Adrian Rafael Mejia v. Mobiloil Federal Credit Union

Citation: Not availableDocket: 09-21-00079-CV

Court: Court of Appeals of Texas; March 23, 2023; Texas; State Appellate Court

Original Court Document: View Document

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Adrian Rafael Mejia appeals a judgment from the County Court of Law No. 1 in Jefferson County, Texas, awarding Mobiloil Federal Credit Union approximately $13,772 for a loan deficiency. The judgment also includes attorney’s fees, interest, and court costs. Mejia raises two primary issues. First, he contests the trial court's grant of Mobiloil’s combined traditional and no-evidence motion for summary judgment, arguing that Mobiloil did not prove he was in default when the loan was accelerated and that there exists a genuine issue of material fact regarding his defense that Mobiloil failed to mitigate damages by not pursuing payment from his vehicle's insurer prior to selling the vehicle at auction. Second, he claims the trial court erred in overruling his objections to an affidavit from the president of Safety Adjusters, Inc., asserting that the condition of his repossessed SUV remained unchanged while in their possession, which is relevant to his claim of damage due to flooding. The court found no error in the trial court's decision to grant summary judgment, affirming the judgment in favor of Mobiloil. Background details indicate Mejia financed $39,687 for the SUV through a Retail Installment Contract with monthly payments of $683, starting from November 22, 2018. His payment history shows multiple late payments and instances of underpayment, confirming he was in default under the loan terms.

Mejia made ten loan payments before Mobiloil declared the loan in default on August 29, 2019. His December 2018 payment was over fifteen days late but did not incur a late fee. The April 2019 payment was also late, and Mejia paid less than half of the required amount that month. Although Mejia paid the May 2019 payment on time, he underpaid by approximately half. Had he made the full scheduled payments in the preceding ten months, he would have paid about $6,830, whereas he only paid $6,193 before the loan was accelerated. After Mejia did not remedy this deficiency, Mobiloil repossessed the SUV and informed him it would be sold after September 27, 2019. Mejia retrieved his belongings from the vehicle, noting it had water damage and a moldy smell. In November 2019, Mobiloil informed Mejia that the sale of the SUV yielded less than his outstanding loan balance, leaving him with a debt of $13,797 after accounting for sale proceeds and associated expenses.

In March 2020, Mobiloil sued Mejia for breaching the Retail Sales Contract, seeking the owed amount, prejudgment interest, and attorney’s fees. Mobiloil moved for summary judgment, stating Mejia defaulted and owed $13,772 plus interest as of January 3, 2020, supported by an affidavit from Mobiloil’s records custodian and relevant business records. Mejia responded but did not provide supporting evidence. He amended his answer, asserting two affirmative defenses: that Mobiloil breached the contract first and failed to mitigate damages by not notifying his GAP insurer about the vehicle's flood damage. Mejia also filed counterclaims against Mobiloil, alleging breach of contract for unilaterally changing repayment terms, negligence regarding the vehicle's protection, improper entrustment to Safety Adjusters, failure to inform the GAP insurer about flood damage, and engaging in unfair debt collection practices by charging unauthorized fees.

Mobiloil filed an amended combined motion for summary judgment, supported by various exhibits, including affidavits and the Retail Sales Contract. Four days before the hearing, Mejia responded, objecting to the affidavit of Lawrence Ray, claiming it was based on hearsay and lacked personal knowledge regarding the flood damage to his SUV. Mejia requested additional time for discovery, asserting that Mobiloil's objections hindered his ability to demonstrate potential coverage under his GAP insurance for damages incurred while his SUV was at Safety Adjusters. He argued that any payments from the GAP policy could affect the outstanding loan balance after the vehicle’s auction. Mejia also claimed that relevant discovery would support his counterclaims and defenses, including allegations of Mobiloil's breach of contract and unlawful debt collection practices. In his unsworn declaration, Mejia stated he was current on payments when his vehicle was repossessed and noted evidence of water damage upon inspecting the SUV. On January 11, 2021, the trial court heard Mobiloil’s motion, ruling that Mejia owed $13,772 under the Retail Sales Contract. The court awarded Mobiloil the claimed amount, along with attorney’s fees and interest, stating that all relief not expressly granted was denied and indicating the judgment was final. Mejia's motion for a new trial was overruled by operation of law, leading to his appeal. The standard of review for the summary judgment is de novo, affirming if any grounds are meritorious, with the focus on the arguments presented by Mejia to the trial court.

