEx National discovered its error two months later and moved to withdraw deemed admissions. The motion was not heard, however, until July 18, 2019, at which time the trial court denied it because it was not verified. On July 23, 2019, AmEx National filed a verified motion to withdraw deemed admissions but apparently did not seek a ruling from the court until August 14, 2019—the day of trial. The trial court granted the motion over Saum's objection that AmEx National had failed to demonstrate good cause or a lack of prejudice. See Tex. R. Civ. P. 198.3.
In answer to Saum's request to disclose the identity of persons having knowledge of relevant facts, AmEx National identified nine individuals as "Assistant Custodians of Records of Plaintiff pertaining to Plaintiff's claims against Defendant," and stated that "each has knowledge of the facts and circumstances surrounding this cause of action." AmEx National identified these same nine individuals in answer to an interrogatory requesting the identity of AmEx National's trial witnesses. On August 10, 2019, AmEx National amended its discovery responses to omit six of the previously named assistant custodians of records. It added William McCarter as a person with knowledge of relevant facts and a potential trial witness, and identified him as an assistant custodian of records.
B. Trial
1. McCarter's testimony
McCarter was the only witness at trial. Saum moved to exclude McCarter's testimony on the ground that he had not been timely designated. The court denied that motion, stating on the record that it found no unfair surprise or unfair prejudice to Saum. It repeated this finding, as well as a finding that AmEx National showed good cause for the late designation, in its findings of fact filed after trial.
McCarter testified that he was familiar with AmEx National's practices and procedures for credit card accounts; he had reviewed AmEx National's computerized records of credit card accounts; that review showed that Saum applied for a credit card in 2010 and his application was approved; and after an application is approved, AmEx National sends out a cardmember agreement, a physical credit card, and subsequent statements containing any updates to the cardmember agreement.
Plaintiff's exhibit one is a copy of Saum's 2013 cardmember agreement. McCarter identified the exhibit and testified that it was "made at or near the time indicated on it by someone at American Express and kept in the regular course of business conducted by American Express." He further testified that it was in AmEx National's regular course of business to send Saum the cardmember agreement when he applied for and received an American Express credit card. McCarter explained that, because federal law requires AmEx National to keep records only for seven years, the original 2010 cardmember agreement was no longer available.
Concerning the discrepancy between AmEx National's name and the entity name on the cardmember agreement (American Express Centurion Bank), McCarter explained that "[t]here has been a corporate structure change since 2010 regarding American Express' name. Effectively it's just been a name change, though. We are still the organization and entity we were in 2010." McCarter learned of the name change through a company-wide communication.
The trial court admitted plaintiff's exhibit one over Saum's objection that it showed the contracting party to be American Express Centurion Bank rather than American Express National Bank.
McCarter next identified plaintiff's exhibit two as the affidavit of Robert Rebhan, another assistant custodian of records for American Express. The court admitted the exhibit over Saum's hearsay objection. We discuss the content of this affidavit in further detail below.
Finally, McCarter identified plaintiff's exhibit three as copies of credit card statements relating to Saum's account. He testified that they were "records of American Express made at or near the time indicated on them by someone at American Express and kept in the regular course of business conducted by American Express," and that it was "the regular practice of American Express to send the defendant a Cardmember Agreement when he applied for it and the statements at or near the date indicated on them in connection with the defendant's credit card." The court admitted plaintiff's exhibit three over Saum's objection that AmEx National did not lay a proper predicate for admission of business records.
On cross-examination, McCarter testified that he reviews American Express records to make sure that amounts are correct, that the cardmember name matches the account, and that details such as the home address are accurate. He does not, however, alter the records. McCarter further testified that it has been his experience that the records are "very well maintained and kept." He has never found an error in his current position and had rarely found any in his previous position with the company.
2. Rebhan's affidavit
Rebhan's affidavit contains the following statements:
• "I have personal knowledge of American Express' regular practices and procedures with respect to: (a) the transmittal of credit card account agreements, notices, billing statements, and other documents; and (b) quality assurance controls utilized to ensure that such transmittals are properly made."
• "The billing statements and other documents referred to herein were created at or near either the time of the transactions or the time the original statements were made and have been kept by American Express in the ordinary course of business."
• "The other records referred to herein were created and kept in the ordinary course of business by American Express and were created at or near the time of the occurrence of the matters set forth by those records and/or were created based upon information transmitted by a person with knowledge of the matters set forth in those records. It is the regular business practice of American Express to make and keep said records."
• "The statements contained in this affidavit are made based on my personal knowledge of the business records practices of American Express."
