Resurgence Financial, LLC v. Lawrence
(Tex.App.- Houston [1st Dist.] Oct. 8, 2009)(Radack)
credit card debt suit not properly brought and litigated as sworn account suit under Rule 185,
amount of damages not proven)
Chief Justice Radack   
Before Chief Justice Radack, Justices Bland and Massengale
01-08-00341-CV  Resurgence Financial, L.L.C. v. James T. Lawrence   
Appeal from County Civil Court at Law No 2 of Harris County
Trial Court Judge:
Hon. Jacqueline Lucci Smith


After a bench trial, the trial court rendered a take-nothing judgment against appellant,
Resurgence Financial, L.L.C. ("Resurgence"), in its suit against appellee, James T. Lawrence,
individually and d/b/a Gulf States Communications, Inc. ("Lawrence"), to collect unpaid
credit-card debt.

In its sole issue, Resurgence contends that the trial court erred in doing so because its suit
was properly brought as a suit on account under Texas Rule of Civil Procedure 185. See Tex.
R. Civ. P. 185.

We affirm.


Resurgence sued appellee Lawrence for the balance due on a credit-card account that it
alleged had been acquired from Wells Fargo Bank. Resurgence alleged claims for breach of
contract and for quantum meruit. Resurgence attached to its petition the affidavit of John H.
Over, Resurgence's "designated agent." The affidavit tracked the requirements of Rule 185 for
a suit on account and attached a one-page "statement of account," but not the credit-card
contract. Lawrence answered with an unsworn general denial, which also asserted that a
plaintiff seeking recovery of credit-card debt was "not entitled to proceed on a sworn account
theory," i.e., that such suits were not those for which the procedures of Rule 185 were

The case was tried to the court. The trial court admitted into evidence Lawrence's answer and
his responses to requests for disclosure and requests for admissions, in the last of which he
admitted to "breach[ing] the contract made a basis of" Resurgence's petition, but not to the
amount due and owing or to the interest rate. The court excluded, however, a "business
records affidavit and business records," which were records from Wells Fargo Bank
concerning the account. Resurgence declined the trial court's offer for it to nonsuit to "redo the
affidavit," indicating that it would prefer to proceed to trial, and offered no further evidence.
After the trial court had taken judicial notice of its file, it announced "judgment for the
defendant" because Lawrence's admissions were not sufficient to prove up the amount owed.

The trial court rendered a take-nothing judgment against Resurgence and signed findings of
fact and conclusions of law, which included the following:

a finding that the only evidence admitted (the answer and discovery responses) did not
establish the amount of damages;

a finding and conclusion that the court properly denied admission of Resurgence's business
records affidavit and attachments;

a conclusion that "the credit card account at issue was not subject to a sworn account theory
under Rule 185"; and

a conclusion that "[g]iven the absence of any presumption under [Texas Rule of Civil
Procedure] 93(10) and the sustaining of the objection to the affidavit . . . and related
documents, Plaintiff presented no admissible evidence as to the amount of its damages."

The trial court denied Resurgence's motion for new trial.


In its sole issue, Resurgence contends that the trial court erred in rendering a take-nothing
judgment, asserting that because appellee did not file a verified denial, it was entitled to
judgment based on Rule 185.

A. Standard of Review

When, as here, the only issue under review involves a pure question of law, the standard of
review is de novo. In re Humphreys, 880 S.W.2d 402, 404 (Tex. 1994); City of Pasadena v.
Gennedy, 125 S.W.3d 687, 691 (Tex. App.--Houston [1st Dist.] 2003, pet. denied).

B. Applicable Law

Rule 185 provides:

When any action or defense is founded upon an open account or other claim for goods, wares
and merchandise, including any claim for a liquidated money demand based upon written
contract or founded on business dealings between the parties, or is for personal service
rendered, or labor done or labor or materials furnished, on which a systematic record has
been kept, and is supported by the affidavit of the party, his agent or attorney taken before
some officer authorized to administer oaths, to the effect that such claim is, within the
knowledge of the affiant, just and true, that it is due, and that all just and lawful offsets,
payments and credits have been allowed, the same shall be taken as prima facie evidence
thereof, unless the party resisting such claim shall file a written denial, under oath. A party
resisting such a sworn claim shall comply with the rules of pleading as are required in any
other kind of suit, provided, however, that if he does not timely file a written denial, under oath,
he shall not be permitted to deny the claim, or any item therein, as the case may be. No
particularization or description of the nature of the component parts of the account or claim is
necessary unless the trial court sustains special exceptions to the pleadings.

Tex. R. Civ. P. 185 (emphasis added). "Rule 185 is a procedural tool that limits the evidence
necessary to establish a prima facie right to recovery on certain types of accounts."
Williams v.
Unifund CCR Partners, 264 S.W.3d 231, 234 (Tex. App.--Houston [1st Dist.] 2008, no pet.).

