COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-07-064-CV
BILLY DON GIFFORD APPELLANT
V.
DON DAVIS AUTO, INC. D/B/A APPELLEES
DON DAVIS TOYOTA AND
TOYOTA MOTOR CREDIT CORPORATION
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FROM COUNTY COURT AT LAW NO. 2 OF TARRANT COUNTY
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OPINION
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This appeal arises out of a used car purchase. The trial court granted
summary judgment against the purchaser. We affirm in part and reverse and
remand in part.
Background
On February 21, 2004, appellant Billy Don Gifford purchased a 2001
Toyota Tacoma from appellee Don Davis Auto, Inc. d/b/a Don Davis Toyota
(“Don Davis”). Don Davis used a form retail installment sales contract for this
transaction. Appellee Toyota Motor Credit Corporation (“Toyota Motor Credit”)
financed Gifford’s purchase through a separate installment contract.
The contract between Gifford and Don Davis included a charge for
$1,265.00 for an extended warranty to be provided by “Toyota C.” The
contract also contained a charge for $47.44 for a “dealer’s inventory tax paid
to seller.” Finally, the contract included a charge for $1,766.42 for credit life
and credit disability insurance. At some point after Gifford took possession of
the car, he became unable to pay. Toyota Motor Credit began collection
efforts, which culminated in repossession.
Gifford sued Don Davis and Toyota Motor Credit asserting claims against
Don Davis for fraud, violations of the Texas Finance Code and Deceptive Trade
Practices Act (“DTPA”), and breach of fiduciary duty and claims against Toyota
Motor Credit for unfair debt collection practices, wrongful repossession,
conversion, and slander of credit. Appellees filed a joint motion for summary
judgment on both traditional and no-evidence grounds. Without specifying the
basis for its ruling, the trial court granted summary judgment for Appellees.
This appeal ensued.
2
Standard of Review
We review a summary judgment de novo.1 The movant for a traditional
summary judgment has the burden of showing that there is no genuine issue of
material fact and that the movant is entitled to summary judgment as a matter
of law.2 A defendant who conclusively negates at least one essential element
of a cause of action is entitled to summary judgment on that claim.3 In deciding
whether there is a genuine issue of material fact, we take all evidence favorable
to the nonmovant as true and make all reasonable inferences in the
nonmovant’s favor. 4
A no-evidence motion for summary judgment places the burden on the
nonmovant to present summary judgment evidence raising a genuine issue of
material fact as to any challenged elements.5 If the nonmovant presents more
than a scintilla of evidence to raise a genuine issue of material fact, summary
1
… Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005).
2
… Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex.
1985).
3
… IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143
S.W.3d 794, 798 (Tex. 2004).
4
… Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997).
5
… See Tex. R. Civ. P. 166a(i); see also Espalin v. Children’s Med. Ctr.
of Dallas, 27 S.W.3d 675, 682–83 (Tex. App.—Dallas 2000, no pet.).
3
judgment should be denied.6 More than a scintilla of evidence exists when the
evidence “rises to a level that would enable reasonable and fair-minded people
to differ in their conclusions.” 7 In determining whether the nonmovant has met
this burden, we consider the evidence in the light most favorable to the
nonmovant.8
Analysis
In a single point of error, Gifford contends that the trial court erred by
granting summary judgment for Appellees on all his claims. We will consider
each claim in turn.
Fraud
Gifford alleged that Don Davis fraudulently induced him to enter into the
retail installment sales contract. Gifford’s fraud claims are predicated on two
alleged misrepresentations in the installment contract, specifically, that Don
Davis misrepresented the nature of the dealer’s inventory tax and included an
itemized charge for an extended warranty that Don Davis never provided or
intended to provide.
6
… Espalin, 27 S.W.3d at 683.
7
… Merrill Dow Pharms. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)
(citations omitted).
8
… Gen. Mills Rests., Inc. v. Tex. Wings, Inc., 12 S.W.3d 827, 833 (Tex.
App.—Dallas 2000, no pet.).
4
Fraud – Dealer’s Inventory Tax
Gifford asserts that Don Davis’s inclusion of a “dealer’s inventory tax” as
an itemized charge in the installment contract amounts to a fraudulent
misrepresentation because it misled him into thinking that a “dealer’s inventory
tax” is assessed at the time of the sale and that he, not Don Davis, owed this
“tax.” To assess this claim, we must construe Texas statutes regarding the
items that may be included as itemized charges in a motor vehicle retail
installment contract and whether the “dealer’s inventory tax” is such an item.
In Texas, sales of motor vehicles by installment contracts are subject to
the requirements in chapter 348 of the Texas Finance Code. 9 Section
348.102(a)(7) mandates that an installment contract for the sale of a motor
vehicle “must contain . . . each itemized charge.” 10 Section 348.005(2)
authorizes a retail seller of a motor vehicle to include “any taxes” as itemized
charges in the amount financed in a retail installment sales contract.11
Accordingly, if the “dealer’s inventory tax” is a tax within the meaning of “any
taxes” as used in section 348.005(2), a retail seller is authorized to include it
as an itemized charge in an installment contract.