After describing AmEx National's regular practices concerning credit card accounts, Rebhan states that he had personally reviewed AmEx National's records concerning Saum's account and that those records reflect that Saum opened a credit card account in November 2010; AmEx National mailed Saum a copy of the cardmember agreement and periodic updates or revisions to that agreement; Saum used the credit card; AmEx National sent Saum monthly statements; there is no record of Saum asserting a valid unresolved objection to the balance owed; Saum defaulted and AmEx National closed his account; and the amount due and owing is $36,759.11.
At the close of trial, the court rendered judgment in favor of AmEx National for $36,759.11. The court signed a final judgment that same day, and thereafter filed findings of fact and conclusions of law in support of that judgment.
Issues
Saum raises seven issues on appeal. In his first four issues, Saum challenges the trial court's rulings permitting AmEx National to withdraw deemed admissions, admitting McCarter's testimony despite his untimely designation, admitting business records evidence over Saum's hearsay objection, and denying Saum's motion for continuance. In issues five and six, Saum challenges the legal and factual sufficiency of the evidence to support the judgment. And in a related final issue, Saum contends that AmEx National did not establish its entitlement to sue on the contract.
"Issues, if sustained, that require the judgment to be reversed and rendered should be addressed first." Rizvi v. Am. Express Nat'l Bank, No. 02-19-00197-CV, 2020 WL 3969585, at *3 (Tex. App.—Fort Worth June 18, 2020, no pet.) (mem. op.) (quoting Arshad v. Am. Express Bank, FSB, 580 S.W.3d 798, 803 (Tex. App.—Houston [14th Dist.] 2019, no pet.)); see Bradleys' Elec., Inc. v. Cigna Lloyds Ins. Co., 995 S.W.2d 675, 677 (Tex. 1999); see also Tex. R. App. P. 43.3. We will therefore begin by addressing Saum's challenges to the legal sufficiency of the evidence and AmEx National's entitlement to sue.
Discussion
A. Sufficiency of the evidence and entitlement to sue
1. Request for judicial notice
As a preliminary matter, Saum asks that we take judicial notice of information outside the record concerning the transaction between American Express Centurion Bank and American Express National Bank. Appellate courts may take judicial notice of matters outside the record to determine jurisdiction but are reluctant to take judicial notice of matters that go to the merits of a dispute. In re Estate of Hemsley, 460 S.W.3d 629, 638-39 (Tex. App.—El Paso 2014, pet. denied). Saum's request for judicial notice goes to the merits of his dispute with AmEx National, not to this court's jurisdiction. We decline the invitation to take judicial notice.
2. Standards of review
Whether there is legally sufficient evidence is determined by viewing the evidence in the light favorable to the verdict, crediting favorable evidence if reasonable factfinders could, and disregarding contrary evidence unless reasonable factfinders could not. City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005). A legal sufficiency challenge will be sustained only if
(1) the record discloses a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence
offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence establishes conclusively the opposite of the vital fact.Marathon Corp. v. Pitzner, 106 S.W.3d 724, 727 (Tex. 2003).
Factual sufficiency, on the other hand, is assessed by considering and weighing all of the evidence. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001). A fact finding will be set aside under this standard only if it is "so against the great weight and preponderance of the evidence that it is clearly wrong and unjust." Id. (citing Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986) (op. on reh'g)).
A trial court's findings of fact "have the same force and dignity as a jury's verdict upon questions." Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991). They are thus reviewed for legal and factual sufficiency under the same standards as are applied in reviewing the evidence to support a jury's verdict. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994).
3. Legal sufficiency of the evidence
a. AmEx National's entitlement to sue
Most of Saum's sufficiency challenges revolve around the theme that AmEx National cannot recover for breach of contract because Saum's cardmember agreement names American Express Centurion Bank as the issuer of Saum's credit card, not AmEx National. A similar argument was made to, and rejected by, this court in Rizvi v. American Express National Bank.
The defendant in Rizvi argued that the evidence was legally insufficient to show that AmEx National could sue for breach of a credit card contract made with American Express Bank, FSB ("AmEx FSB"). 2020 WL 3969585, at *4. AmEx National countered that it was entitled to sue on the contract because AmEx FSB had merged into AmEx National. Id.
Robert Rebhan, an assistant custodian of records for American Express, testified that he learned in the course of his employment that AmEx FSB had merged into AmEx National. Id. Rizvi did not controvert that testimony. Id. We concluded that, even in the absence of documentation proving the merger, Rebhan's testimony, which was based on his position with the company, was legally sufficient to establish AmEx National's right to sue on AmEx FSB's contract. Id.
