To prevail on a suit on a promissory note, a plaintiff must prove: (1) the note in question; (2) the party being sued signed the note; (3) the plaintiff is the owner or holder of the note; and (4) a certain balance is due and owing on the promissory note. See Dorsett v. Hispanic Hous. and Educ. Corp., 389 S.W.3d 609, 613 (Tex. App.-Houston [1th Dist.] 2012, no pet.). In a suit on a note, it is common for the owner or holder of the note to file a motion for summary judgment. However, simply attaching the note to the moving party’s affidavit without expressly stating the necessary elements in the affidavit can be fatal to a movant’s motion for summary judgment. Ho v. Saigon National Bank, 438 S.W.3d 871 (Tex. App.-Houston [14th Dist.] 2014, no pet.).
In Ho v. Saigon National Bank, Saigon National Bank filed suit on a promissory note executed by Thu Binh Ho (“Ho”) that subsequently went into default. Saigon National Bank filed a motion for summary judgment and included an affidavit of a bank officer. The bank officer stated that Saigon National Bank executed a loan agreement with Ho, that Ho subsequently defaulted and Saigon National Bank made demand on the amount due and owing. The bank officer also attached a copy of the note and avered that the maturity date as amended was June 21, 2015. However, the bank officer did not expressly state in the affidavit that the bank was the holder or owner of the note nor was there any documentation showing the amended nature of the note. The trial court granted summary judgment for Saigon National Bank and Ho appealed. Ho v. Saigon National Bank, 438 S.W.3d 871 (Tex. App.-Houston [14th Dist.] 2014, no pet.).
The 14th District Court of Appeals in Houston reversed and remanded the case back to the trial court holding that Saigon National Bank did not establish its entitlement to summary judgment as a matter of law because: (1) the bank failed to establish and present evidence of its current ownership of the note; (2) the affidavit testimony made reference to the note as amended but the original note did not show an amendment or different version; and held that (3) the debtor was not obligated to raise a fact issue controverting the bank’s ownership of the note. The 14th Court of Appeals held that before a burden of proof shifts to a debtor/non-movant to raise a material fact issue to defeat a bank’s summary judgment motion, the bank has to first conclusively prove all elements of its claim. The 14th Court of Appeals also clarified its prior opinion in Grace Interest LLC. v. Wallis State Bank, 431 S.W.3d 110 (Tex. App.-Houston [14th Dist.] pet. denied) which held that a party’s affidavit testimony about the legal effects of certain agreements is not conclusory when the agreements are attached. Grace Interest LLC. v. Wallis State Bank, 431 S.W.3d 110, 125 & n.5 (Tex. App.-Houston [14th Dist.] pet. denied). Saigon National Bank’s argument that a trial court may find an essential element of a cause of action when no affidavit testimony speaks to that element by making reference to an attached document was rejected. Ho v. Saigon National Bank, 438 S.W.3d 871 (Tex. App.-Houston [14th Dist.] 2014, no pet.).
The real moral of the opinion in Ho v. Saigon National Bank is to ensure that all the information needed to prove the elements of a cause of action are contained in the affidavit and any documents attached to the affidavit are consistent with the affidavit testimony. Reliance on documents attached to an affidavit and incorporated by reference without affidavit testimony may be a fatal defect. The opinions contained in this blog are solely the author’s and any comments, suggestions and replies can be sent to me at firstname.lastname@example.org.