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 claim exclusive of each other, incompatible)
Houston's First Court of Appeals, in panel opinion by Justice Sam Nuchia, concludes that
the deemed admissions and affidavits supply conclusive proof of the elements of Unifund’s
cause of action based on an assigned credit card debt against the defendant card holder.
AFFIRM TC JUDGMENT: Opinion by Justice Nuchia  
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  

[Note: bold-facing of key terms and hyperlinks were added; see pdf version of opinion on court's web site]

Appellant, Sara Morgan Gellatly, appeals the trial court’s summary judgment in favor of appellee, Unifund CCR
Partners (“Unifund”). We affirm.


As successor-in-interest to Citibank (South Dakota), Unifund sued Gellatly for money allegedly owing on an
unpaid credit card account. Unifund asserted causes of action for “
suit on open & stated account/debt” and, in
the alternative, “
quantum meruit/unjust enrichment.”

In its original petition, Unifund served Gellatly with twenty-nine requests for admission and requests for disclosure.
The requested admissions stated that Gellatly: (1) opened a credit card account with Unifund’s predecessor-in-
interest, (2) made payments and received monthly account statements, (3) never disputed the charges or sought
verification, (4) owed Unifund a certain sum of money plus prejudgment interest, and (5) contractually agreed to
an interest rate of 28.74%. Specifically, request for admission number 11 stated, “Defendant presently owes
Plaintiff the amount of $17,842.72, along with pre-judgment interest.” Request for admission number 12 stated,
“The attached statement accurately states the amount of money that Defendant owes to Plaintiff on the account.”
Request for admission number 14 stated, “Defendant’s breach has damaged Plaintiff in the amount of $17,482.72.”
Two documents were attached to the original petition: (1) a document entitled, “
Unifund Statement,” and (2) an
affidavit of indebtedness, sworn to by
Kim Kenney, Unifund’s media supervisor. The Unifund Statement, which
was referenced in request for admission number 12, showed a balance of $31,442.47 on Gellatly’s account.
Kenney’s affidavit states:

The defendant is not in any branch of the military.

There is due and payable from SARA M. GELLATLY, Account Number 5424180427984106, the amount of
$31442.47 (principal balance in the amount of $17482.72 plus interest up through 01/19/2006 in the amount of
$13959.75). By the terms of the agreement between the defendant and the original creditor, interest is accruing
from the aforesaid date at the rate of 28.74 percent per annum. This balance reflects any payments, credits or
offsets made since the account was charged off.

Citibank (South Dakota) National Association’s account was issued under the name of Citibank. Unifund CCR
Partners purchased this account from Citibank (South Dakota) National Association.

Gellatly filed a general denial, and she specifically denied that Unifund had made a sworn account claim. The
record shows no responses to Unifund’s requests  for admissions and disclosures on file.

Unifund filed a motion for summary judgment and an amended petition.

Unifund attached the following documents to its motion for summary judgment:

(1) the affidavit of
Joseph Lutz, a record specialist for Unifund, who offered testimony to prove that the account
statements were business records; (2) account statements; and (3) a photocopy of a credit card agreement, and
(4) an affidavit from Unifund’s attorney regarding attorney’s fees. The attached credit card agreement recited
standard terms and conditions. In addition, Unifund argued, “The deemed admissions establish that Defendant
entered into an agreement with Plaintiff/Plaintiff’s predecessor in interest, that Defendant received the credit, that
Plaintiff/Plaintiff’s predecessor in interest extended credit to Defendant, and that Defendant made payments less
than the total of the purchases.”

Gellatly responded to Unifund’s motion for summary judgment and filed a counter-motion for summary judgment.
Gellatly argued that Unifund lacked standing to sue, stating, “The party asserting that a debt is due to it by virtue
of an assignment must prove that the debt was in fact assigned to it.” She also argued that: (1) suit on a credit
card account cannot be brought as a suit on a sworn account and Unifund must produce evidence of the
assignment from Citibank; (2) Unifund’s quantum meruit claim must fail because Unifund produced no evidence
that it provided Gellatly with materials or services; (3) Unifund had not produced evidence of a valid contract; (4)
the Lutz business records affidavit did not meet the predicate for the hearsay exception because Lutz is not a
person with knowledge from the original lender; (5) the “affidavits attached to the original Petition and to the
Motion for Summary Judgment are not made by someone with the knowledge of the records of CITIBANK but
rather an employee of UNIFUND CCR partners, a debt buyer and collector.”