The present case is indistinguishable from Rizvi. McCarter, an assistant custodian of records for American Express, testified that the company went through a name change in 2010 but that it was still "the same organization and entity." McCarter also testified that he learned about the name change through a company-wide communication. It is clear from the context of McCarter's testimony, including cross-examination, that the name change to which he referred was changing American Express Centurion Bank to American Express National Bank. As in Rizvi, Saum did not present any evidence controverting the name change. See id.
AmEx National also introduced an affidavit in this case from Rebhan, the same assistant custodian of records who testified in Rizvi. In that affidavit, Rebhan refers to AmEx National as having been formerly known as American Express Centurion Bank. Saum argues that we should disregard that reference as inadmissible hearsay because it goes beyond the authentication requirements for which the affidavit was admitted. See Ortega v. Cach, LLC, 396 S.W.3d 622, 630 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (explaining that portions of a business records affidavit that go beyond authentication are inadmissible hearsay). We disagree.
We address the admissibility of other portions of this affidavit below.
Rebhan's affidavit authenticates as a business record a copy of Saum's 2018 cardmember agreement. See Tex. R. Evid. 803(6). That cardmember agreement reflects that Saum's contract is with American Express Centurion Bank. But the purpose of Rebhan's affidavit was to authenticate the contract as a business record of AmEx National. This required demonstrating, among other things, that AmEx National kept the contract in the course of a regularly conducted business activity. See Tex. R. Evid. 803(6)(B). And central to that showing is that AmEx National had rights in the contract, which is established by the statement that AmEx National was formerly known as American Express Centurion Bank. Because the statement is not extraneous to the authentication, it is not inadmissible hearsay. Cf. Ortega, 396 S.W.3d at 630.
McCarter's and Rebhan's testimony is legally sufficient to establish that AmEx National is American Express Centurion Bank with a different name. See Rizvi, 2020 WL 3969585, at *4. "[A] name change does not affect existing contractual obligations of parties that were in place before the change." Id. at *6. Accordingly, the testimony in this case, like the testimony in Rizvi, is legally sufficient to establish AmEx National's entitlement to enforce Saum's contractual obligations under the cardmember agreement. Each of Saum's legal sufficiency challenges based on the contention that AmEx National is not entitled to sue on the contract is overruled.
b. Mailing the cardmember agreement
Saum also challenges the legal sufficiency of the evidence to support the trial court's finding that AmEx National mailed an updated cardmember agreement to Saum on or around November 9, 2018. Plaintiff's exhibit two contains a copy of a letter from American Express to Saum transmitting an updated cardmember agreement. But the date on that letter is February 25, 2018. There is no evidence that an agreement was mailed to Saum on November 9, 2018. The court's finding is therefore not supported by the evidence. That does not mean, however, that the error is reversible.
"While an erroneous finding of fact on an ultimate fact issue is harmful error, an immaterial finding of fact is harmless and not grounds for reversal." Sister Initiative, LLC v. Broughton Maint. Ass'n, Inc., No. 02-19-00102-CV, 2020 WL 726785, at *26 (Tex. App.—Fort Worth Feb. 13, 2020, pet. denied) (mem. op.). An ultimate fact issue is "one that is essential to the cause of action and has a direct effect on the judgment." Id.
Whether a cardmember agreement was mailed to Saum on November 9, 2018, is not essential to AmEx National's breach of contract cause of action and has no direct effect on the judgment. Plaintiff's exhibit one, a copy of the September 17, 2013 cardmember agreement that is also referenced in the trial court's finding, establishes the contractual relationship. The erroneous finding concerning a November 9, 2018 mailing is immaterial and, thus, harmless error. See id.
c. Saum's obligation on the credit card account
Saum next challenges the legal sufficiency of the evidence to support the court's findings that he kept and used the American Express credit card to make purchases and/or obtain cash advances, and that he owes a balance on the account of $36,759.11. The basis of these challenges is that McCarter did not have personal knowledge of whether Saum personally used the credit card or the amount of the outstanding balance on the account. But McCarter's testimony is not necessary to establish these matters.
Both iterations of the cardmember agreement in the record state, "When you use the Account (or you sign or keep the card), you agree to the terms of the Agreement." One such term is that "[y]ou promise to pay all charges," including charges made personally by the cardholder and charges made by others whom the cardholder allows to use the account. The agreement also contains provisions for a cardholder to dispute charges or report inaccuracies on his account.
Plaintiff's exhibit three contains billing statements on Saum's account establishing use of, and payments on, the account. The final statement reflects that the account has been canceled and that there is a past due amount of $36,759.11.