Mobiloil filed a hybrid motion for summary judgment, combining traditional and no-evidence motions. It argued that Mejia could not provide evidence for his affirmative defenses of prior material breach or for his claim regarding Mobiloil's failure to mitigate damages. Additionally, Mobiloil contended that Mejia's counterclaims, which included allegations of contract modification, negligent protection of the SUV, negligent entrustment to Safety Adjusters, and failure to communicate with his GAP insurer, were unsupported by evidence. Mobiloil also claimed there was no evidence of any unauthorized charges under the Retail Sales Contract.

In reviewing hybrid motions, the court first assesses the no-evidence portion. A no-evidence motion must specify which essential elements lack supporting evidence, shifting the burden to the defendant to raise issues of material fact. Courts must grant the motion if there is a complete absence of evidence for a vital fact, if the only evidence presented is inadmissible, if the evidence is insubstantial, or if it conclusively disproves the vital fact.

Mejia challenged the trial court's no-evidence rulings under Rule 166a(i), which requires adequate time for discovery before filing such motions. Mobiloil's case had been active for over eight months by the time of the hybrid motion, with the discovery period ending on October 11, 2020. The record shows that Mejia did not file a motion to compel Mobiloil to respond to discovery requests. As a result, the trial court was required to grant Mobiloil's motion since Mejia failed to present evidence against the challenged elements.

Mejia's response to Mobiloil's motion was filed less than seven days before the hearing and without court permission, and the trial court's judgment did not indicate whether it considered Mejia's late-filed evidence.

Mejia did not obtain permission from the trial court to file a late response to Mobiloil’s motion, nor does the record indicate that the court considered this late response when ruling on Mobiloil's hybrid motion. As a result, the court is presumed to have disregarded the evidence Mejia attached to his late response, leading to the conclusion that there was no error in granting the no-evidence portion of Mobiloil’s motion since Mejia failed to provide evidence to support his affirmative defenses and counterclaims. 

Regarding the traditional part of Mobiloil's motion concerning the breach of contract claim, Mejia contends that the affidavit from Kimler and the verified business records did not conclusively demonstrate his breach of contract. He references his unsworn declaration asserting he made all required payments; however, the court presumed this declaration was not considered. Evidence presented shows Mejia failed to make timely installment payments, including a late June 2019 payment, and he was in default when Mobiloil accelerated the loan. Mobiloil provided sufficient evidence of Mejia's breaches, which were material to the contract. Mejia did not challenge Mobiloil's proof of damages or the court’s decisions on prejudgment interest or attorney's fees.

Mejia also argued that the trial court abused its discretion by denying his request for additional time to conduct discovery. This request was part of his late response, which the court was not required to consider. Although Mejia previously indicated issues with Mobiloil’s discovery responses in an abandoned motion for summary judgment from August 2020, he did not properly address these concerns in the current context.

Mejia did not request the trial court to compel Mobiloil to respond to his discovery requests nor did he file a motion to compel regarding Mobiloil’s objections. In December 2020, Mobiloil withdrew its previous motion for summary judgment and filed a hybrid motion, which is the subject of this appeal. The court expressed skepticism that discovering the GAP policy would yield relevant evidence, noting that GAP insurance compensates for the difference between the vehicle’s total loss value and the outstanding loan balance. The evidence indicated that the sale of the SUV covered much of Mejia’s loan balance, and Mejia did not assert that the flood damages resulted in a total loss of the SUV. The discovery period for this Level 1 case ended in October 2020, and by the January 2021 hearing on Mobiloil’s hybrid motion, the period had expired. A party claiming insufficient discovery opportunity must submit an affidavit or a verified motion for continuance; Mejia did not file such a motion. Mejia also objected to an affidavit from Lawrence Ray, president of Safety Adjusters, in a late-filed response. The record does not indicate that the trial court considered this response, leading to the presumption it was not taken into account. Ray’s affidavit, which addressed only whether Mejia’s SUV was water-damaged on Safety Adjusters’ lot, was deemed irrelevant since Mejia’s supporting evidence was an unsworn declaration not considered by the court. Consequently, Mejia’s arguments were found to lack merit, and the trial court’s judgment was affirmed.