In response, Unifund argued that the cardmember agreement and account statements showed the existence of a
valid contract, because the cardmember agreement stated, under “Acceptance of Agreement,” that “the use of
your Account or a Card, by you or an Authorized User, or your failure to cancel your Account within 30 days after
receiving a Card, means you accept this agreement.”

The trial court granted Unifund’s motion for summary judgment, awarding $31,442.47 plus $7,861.00 attorney’s
fees, $7,861.00 if Gellatly unsuccessfully appeals, 28.74% prejudgment interest, 18% post-judgment interest on
the principal amount, and 8.25% interest on attorney’s fees. The order also stated, “All relief not expressly granted
herein is denied.”

Gellatly filed a motion for new trial and objections to affidavits. She reurged her hearsay and lack of personal
knowledge objections to the Lutz affidavit, and elaborated on those arguments. In addition, she objected to the
Lutz affidavit on the grounds that it lacked foundation in multiple ways and was conclusory. She reurged her lack
of personal knowledge objection to the Kenney affidavit, and she objected to it as conclusory, hearsay, and based
on lack of foundation and authentication. The trial court denied Gellatly’s motion for new trial and expressly
overruled her objections to the Lutz and Kenney affidavits.

On appeal, Gellatly argues that the court erred in overruling her objections to the Lutz and Kenney affidavits and
by granting summary judgment in favor of Unifund. Specifically, she again argues that the Lutz and Kenney
affidavits are not based on personal knowledge, are hearsay, and are conclusory. She also argues that

(1) summary judgment was not merited under any of Unifund’s asserted causes of action (open account, stated
account, breach of contract, or quantum meruit) and (2) Unifund lacks standing and has produced no evidence
that it owns her account.

Unifund argues that Gellatly’s objectionsto the Lutz and Kenneyaffidavits are waived because she did not raise
them in the trial court before the court’s rendition of summary judgment and that summary judgment was properly
granted on either an open account or a quantum meruit theory.


We review de novo a trial court’s granting of a motion for summary judgment. Provident Life & Accident Ins. Co. v.
Knott, 128 S.W.3d 211, 215 (Tex. 2003). Summary judgment is properly granted when the movant establishes that
there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. TEX. R. CIV. P.
166a(c) (“The judgment sought shall be rendered forthwith if (i) the deposition transcripts, interrogatory answers,
and other discovery responses referenced or set forth in the motion or response, and (ii) the pleadings,
admissions, affidavits, [and] stipulations of the parties . . . on file at the time of the hearing . . . show that, except as
to the amount of damages, there is no genuine issue as to any material fact and the moving party is entitled to
judgment as a matter of law . . . .”); Knott, 128 S.W.3d at 215–16. The movant must establish that it is entitled to
summary judgment as a matter of law on each element of its cause of action. Rhone-Poulenc, Inc. v. Steel, 997 S.
W.2d 217, 223 (Tex. 1999).

If the movant conclusively establishes its cause of action, the burden shifts to the nonmovant to respond with
evidence raising a genuine issue of material fact that would preclude summary judgment. Id. at 222–23. However,
a nonmovant is not required to respond with evidence if deficiencies in the movant’s own proof or legal theories will
defeat the movant’s right to judgment as a matter of law. See City of Houston v. Clear Creek Basin Authority, 589
S.W.2d 671, 678 (Tex. 1979).

In deciding whether there is a disputed material fact precluding summary judgment, evidence favorable to the
nonmovant will be taken as true, every reasonable inference must be indulged in favor of the nonmovant, and any
doubts must be resolved in favor of the nonmovant. Knott, 128 S.W.3d at 215. When, as here, the trial court does
not state the basis for its decision in its summary judgment order, we must uphold the order if any of the theories
advanced is meritorious. Id. at 216. Here, Unifund sought summary judgment on its “suit on open & stated
account/debt” and quantum meruit theories, and we will address each in turn.