The documentary evidence is legally sufficient to support the trial court's findings that Saum kept and used the credit card account and was ultimately obligated to pay $36,759.11 on that account. See Rizvi, 2020 WL 3969585, at *5 (concluding that similar evidence is legally sufficient).
d. Evidentiary rulings
Saum also challenges the sufficiency of the evidence to support findings of fact relating to the court's evidentiary rulings. We review these rulings below under the appropriate abuse of discretion standard. See Fleming v. Wilson, 610 S.W.3d 18, 21 (Tex. 2020) (stating that admission or exclusion of evidence is reviewed for abuse of discretion); Wheeler v. Green, 157 S.W.3d 439, 443 (Tex. 2005) (stating that withdrawal of deemed admissions is reviewed for abuse of discretion).
e. Conclusions of law
Saum's remaining legal sufficiency challenges concern the trial court's conclusions of law. Conclusions of law are not susceptible to sufficiency review; rather, they are reviewed to determine their correctness based upon the facts. AMX Enters., L.L.P. v. Master Realty Corp., 283 S.W.3d 506, 519 (Tex. App.—Fort Worth 2009, no pet.) (op. on reh'g). Saum does not contend that the court's conclusions of law are not correct based on its findings of fact. And we have determined that the court's fact findings are based on legally sufficient evidence. Saum's challenges to the court's conclusions of law are overruled.
4. Factual sufficiency of the evidence
Saum challenges the factual sufficiency of the evidence to support the trial court's finding that he owes AmEx National a balance on his account of $36,759.11. But "a factual-sufficiency challenge presupposes some evidence on both sides of the scale that needs weighing: 'Factual sufficiency points of error concede conflicting evidence on an issue, yet maintain that the evidence against [the factfinder's] finding is so great as to make the finding erroneous.'" Rizvi, 2020 WL 3969585, at *5 (quoting Cowboys Concert Hall-Arlington, Inc. v. Jones, No. 02-12-00518-CV, 2014 WL 1713472, at *5 (Tex. App.—Fort Worth May 1, 2014, pets. denied) (per curiam) (mem. op.)). Just as in Rizvi, the trial court here had no conflicting evidence before it; Saum did not offer any testimony or evidence on the merits and rested immediately after AmEx National did. See id. Saum's factual sufficiency challenge is overruled.
Saum offered, and the court admitted, AmEx National's discovery responses as defendant's exhibits one through three.
Saum also challenges the factual sufficiency of the evidence to support the trial court's conclusions of law. Those challenges are overruled for the reasons stated above. See AMX Enters., 283 S.W.3d at 519.
5. Conclusion on sufficiency of the evidence
The evidence is legally and factually sufficient to establish AmEx National's entitlement to sue on the contract and to support each of the challenged findings of fact. The sole exception is that the evidence is legally insufficient to support the finding that a cardmember agreement was mailed to Saum on November 9, 2018. There is no reversible error, however, because that finding may be disregarded as immaterial. See Sister Initiative, 2020 WL 726785, at *26. Issues five, six, and seven are overruled.
B. Withdrawal of deemed admissions
1. Guiding principles
In his first issue on appeal, Saum contends that the trial court abused its discretion by permitting AmEx National to withdraw deemed admissions. If a party fails to timely respond to a request for admissions, the request is deemed to be admitted. Tex. R. Civ. P. 198.2(c). A trial court may permit a party to withdraw deemed admissions, though, if two conditions are met:
(a) the party shows good cause for the withdrawal or amendment; andTex. R. Civ. P. 198.3.
(b) the court finds that the parties relying upon the responses and deemed admissions will not be unduly prejudiced and that the presentation of the merits of the action will be subserved by permitting the party to amend or withdraw the admission.
A trial court has broad discretion in ruling on a request to withdraw deemed admissions. Wheeler, 157 S.W.3d at 443; Stelly v. Papania, 927 S.W.2d 620, 622 (Tex. 1996). An appellate court may set aside the trial court's ruling "only if, after reviewing the entire record, it is clear that the trial court abused its discretion." Stelly, 927 S.W.2d at 622. "An abuse of discretion occurs when a court acts without reference to guiding rules or principles, or acts arbitrarily or unreasonably." Id.; Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241 (Tex. 1985).
2. Factual background
It is undisputed that AmEx National did not timely respond to Saum's request for admissions. AmEx National explained in its motion to withdraw the resultant deemed admissions that the failure to respond was an administrative oversight—the failure to properly calendar the response deadline resulting from a change in personnel. AmEx National further explained that it discovered the error on November 7, 2018. It served its responses to the request for admissions two days later, on November 9, 2018. Saum thus received AmEx National's responses nine months before trial, which occurred on August 14, 2019.
