Texas Suits on Sworn Account
In Kaufman and Rockwall counties, we are experiencing a boom on the growth of business and residential population. Because of this, we are seeing more lawsuits arising out of suits on sworn accounts. You may be thinking, what is a suit on a sworn account? Well, a suit on sworn account is not actually a separate independent cause of action, but rather is a procedural tool based on Rule 185 of the Texas Rules of Civil Procedure that limits the evidence necessary to establish a right of recovery on certain types of accounts. Williams v. Unifund CCR Partners Assignee of Citibank, 264 S.W.3d 231, 234 (Tex. App.–Houston [1st Dist.] 2008, no pet.); see Tex. R. Civ. P. 185.
This means that while a suit on a basic contract may also be possible, if you meet the criteria under rule 185, you may also pursue this very valuable procedural tool. We have seen an uptick in these types of cases coming out of Rockwall and Forney, as well as Terrell, Kaufman and other surrounding areas. Most of these cases involve building materials sold by suppliers to contractors and builders. However, if you sell goods or personal services in the Rockwall, Kaufman and Dallas county areas, or you are being sued under this theory of recovery, you need to know these laws and hire competent legal representation to pursue, or defend against, these claims for you.
So, What is the Main Benefit of a Suit on Sworn Account?
The biggest distinction between a basic contract claim and a suit on sworn account is that in order to place facts in issue and avoid a summary judgment against them a defendant must rebut a sworn account with a sworn denial. Id.; Tex. R. Civ. P. 93(10); Canter v. Easley, 787 S.W.2d 72, 73 (Tex. App.–Houston [1st Dist.] 1990, writ denied). A sworn denial is where a Defendant submits along with his answer to the court an affidavit swearing to certain facts that negate the Plaintiff’s sworn account claims. The sworn denial must put facts at issue that rebut the Plaintiff’s sworn account claims. A sworn “general denial” is not sufficient to place any facts in issue to rebut a sworn account claim. See Huddleston v. Case Power & Equip. Co., 748 S.W.2d 102, 103-04 (Tex. App.–Dallas 1988, no writ) (holding that sworn general denial is insufficient). If the Defendant’s sworn denial does not place any facts in issue or is insufficient for some other reason (such as no personal knowledge, etc..) then the Defendant has still left themselves open for summary judgment.
How Do You Prove a Sworn Account Claim?
In a traditional breach of contract case, a plaintiff must prove that: (1) a valid contract existed between the plaintiff and the defendant, (2) the plaintiff tendered performance or was excused from doing so, (3) the defendant breached the terms of the contract, and (4) the plaintiff sustained damages as a result of the defendant’s breach. Viajes Gerpa, S.A. v. Fazeli, 2016 WL 7478352 at *12 (Tex. Ct. App.– Houst [14th Dist.] 2016) The petition does not have to be sworn to by the Plaintiff in order to present prima facie evidence of the contract. They simply need to prove that a contract existed by traditional means, such as through evidence and testimony. In a sworn account claim, it basically proves up the Defendant’s account with Plaintiff and that the Defendant has an amount due and owing to the Plaintiff. It essentially speeds up the Plaintiff’s process of proving up their claim. This is why it is called a procedural tool rather than a separate cause of action.
Like a breach of contract action, the Plaintiff must still prove a series of “elements” in order to prevail on a suit on sworn account. The elements a Plaintiff will have to show in order to succeed on a suit on sworn account is (1) the sale and delivery of merchandise or services rendered; (2) the amount owed is just, that is, in accordance with an agreement, or if there is no agreement, the prices are the usual, customary and reasonable prices for that good or service; and (3) the amount remains unpaid. Tanh Le v. North Cypress Medical Center Operating Company, Ltd., 2017 WL 127421 at *4, (Tex. Ct. App.– Houst. [14th Dist.], no writ). If these pleading requirements are met, and the opposing party fails to file a verified denial, the petition and affidavit are prima facie evidence of a sworn account. Tex. R. Civ. P. 185. If the Defendant has filed a verified denial, the Plaintiff merely has to prove these elements by providing various forms of evidence, such as copies of invoices, written contracts or if no written contracts then evidence of prior courses of dealing, and any other evidence that shows the court that the Defendant has breached the agreement with you and it amounts to a sworn account.
What is the Statute of Limitations on a Suit on Sworn Account?
In Texas, a four year statute of limitations applies to a breach of contract / sworn account claim. Stine v. Stewart, 80 S.W.3d 596, 592 (Tex. 2002. See also Tanh Le v. North Cypress Medical Center Operating Company, Ltd., 2017 WL 127421 at *4, (Tex. Ct. App.– Houst. [14th Dist.], no writ). A party asserting the claim must sue no more than four years after the claim accrues. Id. A breach of contract claim accrues when the contract is breached. Id. Typically, in a sworn account situation, the breach is when the defendant fails to pay the amount due. If the matter involves an open account, the plaintiff’s claim may not accrue until the cessation of dealings between the parties. See Capital One Bank (USA), N.A. v. Conti, 345 S.W.3d 490, 491 (Tex. App. – San Antonio 2011, no pet.). The elements of an open account are: (1) transactions between the parties; (2) creating a creditor-debtor relationship through the general course of dealing, (3) with the account still being open, and (4) with the expectation of further dealing. Capital One Bank (USA), N.A., 345 S.W.3d at 491. Unless an open account situation applies, a plaintiff needs to bring suit on a sworn account within four years from the failure of the defendant to pay the due account.
About Our Firm:
Here at Guest and Gray, P.C., we are an experienced litigation team serving all North Texas counties. We are the largest and highest rated law firm in Rockwall and Kaufman County. We regularly pursue and defend various civil litigation claims and personal injury claims. Our practice is quickly growing with offices now located in Dallas, Rockwall and our main office in Forney, Texas to provide convenience to our clients. We are longtime faces in our community and we love what we do. We seek to provide an air of calm and confidence for our clients during a difficult time. We believe that makes us a little bit different from everybody else, and we like it that way.
If you have supplied goods or personal services, or have been sued in Dallas, Rockwall, or Kaufman counties, or any of the surrounding areas, you need to give us a call today and schedule a free consultation.
For more information, or if you are seeking legal advice, give us a call at (972) 564-4644