Although termed “suit on open & stated account/debt,” the petition alleges a cause of action for breach of
contract, and Unifund’s motion for summary judgment also seeks recovery for breach of contract.1

Therefore, to be entitled to summary judgment on its breach of contract claim, Unifund was required to prove, as a
matter of law, the following essential elements: (1) the existence of a valid contract; (2) performance or tendered
performance by the plaintiff; (3) breach of the contract by the defendant; (4) damages sustained as a result of the
breach. Winchek v. American Exp. Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.—Houston [1st
Dist.] 2007, no pet.).

In support of its motion for summary judgment, Unifund offered: (1) the Kenney affidavit and attached Unifund
statement, both of which were attached to Unifund’s original petition and on file when the motion for summary
judgment was heard; (2) the Lutz affidavit and attached copies of account statements and the credit card
agreement; and (3) an affidavit from Anh Regent as to attorney’s fees, which was not challenged in the trial court.

1 Gellatly argues that Unifund is not entitled to recover as on a sworn account. We agree. 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.).

Lutz & Kenney Affidavits

Form Objections

Unifund argues that Gellatly waived her objections to the Lutz and Kenney affidavits by failing to object to them in
the trial court.

“To constitute competent summary judgment evidence, affidavits must be made on personal knowledge, set forth
facts as would be admissible in evidence and show affirmatively that the affiant is competent to testify to matters
stated therein.” TEX. R. CIV. P. 166a(f). “A trial court can only consider pleadings and proof on file at the time of
the hearing, or filed after the hearing and before judgment with the permission of the court.” Hussong v. Schwan’s
Sales Enterprises, Inc., 896 S.W.2d 320, 323 (Tex. App.—Houston [1st Dist.] 1995, no writ).

A party must object in writing and obtain an express or implied ruling from the trial court to preserve a complaint
about the form of summary judgment evidence. TEX. R. CIV. P. 166a(f); TEX. R. APP. P. 33.1(a)(2)(A); Grand
Prairie I.S.D. v. Vaughan, 792 S.W.2d 944, 945 (Tex. 1990); Rizkallah v. Conner, 952 S.W.2d 580, 587 (Tex. App.
—Houston [1st Dist.] 1997, no writ). “A trial court’s ruling on an objection to summary judgment evidence is not
implicit in its ruling on the motion for summary judgment.” Delfino v. Perry Homes, 223 S.W.3d 32, 35 (Tex. App.—
Houston [1st Dist.] 2007, no pet.) (quoting Well Solutions,Inc. v. Stafford, 32 S.W.3d 313, 317 (Tex. App.—San
Antonio 2000, no pet.)).

However, an objection that an affidavit states only a legal conclusion is an objection to a substantive defect, which
may be raised for the first time on appeal. Green v. Indust. Speciality Contractors, Inc., 1 S.W.3d 126, 130 (Tex.
App.—Houston [1st Dist.] 1999, no pet.); Rizkallah, 952 S.W.2d at 587.

In response to Unifund’s motion for summary judgment, Gellatly objected to the Lutz affidavit on hearsay grounds
and to both the Lutz and Kenney affidavits based on lack of personal knowledge. Specifically, Gellatly argues that,
as Unifund’s custodian of the records, Lutz cannot testify about the creation of business records that predate
Unifund’s acquisition of them. She also argues, “Kenney does not recite that the affidavit is made on personal
knowledge.” These are objections as to form. See Vaughn, 792 S.W.2d at 945 (holding that failure to affirmatively
show that affiant had personal knowledge is defect in form and must be preserved in trial court); see also Green, 1
S.W.3d at 130 (“An objection that an affidavit contains statements of opinion or hearsay is an objection to the form
of the affidavit.”). Nothing in the record shows that the trial court ruled on Gellatly’s objections before rendering
judgment. Therefore, her form objections regarding the Lutz and Kenney affidavits are waived. We will, however,
consider Gellatly’s arguments that the affidavits are conclusory.

Substantive Objections

Gellatly argues that the trial court erred by admitting the Lutz and Kenney affidavits because they are conclusory.
In his “business-records” affidavit, Lutz testified that he was one of the records custodians for Unifund. Similarly,
Kenney testified that she was a media supervisor for Unifund. Gellatly generally argues that each affidavit is
“nothing more than a series of conclusions,” without identifying any statements in the affidavits that she contends
are legal conclusions.