AmEx National filed its original motion to withdraw deemed admissions on November 13, 2018, less than a week after it discovered its failure to timely respond. The court heard that motion on July 18, 2019, and denied it because it was not verified. Five days later, on July 23, 2019, AmEx National filed a verified motion to withdraw deemed admissions. It does not appear from the record that that motion was set for hearing.
Immediately before the start of trial on August 14, 2019, AmEx National reminded the court that Saum had objected to its motion to withdraw deemed admissions on the ground that it was not verified. AmEx National informed the court that it had since filed a verified motion and asked the court for an order on that motion "as a matter of housekeeping." Saum acknowledged that he had received AmEx National's responses in November 2018, but argued that he was prejudiced by the delay in having the motion to withdraw heard because he relied on the deemed admissions in preparing for trial. The trial court granted the verified motion to withdraw deemed admissions.
3. Good cause for withdrawal
Rule 198.3 first requires that the party seeking to withdraw deemed admissions demonstrate good cause for that withdrawal. Tex. R. Civ. P. 198.3(a). "'Good cause' is established when the failure to respond is accidental or the result of a mistake, rather than intentional or the result of conscious indifference." Wal-Mart Stores, Inc. v. Deggs, 968 S.W.2d 354, 356 (Tex. 1998); see Wheeler, 157 S.W.3d at 442. A clerical error, including a calendaring error, is "sufficient to establish good cause for a failure to timely respond to a request for admission, even if a party is negligent, as long as the party's negligence does not rise to the level of conscious indifference." Boulet v. State, 189 S.W.3d 833, 837 (Tex. App.—Houston [1st Dist.] 2006, no pet.).
Saum concedes that "it would appear that [AmEx National] met the requirement of showing good cause" for withdrawing deemed admissions. He urges, though, that the eight-month delay in setting the original motion for hearing, and the additional delay in filing and obtaining a ruling on the verified motion, demonstrate conscious indifference that negates AmEx National's showing of good cause. Thus, Saum's argument on appeal is based not on the timing of AmEx National's response to the request for admissions but on the timing of its verified motion and the ultimate ruling on that motion. Saum misconstrues AmEx National's burden.
The focus of the good cause requirement contained in Rule 198.3 is on why the party did not timely respond to the request for admissions. See Wheeler, 157 S.W.3d at 442; Deggs, 968 S.W.2d at 356. There is no additional requirement in the rule or the caselaw that a party demonstrate good cause for any delay in obtaining a ruling effecting that withdrawal. Indeed, the supreme court has found error in the refusal to permit withdrawal of deemed admissions when that withdrawal was requested for the first time in a motion for new trial. See Wheeler, 157 S.W.3d at 442, 444.
AmEx National also raises a due process argument in support of the trial court's ruling. It notes that deemed admissions that preclude a presentation of the merits "implicate the same due process concerns as other case-ending discovery sanctions." Marino v. King, 355 S.W.3d 629, 632 (Tex. 2011); see Wheeler, 157 S.W.3d at 443. As a result, due process bars merits-preclusive sanctions "absent flagrant bad faith or callous disregard for the rules." Wheeler, 157 S.W.3d at 443.
AmEx National contends that Saum bore the burden of showing that it acted with flagrant bad faith or callous disregard for the rules, and that he did not sustain that burden. Saum responds that the trial court did not know at the time of its ruling whether the requested admissions were merits-preclusive or not because the court did not have the requests before it. He concludes that AmEx National is therefore precluded from asserting its due process argument on appeal.
It is not necessary to resolve this dispute because we hold that the record establishes, and Saum concedes, that the trial court did not abuse its discretion by finding good cause for withdrawal of the deemed admissions. See Boulet, 189 S.W.3d at 837 (recognizing clerical error as good cause).
4. Lack of undue prejudice
While delay in obtaining an order effecting the withdrawal of deemed admissions does not affect a party's good cause for withdrawal, in some cases it may impact whether the opposing party is unduly prejudiced by permitting withdrawal. This, however, is not such a case.
"Undue prejudice depends on whether withdrawing an admission or filing a late response will delay trial or significantly hamper the opposing party's ability to prepare for it." Wheeler, 157 S.W.3d at 443. AmEx National served its responses to Saum's request for admissions and filed a motion to withdraw deemed admissions a full nine months before trial. Although the motion was technically deficient, it was sufficient to alert Saum that AmEx National intended to contest the deemed admissions. Consequently, Saum was on notice that it would not be reasonable to rely on those deemed admissions in preparing for trial.
