Elite Towing, Inc. v. LSI Financial GroupElite Towing, Inc. v. LSI Financial Group
Aрpellee LSI Financial Group (“LSI”) sued appellant Elite Towing, Inc. (“Elite”) 1 in district court urging various claims, including conversion, negligence, and violation of section 70.006 of the Texas Property Code, 2 arising out of Elite’s disposing of an automobile in its possession. The district court granted a partial summary judgment in favor of LSI as to liability on its Property Code claim. Later, following a bench trial, the district court rendered a final judgment awarding LSI damages and attorney’s fees. Elite appeals. We will affirm the district court’s judgment.
On June 26, 1996, Elite gained possession of a 1994 Mitsubishi Mirage automobile. Thе vehicle, owned by Keshia L. Eubanks, was subject to a lien created by a security agreement. LSI is the loan servicer and attorney-in-fact for the secured party, First Bank of the Americas. 3 On July 2, Elite sent written notice regarding its possession of the vehicle to Eubanks and the original lienholder, 4 a copy of which was later obtained by LSI. The notice stated, inter alia, that the vehicle would be sold at a public sale on August 1 unless it was redeemed and removed from the premises. It is undisputed that this is the only notice that Elite sent to either the owner or any lienholder of the vehicle.
On August 1, Lissa Ruffin, president of Elite, conducted a sale and disposed of the vehicle. Robert Ruffin was the only bidder present at the sale and bought the vehicle on behalf of Elite Wholesales for $540. Approximately one week later, LSI contacted Elite and was informed of the sale.
LSI sued Elite and later filed a motion for summary judgment asserting that it was entitled to judgment as a matter of law because in selling the vehicle Elite failed to comply with section 70.006 of the Property Code.
See
On July 1, shortly after the hearing but before the signing of the order, LSI served Elite with notice that trial of the remaining issues was set for August 25. The certificate of service attached to the notice reflects that it was sent to Elite’s attorney, James C. Mosser, by certified mail return receipt requested, at the address for Mosser reflected in Elite’s trial pleadings. It is not in dispute that the address shown in the certificate of service is Mosser’s correсt office address. On July 3, Gerald Scheff, an attorney officing in the same building as Mosser, signed the receipt for the notice. The receipt was returned to LSI’s attorney. Neither Mosser nor a representative of Elite appeared at the trial. Mosser asserts that he never received the notice. In the absence of Elite, its representative, or attorney, the district court conducted a bench trial and rendered judgment for LSI for damages and attorney’s fees in the amounts of $8,625 and $14,472.09, respectively. Elite filed a motion for new trial alleging lack of notiсe of the trial setting. Elite did not request a hearing on its motion, and it was overruled by operation of law.
Elite appeals in five issues: the first two attack the partial summary judgment; the third complains that Elite should have been granted a new trial because its attorney did not receive notice of the trial setting; the fourth addresses whether attorney’s fees were appropriate in this case; the final issue asserts that venue was improper.
DISCUSSION
Partial Summary Judgment
The standards for reviewing a summary judgment are well established. The movant for summary judgment has the burden of showing that no genuine issue of matеrial fact exists and it is entitled to judgment as a matter of law.
Nixon v. Mr. Property Management Co.,
Conversion and Negligence
Elite asserts that the district court erroneously rendered summary judgment against it on LSI’s conversion and negligence
Compliance with the Texas Property Code
(a) A holder of a lien under this subchap-ter on a motor vehicle ... who retains possession of the vehicle ... for 30 days after the day that the charges accrue shall give written notiсe to the owner and each holder of a lien recorded on the certificate of title....
(b) If the charges are not paid before the 31st day after the day that the notice is mailed, the lienholder may sell the vehicle ... at a public sale and apply the proceeds to the charges....
Elite argues that it could not have violated
As there are no competing claims to title of the vehicle, we may look to the record for evidence to determine whether the vehicle was in fact “sold” by Elite. The summary-judgment proof reflects Elite sold the vehicle at a “public sale,” Elite Wholesales bought the vehicle at this sale, Elite Wholеsales is the present owner of the vehicle, and Robert Ruffin (presumably on behalf of Elite Wholesales) took possession of the vehicle and made repairs to it.
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We conclude that
Having held that the vehicle was in fact sold, we must determine if Elite gave proper notice of the sale. Elite argues that
Chapter 70 of the Property Code addresses the lien of a garageman such as Elite. Section 70.003 grants a garageman with whom a motor vehicle is left fоr care a lien on the vehicle for charges for that care, including reasonable towing charges.