Conclusory statements in an affidavit are not proper summary judgment proof. Rizkallah, 952 S.W.2d at 587. “A
conclusory statement is one that does not provide the underlying facts to support the conclusion.” Id. “Conclusory
statements without factual support are not credible and are not susceptible tobeing readily controverted.” Id.; See
TEX.R. CIV. P. 166a(c).

Contrary to Gellatly’s assertions, the affidavits are not conclusory. Lutz’s affidavit was based on personal
knowledge derived from his work at Unifund. Lutz’s affidavit specifically states, “I have personal knowledge of the
facts stated, and they are all true and correct.” We have held “business records” affidavits such as Lutz’s to be
competent summary judgment evidence. E.g. Winchek, 232 S.W.3d at 206 (holding that business records affidavit
made by custodian of records not conclusory). Kenney’s affidavit states that she is the media supervisor for
Unifund and “authorized to make the statements and representations herein.” Kenney’s affidavit is a series of
factual statements, asserting such facts as Gellatly’s name, account number, the amount of principal balance and
interest owing on Gellatly’s account, and the contractual interest rate.

We conclude that the Lutz and Kenney affidavits are not conclusory and that the trial court did not err in
considering them.

Deemed Admissions

If a party fails to timely serve a response to a request for admissions, the requests are deemed admitted without a
court order. TEX. R. CIV. P. 198.2(c). A matter admitted this way is conclusively established as to the party making
the admission unless the court permits the party to withdraw or amend the admission. TEX. R. CIV. P. 198.3.
Deemed admissions are competent summary judgment evidence. Schafer v. Federal Servs. Corp., 875 S.W.2d
455, 457 (Tex. App.—Houston [1st Dist.]1994, no writ) (holding that trial court was free to consider deemed
admissions, although not specifically referenced in motion for summary judgment); TEX. R. CIV. P. 166a(c).

Here, Unifund served Gellatly with requests for admission with its original petition, on December 14, 2006. Unifund
filed its motion for summary judgment on April 5, 2007, at which point no response to its requests for admissions
was on file. Because no response was timely filed, the requests for admissions were deemed admitted. See TEX.
R. CIV. P. 198.2. However, Unifund did argue to the trial court that these deemed admissions provided some
summary judgment evidence in its favor. Specifically, Unifund argued:

Plaintiff’s summary judgment evidence establishes that Defendant was given an extension of credit by Plaintiff’s
predecessor in interest, to purchase goods. The deemed admissions establish that Defendant entered into an
agreement with Plaintiff/Plaintiff’s predecessor in interest, that Defendant received the credit, that Plaintiff/Plaintiff’s
predecessor in interest extended credit to Defendant,and that Defendant made payments less than the total of the

The deemed admissions establish: (1) the existence of a contract between Gellatly and Unifund’s predecessor in
interest; (2) that Unifund’s predecessor in interest performed on the contract; (3) that Unifund now owns the debt;
(4) that Gellatly breached the contract by failing to make payments; and (5) that Unifund’s predecessor in interest
and, therefore, Unifund were damaged by Gellatly’s failure to pay. Gellatly presents no argument regarding the
deemed admissions on appeal. The deemed admissions supply conclusive proof of the elements of Unifund’s
breach-ofcontract cause of action. 2 See TEX. R. CIV. P. 198.2; see Overstreet v. Home Indemnity Co., 669 S.W.
2d 825, 827–28 (Tex. App.—Dallas 1984) rev’d on other grounds by 678 S.W.2d 916 (Tex. 1984) (holding that
deemed admissions established right to summary judgment as matter of law.).

We hold that the deemed admissions and affidavits supply conclusive proof of the elements of Unifund’s cause of
action. We overrule Gellatly’s sole issue.

2 The deemed admissions also supply conclusive proof of Unifund’s standing to sue, as the owner of the account. In addition,
Unifund sued on an
alternate theory of quantum meruit. Because the deemed admissions conclusively prove the existence of a
contract, quantum meruit is not available as a theory of recovery. Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000)
(holding that because party to contract bound by express agreement, quantum meruit not available where express contract proven).


We affirm the judgment of the trial court.

Sam Nuchia Justice

Panel consists of Justices Nuchia, Alcala, and Hanks.