A similar situation occurred in Wheeler v. Green. In that case, a party demonstrated in a motion for new trial that, although her response to a request for admissions was late, her opponent had received it six months before the summary judgment hearing. Id. The supreme court stated that "[t]he lower courts could not have concluded on this record that [the requesting party] would suffer any undue prejudice if the admissions were withdrawn." Id. The same is true in this case. Saum received AmEx National's responses nine months before trial. The trial court did not abuse its discretion by concluding that permitting withdrawal of the deemed admissions would not significantly hamper Saum's ability to prepare for trial and, therefore, would not cause him undue prejudice. See id. at 442-43.
5. Conclusion on the withdrawal of deemed admissions
The trial court did not abuse its discretion by granting AmEx National's verified motion to withdraw deemed admissions. Saum's first issue is overruled.
C. Evidentiary rulings
In his second and third issues, Saum contends that the trial court abused its discretion by admitting McCarter's testimony because AmEx National did not timely designate him as a trial witness and because he did not have personal knowledge of how AmEx National's records were created. Saum also contends that the court abused its discretion by admitting plaintiff's exhibit two because AmEx National did not establish the predicate for admitting business records.
We review a trial court's decision to admit or exclude evidence for an abuse of discretion. See Fleming, 610 S.W.3d at 21; Serv. Corp. Int'l v. Guerra, 348 S.W.3d 221, 235 (Tex. 2011). "A trial court abuses this discretion when it acts without regard for guiding rules or principles." U-Haul Int'l, Inc. v. Waldrip, 380 S.W.3d 118, 132 (Tex. 2012). But even if a trial court's evidentiary ruling is an abuse of discretion, reversal is appropriate only if the error was harmful. Id.; Tex. R. App. P. 44.1.
1. Untimely designation
The rules of civil procedure provide that a party may not "offer the testimony of a witness (other than a named party) who was not timely identified" unless the court finds one of two things—(1) "there was good cause for the failure to timely make, amend, or supplement the discovery response; or (2) the failure to timely make, amend, or supplement the discovery response will not unfairly surprise or unfairly prejudice the other parties." Tex. R. Civ. P. 193.6(a). "The burden of establishing good cause or the lack of unfair surprise or unfair prejudice is on the party seeking to . . . call the witness." Tex. R. Civ. P. 193.6(b).
It is undisputed that McCarter was not timely designated. But the trial court expressly found that there was good cause for AmEx National's failure to timely designate him as a witness and that this failure did not cause any unfair surprise or undue prejudice to Saum. We need only address the finding of good cause.
McCarter testified that he was one of twelve assistant custodians of record employed by American Express. Those assistant custodians work in regional teams. McCarter testified that he was asked to appear in this case the Thursday before the Wednesday trial date because the other assistant custodians were either on vacation or on other cases. AmEx National similarly explained that it did not designate McCarter earlier because it did not know until the preceding Thursday that McCarter would be the one testifying.
The record supports the trial court's finding of good cause. Because this finding is sufficient to establish that the court did not abuse its discretion by admitting McCarter's testimony, we need not address whether AmEx National also established a lack of unfair surprise or undue prejudice. See Tex. R. Civ. P. 193.6(b) (requiring a showing of good cause or lack of unfair surprise or prejudice). Issue two is overruled.
It is also unnecessary to address AmEx National's argument that McCarter was its designated corporate representative and thus was a "named party" expressly excluded from Rule 193.6(a)'s exclusion provision. See Tex. R. Civ. P. 193.6(a) (requiring the conditional exclusion of an undisclosed "witness (other than a named party) who was not timely identified"); Rizvi, 2020 WL 3969585, at *7 (finding it unnecessary to address the identical argument).
2. Personal knowledge
Saum's third issue states, "Did the trial court abuse its discretion in admitting McCarter's testimony when he did not testify as to how the records were created?" We addressed the identical issue in Rizvi. See 2020 WL 3969585, at *7. We noted in that case that "[a] records custodian can prove up business records without being the record's creator or having personal knowledge of the information in it—and without even being employed by the same entity as the record's creator." Id. at *8 (citing Gaydos v. Bank of Am., N.A., No. 02-14-00221-CV, 2015 WL 1544014, at *2 (Tex. App.—Fort Worth Apr. 2, 2015, pet. denied) (mem. op.) (noting that qualified witnesses need have personal knowledge only of the "manner in which the records were kept")).
We further noted in Rizvi that "the requirement of personal knowledge is satisfied when an affiant identifies the position he holds and describes his job responsibilities so that one can reasonably assume he would be particularly situated to have personal knowledge of the facts within his affidavit." Id. (quoting Rodriguez v. Citibank, N.A., No. 04-12-00777-CV, 2013 WL 4682194, at *2 (Tex. App.—San Antonio Aug. 30, 2013, no pet.) (mem. op.)).