C. Analysis

Five courts of appeals, including this Court, have held that suits for collection of credit-card
debt, when the card's issuer is not also the provider of the purchased goods or services, are
not suits on account under Rule 185. See, e.g., id. at 234-35. A sixth court of appeals has
noted the same rule. See Dulong v. Citibank (South Dakota), N.A., 261 S.W.3d 890, 893 n.3
(Tex. App.--Dallas 2008, no pet.) (noting that suit on sworn account is not proper for
credit-card collection suit). In Williams, we reasoned that "[r]ule 185 applies only 'to
transactions between persons, in which there is a sale upon one side and a purchase upon
the other, whereby title to personal property passes from one to the other, and the relation of
debtor and creditor is thereby created by general course of dealing. . . .'" Williams, 264 S.W.3d
at 234 (quoting Meaders v. Biskamp, 316 S.W.2d 75, 78 (Tex. 1958)). Because "no title to
personal property passes from the bank to the cardholder," we concluded that "[a]n unpaid
bank credit card account . . . creates a cause of action for the bank's money or credit
advanced as a loan, but not for goods or services sold or delivered to the cardholder,"
rendering Rule 185 inapposite. Id. at 234-35.

Resurgence recognizes this authority, but contends that it was wrongly decided, urging us to
overrule Williams and to depart from the holdings of our sister courts of appeals. We decline to
do so. We generally do not overrule precedent absent a compelling reason, especially when,
as here, doing so would cause a split of authority between our sister court with which we
exercise concurrent appellate jurisdiction. See Howeth Investments, Inc. v. City of Hedwig
Village, 259 S.W.3d 877, 901 (Tex. App.--Houston [1 Dist.] 2008, pet. denied) (declining to
overturn 33-year-old precedent interpreting statute that would result in split with the
Fourteenth Court of Appeals, when no compelling reason existed to do so). Moreover,
abrogating this holding of Williams would put into doubt far older precedent of this Court, in
which we applied the same reasoning from Meaders to hold that a suit for breach of a lease for
realty is not covered by Rule 185. See Meineke Discount Muffler Shops, Inc. v. Coldwell
Banker Prop. Mgmt. Co., 635 S.W.2d 135, 138 (Tex. App.--Houston [1st Dist.] 1982, writ ref'd
n.r.e.); accord Schorer v. Box Serv. Co., 927 S.W.2d 132, 134-35 (Tex. App.--Houston [1st
Dist.] 1996, writ denied) (following this holding of Meineke, despite concurring opinion arguing
that Meaders did not limit Rule 185's application).

Resurgence contends that a compelling reason to overrule Williams exists. The parties agree
that the Texas Supreme Court's decision in Meaders was the ultimate source for the line of
authority concerning credit-card debt and Rule 185. Accordingly, Resurgence contends that
the common-law definition of a "sworn account" adopted in Meaders should not have been
applied to Rule 185 because the Meaders court was not interpreting Rule 185; rather, it was
interpreting an attorney's fees statute that at that time contained the term--whereas Rule 185
does not contain the term in its text, although its title at the time was "Suit on a Sworn
Account." Ignoring Meaders, Resurgence then argues that the plain language of the rule is
broad enough to cover credit-card suits. Specifically, it argues that a credit-card-collection suit
is either an "open account" or a "claim for a liquidated money demand based upon written

Resurgence ignores the language modifying these terms: the rule describes an "open account
or other claim for goods, wares and merchandise, including any claim for a liquidated money
demand based upon written contract or founded on business dealings between the parties . . .
." Tex. R. Civ. P. 185. Thus, a reading of the entire rule is not inconsistent with Meaders's
holding. Much of the authority on which Resurgence relies either considered statutes with
language materially different from that in Rule 185 (1) or did not base the holding on Rule 185.
(2) And the remaining authority on which Resurgence relies did not concern
credit-card-collection suits and has not been followed by the courts considering the rule's
application in that context. (3) We conclude that Resurgence has offered no compelling reason
to overrule Williams, to put into question Meineke or Schorer, or to depart from our sister
courts' well-established interpretation of Meaders and Rule 185. Accordingly, we overrule
Resurgence's sole issue.


We affirm the judgment of the trial court.

Sherry Radack

Chief Justice

Panel consists of Chief Justice Radack and Justices Bland and Massengale.

1. See Facility Ins. Corp. v. Employers Ins. Of Wausau, 357 F.3d 508, 513 (5th Cir. 2004) (considering term
"open account" in context of limitations statute); Livingston Ford Mercury, Inc v. Haley, 997 S.W.2d 425, 427
(Tex. App.--Beaumont 1999, no pet.) (same).

2. See
Rowlands v. Unifund CCR, No. 14-05-01122-CV, 2007 WL 1395101, at *2, 3 (Tex. App.--Houston [14th
Dist.] 2007, no pet.) ("Thus, it was not necessary for Unifund to rely upon the evidentiary effect of the pleaded
sworn account; the admissions alone established Unifund's entitlement to prevail based on Rowland's
breach of the Account Agreement."); Haley, 997 S.W.2d at 427 ("The dealership does not contend, either
below or on appeal, that the account alleged by KETX does not fall within the confines of Tex. R. Civ. P. 185.
Consequently, we do not address that issue.").

3. See Larcon Petroleum Inc. v. Autotronic Sys., Inc., 576 S.W.2d 873, 875-76 (Tex. Civ. App.--Houston [14th
Dist.] 1979, no writ); Seisdata, Inc. v. Compagnie Generale de Geophysique, 598 S.W.2d 690, 691 (Tex. Civ.
App.--Houston [14th Dist.] 1980, writ ref'd n.r.e.).