See
Elite argues that it complied with the notice requirements set out in
Section 70.006(a) requires a lienholder who retains possession of a vehicle for 30 days to send a notice to the owner requesting payment. If the owner has not made the payments on the vehicle before the 31st day after the notice was sent, then the lienholder can sell the car.Tex. PROP. Code Ann. § 70.006(b) . This amounts to a minimum of 61 days a lienholder has to retain possession of a vehiclе before the lienholder can sell the vehicle.
Dob’s Tire & Auto Ctr.,
Elite also attempts to establish sufficient notice by relying on the Texas Transportation Code. While it is true that section 68B.034 of the Transportation Code provides that notice sent under section 683.012 satisfies the notice requirements under chapter 70 of the Property Code, section 683.012 applies to a notice of abandonment sent by a
law enforcement agency.
10
See
Pleadings
Elite claims that LSI’s pleadings do not support its motion for summary judgment. LSI’s trial pleadings allege that Elite failed to give “the requisite notices” pursuant to sections 70.004 and 70.006 of the Property Code. LSI’s motion for summary judgment claims that Elite violated
Affirmative Defenses
Elite urges this Court to reverse the district court’s partial summary judgment because Elite’s answer asserts numerous “affirmative and verified defenses ... and there are genuine issues of material fact as to each element of the affirmative defense [sic].” Elite then sets out eleven so-called affirmative or verified defenses, ten of which address compliance with the notice and sale provisions of the Property Code. We have previously disposed of those issues and decline to revisit them.
Elite raises as an additional affirmative defense that LSI is not authorized to do business in this state, but brings forth no summary-judgment proof whatsoever to support this contention. Nor does Elite’s brief contain argument or authorities in support of this allegation.
See
Affidavits
Elite argues that the affidavits of Mark Armstrong and Carl Lopez attached to LSI’s motion for summary judgment arе defective.
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First, Elite complains about Armstrong’s and Lopez’s testimony concerning
Elite also complains that Lopez’s affidavit is defective because it contains hearsay. While Elite does not specifically direct us to statements in Lopez’s affidavit that constitute hearsay, 13 after examining the record we find that Lopez’s affidavit contains only one heаrsay statement arguably material to the district court’s decision to grant partial summary judgment. Lopez stated that “Elite Towing informed LSI that Elite Towing had ‘sold’ the Vehicle.” Elite’s own summary-judgment proof, however, establishes that the vehicle was sold. 14 Therefore, Lopez’s testimony is cumulative, and any hearsay is harmless. We find this claim to be without merit.
Finally, Elite argues that Lopez’s affidavit is defective because Lopez is an interested witness. Summary judgment may be based on the testimony of an interested witness if that evidence “is clear, positive and direct, otherwise credible and free from contradictions and inconsistencies, and could have been readily controverted.”
Therefore, we overrule those issues attacking the partial summary judgment.
Motion for New Trial
Elite’s third issue addresses whether it is entitled to a new trial because it did not receive notice of the August 25 trial setting.
A default judgment should be set aside and a new trial ordered in any case in which the failure of defendant to answer before judgment was not intentional, or the result of conscious indifference on his part, but was due to a mistake or accident; provided the motion for a new trial sets up a meritorious defense and is filed at a time when granting thereof will occasion no delay or otherwise work an injury to the plaintiff.
Craddock v. Sunshine Bus Lines, Inc.,
Notice of a trial setting may be served on a party’s attorney of record by certified mail.
See
“It is universally recognized that notice to [an] agent is notice to the principal.”
Grissom,
Therefore, we must determine whether Scheff was Mosser’s agent. We begin with the general rule guiding the creation of an agency relationship:
As between рarties to the relation, there must be a meeting of the minds in establishing the agency, and the consent of both the principal and the agent is necessary to create the agency, although such consent may be implied rather than expressed. The principal must intend that the agent act for him, the agent must intend to accept the authority and act on it, and the intention of the parties must find expression in either words or conduct between them.
Grissom,
We find that an agency relationship existed between Scheff and Mosser.
See Grissom,
Elite urges that Scheff was not an employee, agent, partner, associate, or shareholder of Mosser and did not act for the benefit of Mosser in this case. While it is true that a party is not deemed to have received notice when such nоtice is signed and accepted by one who has no authority to sign it, the facts in this case distinguish it from authority supporting that proposition. For example, in
United National Bank v. Travel Music of San Antonio, Inc.,
In
City of Houston v. Riner,
In light of the circumstances in this case, we find that Seheff was Mosser’s agent and was authorized to accept notice of the trial setting for Mosser. Because notice to Seheff is imputed to Mosser,
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we conclude that Elite’s failure to appear at trial was not due to an accident. To hold otherwise would allow the manipulаtion of receipt for notices and would undermine and render useless the provisions of
Attorney’s Fees
By its fourth issue, Elite challenges the district court’s award of attorney’s fees on two bases. First, that the evidence does not support a judgment in LSI’s favor on LSI’s claim of conversion, and second, if so, because conversion is a tort, it will not support an award of attorney’s fees. LSI responds that we cannot address this issue because ET failed to preserve it in its motion for new trial. Generally, a point in a motion for new trial is not a prerequisite to a complaint on appeal.