Other courts have similarly concluded that testimony by a custodian of records demonstrating custody and control of records relating to a credit card account is "adequate to establish the affiant's personal knowledge for the purpose of authentication of the attached records." Wynne v. Citibank (S. Dakota) N.A., No. 07-06-0162-CV, 2008 WL 1848286, at *2 (Tex. App.—Amarillo Apr. 25, 2008, pet. denied) (mem. op.) (citing Hay v. Citibank (S. Dakota) N A., No. 14-04-01131-CV, 2006 WL 2620089, *3 (Tex. App.—Houston [14th Dist.] Sept. 14, 2006, no pet.) (op. on reh'g)).
Duncan Development, Inc. v. Haney, 634 S.W.2d 811 (Tex. 1982), on which Saum relies to impose an additional knowledge requirement, is inapposite. The issue in that case was whether a general contractor laid a proper foundation for a summary of invoices submitted by third-party subcontractors. Id. at 812. As discussed above, the evidence establishes that AmEx National is American Express Centurion Bank by another name. Consequently, American Express Centurion Bank's records, which AmEx National sought to introduce, were not business records of a third party.
We concluded in Rizvi that the testimony of an assistant custodian of records, including testimony that the witness had knowledge of and access to the account records, was sufficient to satisfy the foundational requirements of Rule 803(6). 2020 WL 3969585, at *8. We reach the same conclusion in this case. McCarter testified that he was an assistant custodian of records for American Express; he had care, custody, and control of the records concerning Saum's account; and he was familiar with American Express's practices and procedures for credit card accounts. This testimony is sufficient to establish his personal knowledge for the purpose of authenticating the business records he sponsored. See Wynne, 2008 WL 1848286, at *2. This portion of issue three is overruled.
3. Business records affidavit
Saum next contests the admission of plaintiff's exhibit two, which consists of Rebhan's affidavit and a copy of the 2018 version of Saum's cardmember agreement. Saum argues that the trial court abused its discretion by admitting this exhibit because AmEx National did not establish the proper predicate for removing a business record from the rule against hearsay.
Insofar as Saum complains that the trial court admitted plaintiff's exhibit two without a formal request from AmEx National, that complaint was not raised in the court below and is waived. See Tex. R. App. P. 33.1.
AmEx National construes Saum's argument as being that there is no testimony to establish the business records predicate. This argument fails, AmEx National urges, because "[t]he foundation for admission of a business record may be established by testimony or by affidavit." Trantham v. Isaacks, 218 S.W.3d 750, 755 (Tex. App.—Fort Worth 2007, pet. denied) (citing Tex. R. Evid. 902(10)). While we acknowledge that Saum uses the term "testimony" in his brief, we do not read his complaint as narrowly as does AmEx National. Saum objected at trial that the Rebhan affidavit was hearsay and "certainly not a business record." We believe a fair reading of his appellate argument, like his trial objection, is that AmEx National did not establish the business records exception to the hearsay rule.
A party seeking to remove a record from the prohibition against hearsay must show that (1) the record was made and kept in the course of a regularly conducted business activity; (2) it was the regular practice of the business activity to make the record; (3) the record was made at or near the time of the event that it records; and (4) the record was made by a person with knowledge who was acting in the regular course of business. Diversified Fin. Sys., Inc. v. Hill, Heard, O'Neal, Gilstrap & Goetz, P.C., 99 S.W.3d 349, 356 (Tex. App.—Fort Worth 2003, no pet.); see Tex. R. Evid. 803(6) (listing elements of the business records exception to hearsay). The Rebhan affidavit establishes these elements for the appended cardmember agreement. Consequently, the court did not abuse its discretion by admitting that agreement and the portions of the affidavit establishing its admissibility. The affidavit, however, reached considerably further.
"[W]hen an ex parte affidavit presents evidence beyond the simple authentication requirements of rule 902, the extraneous portions of the affidavit constitute inadmissible hearsay." Ortega, 396 S.W.3d at 630; accord Kenny v. Portfolio Recovery Assocs., LLC, 464 S.W.3d 29, 33 (Tex. App.—Houston [1st Dist.] 2015, no pet.); see Tex. R. Evid. 902(10) (listing required content of a business records affidavit). Much of the Rebhan affidavit is extraneous to the simple authentication requirements of Rule 902. For example, the affidavit states that Rebhan personally reviewed Saum's account and that review revealed that Saum opened an account in 2010, he used the account to purchase goods and services and/or to obtain cash advances, he defaulted on the account, American Express closed the account, and Saum owed the sum of $36,759.11. These portions of the affidavit are inadmissible hearsay. See Kenny, 464 S.W.3d at 33; Ortega, 396 S.W.3d at 630.