9
… Tex. Fin. Code Ann. §§ 348.001–.518 (Vernon 2006).
10
… Id. § 348.102(a)(7).
11
… Id. § 348.005(2).
5
Subchapter B of Chapter 23 of the Texas Tax Code contains provisions
for appraisal of a dealer’s inventory for ad valorem tax purposes. 12 Section
23.121 specifies how the value of a dealer’s motor vehicle inventory is to be
calculated on January 1 of each year for assessment of ad valorem taxes on
that inventory.13 The value of a motor vehicle dealer’s inventory on January 1
is one-twelfth of the dealer’s total annual sales volume for the prior tax year. 14
The tax code requires each dealer to maintain an escrow account with the
local tax assessor-collector to accumulate funds to apply toward the dealer’s
next-year tax liability on its vehicle inventory.15 Each month the dealer deposits
an amount equal to the total unit property tax values assigned to all vehicles
sold from the dealer’s inventory in the prior month.16 The dealer assigns a unit
property tax to each vehicle at the time of sale based on the formula in sections
23.122(a)(12) and (b). 17 The unit property tax reflects the amount that the
dealer must deposit in the inventory tax escrow account for the sale of a
12
… Tex. Tax Code Ann. §§ 23.121–.124 (Vernon 2008).
13
… Id. § 23.121.
14
… Id. § 23.121(b).
15
… Id. § 23.122.
16
… Id. § 23.122(c).
17
… Id. §§ 23.122(a)(12), (b).
6
particular vehicle. 1 8 The escrowed funds are then applied as prepayment of
property taxes to be levied against the dealer’s motor vehicle inventory value
on January 1 of the subsequent year.19 The dealer may not withdraw any
funds deposited to the escrow account.20 The assessor-collector is required to
distribute all the escrowed funds to the relevant taxing units no later than
February 15.21
Gifford contends that the “vehicle inventory tax” is not a “tax” that can
be included as an itemized charge in an installment contract under section
348.005(2) of the finance code. It is instead, Gifford argues, a “deposit”
toward the dealer’s future tax liability. Accordingly, Gifford contends, by
including this deposit in the installment contract as an itemized charge for a
“dealer’s inventory tax,” Don Davis fraudulently misled him into believing that
he owed a tax when he bought the car, when in fact he did not, and that Don
Davis was going to pay that “tax” at the time of purchase, when in fact all Don
Davis did was make a deposit into an escrow account.
18
… Id. § 23.122(b).
19
… Id. § 23.122(c).
20
… Id. § 23.122(d).
21
… Id. § 23.122(k).
7
Don Davis argues in response that the dealer’s inventory tax is in fact a
tax that retail sellers are authorized to include as an itemized charge in
installment contracts and that Don Davis’s inclusion of this tax as an itemized
charge was not a misrepresentation. We agree with Don Davis.
More than one hundred years ago, the Supreme Court of Texas explained
that the Texas Constitution authorizes the legislature to provide for the manner
of assessment and payment of ad valorem property taxes and that the value of
different types of property could and probably must be assessed by different
methods:
[T]axation by a uniform rule does not necessarily demand that there
should be the same mode of assessment for every species of
property, without regard to any classification. An assessment, in
the sense of a valuation of the property of the taxpayer for the
purpose of determining the proportion of tax to be paid, should, it
is true, be uniform in its mode, to the extent that the property is
assessed according to its true value in money. But it would not
follow that different classes of property may not be valued for
taxation by different officers and boards, and by different modes
and agencies. . . .
Our Constitution, after declaring that “taxation shall be equal and
uniform,” and that property shall be taxed in proportion to its value
(evidently alluding to ad valorem taxes), adds in the same sentence:
“Which [value] shall be ascertained as may be prescribed by law.”
This would seem to leave the Legislature free to adopt the mode of
ascertaining the value of any class of property by such method as
it might deem best. If such was the intention, we think it a wise
provision. Property is so various and ascertainment of its value in
some cases is so difficult that no mode of such ascertainment
8
absolutely uniform in every respect could effect the important end
of equalizing the burden upon all property owners alike.22
Here, the legislature has chosen to assess ad valorem taxes against motor
vehicle dealer inventories by way of a prepayment based on the unit property
tax value assigned to each unit at the time of sale.23 The fact that this is how
the tax is assessed and collected does not make it any less a tax than other ad
valorem taxes.
In construing the finance and tax code provisions at issue here, we find
it significant that in 1994, shortly after the legislature promulgated what is now
section 23.122 of the tax code, the Finance Commission, the agency charged
with enforcing the finance code, approved the opinion of the Texas Consumer
Credit Commissioner that the “unit property tax value” is “encompassed in the
term ‘any taxes’ as used in [section 23.122]” and that “the unit property tax
value could be included in the cash price or shown as an itemized charge [in an
22
… Mo., Kan. & Tex. Ry. Co. of Tex. v. Shannon, 100 Tex. 379,
393–94, 100 S.W. 138, 143–44 (1907); see also State v. Wynne, 134 Tex.
