2900 Smith, Ltd. v. Costellation Newenergy, Inc. (Tex.App.- Houston [1st
Dist.] Jul. 21, 2009)(Anderson) (sworn account, electricity service, notice of higher rate by new
provider disputed, sufficiency challenge on appeal, findings of fact and conclusions of law, abatement for
new judge to provide findings)
AFFIRMED: Opinion by Justice Anderson
Before Chief Justice Hedges, Justices Anderson and Seymore
14-08-00061-CV 2900 Smith, Limited and Katie Pham v. Constellation Newenergy, Inc.
Appeal from 190th District Court of Harris County
Trial Court Judge: Jennifer Elrod Walker
M E M O R A N D U M O P I N I O N
Appellants, 2900 Smith Limited (“2900 Smith") and Katie Pham, appeal from a judgment entered
following a bench trial of a suit on a sworn account.
We affirm.
Factual and Procedural Background
Prior to July 21, 2005, 2900 Smith had an electricity services contract with Azor Energy, L.P. On or
about July 21, 2005, Azor Energy ceased doing business in the State of Texas. As a result, the Electric
Reliability Council of Texas (“ERCOT") assigned 2900 Smith to appellee, Constellation NewEnergy, Inc.,
as the Provider of Last Resort (“POLR"). As the POLR, appellee was authorized to charge appellants a
much higher rate for electricity than appellants had been paying to Azor Energy.[1] Because appellee
was the POLR, it was required by state regulation to notify appellants not only that appellants' electricity
service had been transferred to appellee, but also had to inform appellant of all charges appellant would
now be responsible for paying.
A dispute arose over the amount 2900 Smith owed appellee for electricity.[2] Appellants argued
appellee had not provided the required notice of the transition and therefore was overcharging 2900
Smith. When efforts to resolve the dispute failed, appellee filed a suit on a sworn account against
appellants. In that suit, appellee sought recovery of the amount allegedly owed for electricity appellants
received between July 21, 2005 and February 1, 2006, a period of time covering seven billing cycles.
Once appellee agreed to reduce the billing rate on the first five billing cycles to the Azor Energy rate, the
only remaining dispute at trial was the amount owed for the final two billing cycles: December 2005 and
January 2006. According to appellee, appellants owed $24,833.40 for those two months of electricity
service.[3] Appellants, while not contesting actual receipt of the electricity, denied owing the amount
sought by appellee. In support of their argument, appellants argued they never received appropriate
notice of the charges they would be responsible for paying as a result of receiving electricity from
appellee.
The trial took place on September 12, 2007 before Judge Jennifer Elrod of the 190th District Court.
Vashti Padmore, an employee of appellee, was the first witness to testify. Ms. Padmore testified it was
appellee's standard practice to mail a batch notice to all customers assigned to appellee as the POLR,
however, she was unable to produce a copy of such a letter sent to 2900 Smith. She also testified that
when appellee had not heard any response from 2900 Smith, she initially contacted 2900 Smith with a
telephone call on October 13, 2005. According to Ms. Padmore, she spoke to a person named Anna
and informed Anna that ERCOT had assigned appellee as 2900 Smith's electricity provider and of the
charges 2900 Smith would have to pay. During this conversation, because 2900 Smith revealed they
were not aware of their POLR status, Ms. Padmore agreed to match the rate 2900 Smith had been
paying to Azor Energy through the November 2005 billing cycle.
Next, James McGrew, another employee of appellee, testified. In addition to other matters, McGrew
testified regarding the regulations controlling POLR pricing. He then testified that the POLR pricing was
correctly applied to 2900 Smith's December 2005 and January 2006 bills and that 2900 Smith's total
outstanding balance for the seven billing cycles was $33,792.60.[4] During cross-examination, McGrew
explained how appellee arrived at the amount due for the December billing cycle. According to McGrew
this billing cycle ran from November 30, 2005 through January 3, 2006, a longer than normal billing
cycle of 35 days. McGrew also testified that a new, higher, Price to Beat went into effect on December
16, 2005. Therefore, because there were 18 days on the new, higher billing rate, and only 17 at the old
rate, appellee billed 2900 Smith at the higher rate for the entire billing cycle. McGrew did not testify as to
what the earlier Price to Beat was that was replaced on December 16, 2005.