Because this hearsay evidence was admitted over Saum's objection, we did not consider it in conducting our legal sufficiency review. See Kmart Stores of Tex., L.L.C. v. Ramirez, 510 S.W.3d 559, 567 (Tex. App.—El Paso 2016, pet. denied) (noting that hearsay can be considered in legal sufficiency review only if admitted without objection); Kenny, 464 S.W.3d at 33 (inadmissible portion of business records affidavit cannot be considered in legal sufficiency review).
The trial court abused its discretion by admitting the extraneous portions of the Rebhan affidavit over Saum's hearsay objection. But "[e]rroneous admission of evidence requires reversal only if the error probably (though not necessarily) resulted in an improper judgment." Nissan Motor Co. v. Armstrong, 145 S.W.3d 131, 144 (Tex. 2004); see Kia Motors Corp. v. Ruiz, 432 S.W.3d 865, 883 (Tex. 2014). In conducting the required harm analysis, "[w]e review the entire record, and require the complaining party to demonstrate that the judgment turns on the particular evidence admitted." Nissan, 145 S.W.3d at 144; accord Ruiz, 432 S.W.3d at 883.
"Clearly, erroneous admission is harmless if it is merely cumulative." Nissan, 145 S.W.3d at 144. The extraneous portions of Rebhan's affidavit are cumulative because the facts stated there are established by other evidence in the record.
McCarter testified that Saum opened an account in November 2010. The record contains two cardmember agreements in Saum's name, one dated September 17, 2013, and the other dated February 25, 2018. The record also contains numerous billing statements showing that Saum used the card for purchases and/or cash advances, he defaulted on the account, American Express closed the account, and the amount due and owing is $36,759.11.
Because the extraneous portions of the Rebhan affidavit are cumulative of evidence properly admitted at trial, the admission of those extraneous portions is harmless error. See id. We overrule the remainder of Saum's third issue.
D. Denial of continuance
Immediately following the trial court's decision to allow McCarter to testify, Saum orally requested the opportunity to depose him, suggesting that the trial could be reset after that deposition. AmEx National responded that Saum had not deposed any of the witnesses it had previously identified and questioned why it would be necessary to depose McCarter. The court ruled that the trial would go forward as scheduled. Saum contends in his fourth issue that the trial court abused its discretion by denying his request for a continuance.
An appellate court will not disturb a trial court's ruling on a motion for continuance unless the record discloses a clear abuse of discretion. See BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 800 (Tex. 2002); Villegas v. Carter, 711 S.W.2d 624, 626 (Tex. 1986).
A court may grant a continuance to allow an untimely discovery response to be made and to allow the opposing party "to conduct discovery regarding any new information presented by that response." Tex. R. Civ. P. 193.6(c). The rule permits such a continuance regardless of whether the party offering the evidence established good cause for the failure to timely respond or a lack of prejudice or surprise to the opposing party. Id. The rule does not, however, dispense with the general requirement that a motion for continuance must be supported by an affidavit demonstrating sufficient cause. Tex. R. Civ. P. 251 (stating that no continuance shall be granted "except for sufficient cause supported by affidavit"). "If a motion for continuance is not made in writing and verified, it will be presumed that the trial court did not abuse its discretion by denying the motion." In re C.D.S.-C., No. 02-12-00484-CV, 2013 WL 1830398, at *14 (Tex. App.—Fort Worth May 2, 2013, no pet.) (per curiam) (mem. op.); accord Jimison v. Tex. Workforce Comm'n Prof'l Caretakers, Inc., No. 02-09-127-CV, 2010 WL 851418, at *2 (Tex. App.—Fort Worth Mar. 11, 2010, no pet.) (mem. op.).
Saum's motion for continuance was not in writing and verified. We presume that the trial court did not abuse its discretion by denying it. See In re C.D.S.-C., 2013 WL 1830398, at *14; Jimison, 2010 WL 851418, at *2. In addition, the court's ruling is supported by Saum's failure to demonstrate sufficient cause for a continuance. See Tex. R. Civ. P. 193.6(c). Specifically, Saum failed to explain why he needed to depose McCarter, who was presented as an assistant custodian of records, when he had not deposed any of the nine assistant custodians of records previously designated by AmEx National.
Saum told the trial court that he had deposed one of the designated witnesses but that deposition was taken in a different lawsuit.
The trial court did not abuse its discretion by denying Saum's oral motion for continuance. Saum's fourth issue is overruled.
Conclusion
The judgment of the trial court is affirmed.
/s/ Wade Birdwell
Wade Birdwell
Justice Delivered: March 18, 2021