See
Effective September 1, 1997, the supreme court amended the Texas Rules of Appellate Prоcedure. New Rule 33.1 is similar to previous Rule 52(a) in that it requires a complaint to first be presented to the trial court in order to preserve the complaint for appellate review.
See
However, even if Elite’s complaint had been properly preserved, we hold that the district court was correct in awarding LSI attorney’s fees.
Conversion
Before the district court LSI pleaded that when Elite failed to comply with the Property Code prior to selling the vehicle, the sale was void and the transfer of the vehicle constituted an illegal conversion. “Conversion is the ‘wrongful exercise of dominion and control over another’s property in denial of or inconsistent with his rights.’”
Bandy v. First State Bank,
“If one exercises dominion and control over a car by selling it without having a right to dо so, he converts the vehicle.”
Kollision King, Inc. v. Calderon,
Basis for Recovery
Elite further asserts that the district court erred in awarding attorney’s fees to LSI because attorney’s fees may not be awarded for conversion, which it alleges is the basis for LSI’s cause of action. Under section 70.008 of the Property Code, “The court in a suit concerning possеssion of a motor vehicle ... and a debt due on it may award reasonable attorney’s fees to the prevailing party.”
Here, LSI recovered judgment against Elite in conversion because Elite, having sold the vehicle to Elite Wholesales, could not surrender the vehicle. However, as in
Kollision King,
at issue was the right to the possession of the vehicle and the debt secured by the possessory lien.
See id.
Elite could not legally sell the vehicle to dischаrge the debt against it without giving proper notice to LSI. This it failed to do. We do not believe that the legislature in enacting
Venue
In its final issue, Elite contends that venue was not proper in this case. However, Elite has failed to properly preserve this argument. To preserve a complaint for appellate review, the record must show that the complaint was made to the district court by a timely motion and that the district court ruled or refused to rule on the motion.
See
CONCLUSION
Having disposed of all of the issues before us, we affirm the district court’s judgment.
Notes
. LSI also sued Keshia L. Eubanks and David M. Laney, Commissioner of the Texas Department of Transportation. The district court's final judgment denied any relief against them. That portion of the judgment has not been appealed.
.
See
. The security agreement was initially held by Summit Acceptance Corporation. Summit assigned its interest to First Bank of the Americas which became the lienholder and secured party under the agreement.
. Elite asserts that at the time it sent the notice, Summit Acceptance Corporation was the lien-holder of record.
. The district court's order reads:
IT IS THEREFORE, ORDERED, ADJUDGED and DECREED that Plaintiff, LSI FINANCIAL GROUP’S, Motion for Summary judgment against Defendant Elite Towing, Inc., as to liability, is GRANTED. The issue [sic] of damages and attorney's fees are reserved for determination at a later date.
. The summary-judgment proof includes, inter alia, Elite’s response to interrogatories and request for admissions submitted to it by LSI as well as the affidavits of Lissa Ruffin and Robert Ruffin. Elite stаtes that the vehicle was sold to "Robert Ruffin, Elite Wholesales,” while Ruffin avers that he individually purchased the vehicle. The receipt tendered by Elite after the sale was to "Elite Wholesales.” The specific purchaser is not material to the resolution of this appeal, and we refer to "Elite Wholesales” as the purchaser merely for convenience.
.In support of its "one notice" position, Elite directs us to
First State Bank v. Arsiaga,
.
Dob’s Tire & Auto Center
involved a
worker's
lien under section 70.001 of the Property Code, while Elite claims a
garageman's
lien as provided in
. The “lienholder’' referred to in this passage is the worker (or garageman), not the holder of a lien created by a security agreement.
. A “law enforcement agency” means the Department of Public Safety, the police department of a municipality, the pоlice department of an institution of higher education, a sheriff or a constable.
See
. Mark Armstrong is LSI’s attorney in this case, and Carl Lopez is the "Lien Seizure Specialist” and a custodian of records of LSI.
.Armstrong testified to the type and value of work he did in this case. Lopez testified about LSI's reasoning behind hiring an attorney and to the condition of the vehicle.
. Elite broadly asserts, "The affidavit of CARL LOPEZ is based on hearsay and is not competent summary judgment evidence."
. See note 7, supra.
. Scheff even acted as Mosser’s notary on the affidavit.
.
See Grissom,
. “Lienholder” in this instance refers to the party holding a lien under a security agreement and not a lien created by a statute.
. See pp. 639-40, supra.