Following the testimony of appellee's attorney regarding her legal fees, Pham testified she did not
receive notice of the switch to appellee until sometime in October, 2005. Finally, Pham testified she
could not recall if she received notice of the rates appellee would be charging.
After the parties had rested, the trial court instructed appellee to re-bill the December invoice at the
lower Azor Energy rate reducing the amount owed by 2900 Smith to $27,885.42. The trial court signed a
judgment in that amount on October 15, 2007.[5] On October 22, 2007, appellants filed a Request for
Findings of Fact and Conclusions of Law with the trial court. On November 16, 2007, appellants filed a
Notice of Past Due Findings of Fact and Conclusions of Law. Appellee filed its own Notice of Past Due
Findings of Fact and Conclusions of Law three days later. On October 4, 2007, Judge Elrod was
confirmed to the U.S. Court of Appeals for the Fifth Circuit and left the bench of the 190th District Court
on a date not disclosed in the appellate record before entering the timely requested Findings of Fact
and Conclusions of Law. Appellants then appealed to this court. Among their issues was the complaint
that the trial court's failure to enter Findings of Fact and Conclusions of Law hampered their ability to
properly present their appeal. We abated the appeal and ordered the new judge of the 190th District
Court to enter Findings of Fact and Conclusions of Law. The Findings of Fact and Conclusions of Law
were filed with this court on June 2, 2009 and we reinstated the appeal.
Discussion
A. Is the Trial Court's Judgment Supported By Sufficient Evidence?
Appellants raise a single issue in this appeal.[6] In their one remaining issue, appellants contend the
evidence is insufficient to support the judgment. Appellants do not specify whether they challenge the
legal sufficiency of the evidence, the factual sufficiency, or both. Liberally construing their brief as we
must, we construe appellants' third issue as challenging both the legal and factual sufficiency of the
evidence supporting the judgment.
1. The Standard of Review
When both legal and factual sufficiency challenges are raised on appeal, we must first examine the legal
sufficiency of the evidence. City of Houston v. Cotton, 171 S.W.3d 541, 546 (Tex. App.- Houston [14th
Dist.] 2005, pet. denied). In conducting a legal sufficiency review, we must consider the evidence in the
light most favorable to the appealed order and indulge every reasonable inference that supports it. City
of Keller v. Wilson, 168 S.W.3d 802, 821-22 (Tex. 2005); Harris County v. Vernagallo, 181 S.W.3d 17,
24 (Tex. App.- Houston [14th Dist.] 2005, pet. denied); Prairie View A & M Univ. v. Brooks, 180 S.W.3d
694, 705 (Tex. App.- Houston [14th Dist.] 2005, no pet.). The evidence is legally sufficient if it would
enable reasonable and fair-minded people to reach the decision under review. Keller, 168 S.W.3d at
827B28; Vernagallo, 181 S.W.3d at 24; Brooks, 180 S.W.3d at 705. This court must credit favorable
evidence if a reasonable trier of fact could, and disregard contrary evidence unless a reasonable trier of
fact could not. Keller, 168 S.W.3d at 827; Vernagallo, 181 S.W.3d at 24; Brooks, 180 S.W.3d at 705.
The trier of fact is the sole judge of the witnesses' credibility and the weight to be given their testimony.
Keller, 168 S.W.3d at 819; Vernagallo, 181 S.W.3d at 24; Brooks, 180 S.W.3d at 705.
This court may sustain a legal sufficiency, or no evidence, point only if the record reveals one of the
following: (1) the complete absence 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 scintilla; or (4) the evidence established conclusively the opposite of the vital
fact. Keller, 168 S.W.3d at 810; Brooks, 180 S.W.3d at 705. When the evidence offered to prove a vital
fact is so weak as to do no more than create a mere surmise or suspicion of its existence, the evidence
is less than a scintilla and, in legal effect, is no evidence. See Ford Motor Co. v. Ridgway, 135 S.W.3d
598, 601 (Tex. 2004).
In reviewing factual sufficiency, we must examine the entire record, considering both the evidence in
favor of, and contrary to, the challenged findings. See Maritime Overseas Corp. v. Ellis, 971 S.W.2d
402, 406-07 (Tex. 1998); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). We may set aside the verdict
for factual sufficiency only if it is so contrary to the overwhelming weight of the evidence as to be clearly
wrong and unjust. See Ellis, 971 S.W.2d at 407; Nip v. Checkpoint Systems, Inc., 154 S.W.3d 767, 769
(Tex. App.- Houston [14th Dist.] 2004, no pet.). The amount of evidence necessary to affirm a judgment
is far less than the amount necessary to reverse a judgment. GTE Mobilnet of S. Tex. v. Pascouet, 61 S.
W.3d 599, 616 (Tex. App.- Houston [14th Dist.] 2001, pet. denied). We are not a fact finder. Mar.
Overseas Corp. v. Ellis, 971 S.W.2d 402, 407 (Tex. 1998). Accordingly, we may not pass upon the
witnesses' credibility or substitute our judgment for that of the jury, even if the evidence would support a
different result. Id. If we determine the evidence is factually insufficient, we must detail the evidence
relevant to the issue and state in what regard the contrary evidence greatly outweighs the evidence in
support of the verdict; we need not do so when affirming a jury's verdict. Gonzalez v. McAllen Med. Ctr.,
Inc., 195 S.W.3d 680, 681 (Tex. 2006) (per curiam).
2. The Evidence is Legally and Factually Sufficient
Appellants' argument that the evidence is insufficient to support the trial court's judgment begins with the
assertion that the only evidence in the record as to a possible date appellants received notice of
appellee's higher POLR charges was the October 13, 2005 telephone call made by Ms. Padmore.
Appellants then contend the trial court must not have accepted Ms. Padmore's testimony regarding
notice as credible because, in appellants' view, lack of notice of the new rates is the only possible
explanation for the trial court's decision to award the lower Azor Energy rate for the December invoice.
Appellants then conclude that since (1) the trial court disbelieved Ms. Padmore's testimony regarding
notice of appellee's charges, and (2) there was no other evidence in the record establishing notice to
appellants of those charges, then the trial court's judgment should have also lowered the January
invoice to the Azor Energy rate as well. We disagree that, under the appropriate standard of review, the
evidence is insufficient to support the trial court's judgment.
Here, it was uncontested 2900 Smith received electricity provided by appellee from July 21, 2005 until
February 1, 2006. There was undisputed evidence that Ms. Padmore notified appellants that appellee
was providing electricity to 2900 Smith as the POLR in an October 13, 2005 telephone call. There was
also undisputed evidence appellee agreed to charge 2900 Smith the lower Azor Energy rate through the
November 30, 2005 billing cycle. In addition, there was evidence that, prior to making the December 28,
2005 partial payment, appellants received appellee's billing rates. The evidence also indicated the next
full billing cycle following December 28, 2005, the latest date appellants could have received notice of
appellee's billing rates, was the final billing cycle from January 3, 2006 through February 1, 2006.
The evidence summarized above, when viewed in a light favorable to the trial court's decision, is legally
sufficient evidence to support the trial court's judgment in this case. In addition, after examining all of the
evidence, the trial court's judgment is not so contrary to the evidence as to be clearly wrong and unjust.
Therefore, the evidence is factually sufficient. We overrule appellants' single remaining issue on appeal.
Conclusion
Having overruled appellants' only remaining issue on appeal, we affirm the trial court's judgment.
/s/ John S. Anderson
Justice
Panel consists of Chief Justice Hedges and Justices Anderson and Seymore.
[1] As the POLR, appellee was authorized to charge 125% of the published Price to Beat. 27 Tex. Reg.
8428 (2002) (formerly 16 Tex. Administrative Code § 25.43(k)(4)(A)).
[2] The Azor Energy electricity contract was with 2900 Smith. In its original petition, appellee alleged
2900 Smith is a forfeited Texas limited partnership, however there is no evidence in the record
establishing that allegation. In addition, while Katie Pham was not a party to the Azor Energy contract,
she was listed as the recipient of electricity.
[3] According to appellee, 2900 Smith owed $12,900.03 for December, 2005 and $11,933.60 for
January, 2006.
[4] Appellee arrived at this amount after adjusting the billing rate for the first five billing cycles to the
lower Azor Energy rate and crediting a $14,000 partial payment made by 2900 Smith in December, 2005.
[5] The trial court also awarded appellee $10,000 in attorney's fees as well as interest and costs of
court. Appellants do not challenge the amount of the attorney's fees in this appeal.
[6] Appellants actually asserted three issues on appeal, however, two addressed the trial court's failure
to enter the timely requested Findings of Fact and Conclusions of Law. Those issues are now moot and
we need not address them. Tex. R. App. P. 47.1.