455, 468–69, 133 S.W.2d 951, 958 (Tex. 1939) (“The burden of levying
taxes rests on the Legislature, and that body has [the] plenary power of
prescribing the mode of taxation to raise revenue; and the specification of
certain objects and subject of taxation in the Constitution does not prevent it
from passing laws requiring other subjects or objects to be taxed, unless
expressly prohibited by the Constitution.”).
23
… Tex. Tax Code § 23.122(c).
9
installment contract] . . . .” 24 We believe this construction is reasonable and
reflects the legislature’s intent. Accordingly, we conclude that the “unit
property tax value” is a tax pursuant to the tax code and that the finance code
authorizes dealers to include the amount of the unit property tax value for a
particular vehicle at the time of sale as an “itemized charge.”
The question remains, however, whether Gifford has raised a fact issue
as to whether Don Davis misrepresented the nature of the tax such that Gifford
was misled into believing that he, not Don Davis, owed the tax. The
installment contract included as an itemized charge an amount for a “dealer’s
inventory tax paid to seller.” Gifford provided an affidavit stating that this
language caused him to believe that he, not Don Davis, owed this tax. But
Gifford’s subjective belief about what the words “dealer’s inventory tax paid to
seller” mean is not dispositive of whether those words amounted to a
misrepresentation.
The Office of the Consumer Credit Commissioner promulgated regulations
detailing what dealers are required to include in motor vehicle installment sales
24
… 19 Tex. Reg. 655 (Jan. 24, 1994) (summary of interpretation); see
also Mid-Century Ins. Co. of Tex. v. Ademaj, 243 S.W.3d 618, 623 (Tex.
2007) (construction of statute by administrative agency charged with its
enforcement is entitled to serious consideration, so long as construction is
reasonable and does not contradict plain language of statute).
10
contract. These regulations state that such a contract must have the following
disclosures:
(4) Itemized charges not included in the cash price, as required
by Texas Finance Code, §348.102(a)(7). Itemized charges may
include, but are not limited to, the following charges as applicable:
...
(C) Dealer’s inventory tax . . . .25
The commissioner’s office has also published in the regulations a model “motor
vehicle retail installment sales contract.” 26 This model contract includes the
“[d]ealer’s inventory tax” as one of the “[o]ther charges including amounts paid
to others on [buyer’s] behalf” that must be listed in the itemization of the
amount financed.27
Don Davis’s installment contract is taken almost verbatim from the model
contract. The only modification made by Don Davis is that its contract
references a “Dealer’s Inventory Tax Paid to Seller.” [Emphasis added.] The
addition of “Paid to Seller” conveys that, unlike other itemized charges that may
be “amounts paid to others on [buyer’s] behalf,” the dealer’s inventory tax is
paid to Don Davis. Accordingly, Don Davis did not misrepresent the nature of
the dealer’s inventory tax or that Gifford was obligated to pay the tax as
25
… 7 Tex. Admin. Code § 84.804(4)(C).
26
… Id. § 84.809(b).
27
… Id.
11
anything but a charged amount payable to Don Davis. Thus, as a matter of
law, Don Davis made no misrepresentation regarding the dealer’s inventory tax,
and the trial court did not err by granting summary judgment for Don Davis on
Gifford’s fraud claim regarding the dealer’s inventory tax.
Fraud – Extended Warranty
Gifford also based a fraud claim on the itemized charge for an extended
warranty. In his affidavit, Gifford states Don Davis told him that $1,265.00
was being paid to “Toyota C.” for an extended warranty. Gifford claims that
this statement is fraudulent because, Gifford alleges, Don Davis never actually
paid “Toyota C.” for the extended warranty. Because appellees’ no-evidence
summary judgment motion asserted that there is no evidence of any
misrepresentation by Don Davis, Gifford had the burden to produce some
evidence demonstrating that Don Davis never paid “Toyota C.” for the extended
warranty.28
The only evidence Gifford presented to support his claim that “Toyota C.”
was never paid was Don Davis’s responses to Gifford’s requests for production.
Specifically, Gifford asked Don Davis to produce any documents “relating to the
amount and payment of other charges delineated in the Retail Installment Sales
28
… See Tex. R. Civ. P. 166a(i).
12
Contract including the amounts paid on behalf of purchaser.” After objecting
to this request, Don Davis answered, “None, except as previously made
available or in Plaintiff’s possession.”
Gifford asserts that this answer is some evidence that Don Davis has no
documents showing payment to “Toyota C.” for the warranty which, Gifford
argues, raises a fact issue as to whether such a payment was made. We
disagree. At most, this answer is evidence only that Don Davis has no
documents reflecting payment for the extended warranty other than those
already made available to Gifford or in Gifford’s possession. Gifford presented
no evidence that he reviewed all documents made available by Don Davis and
none show payment to “Toyota C.”, nor does he state that he has no such
documents in his possession. In the absence of other evidence to support this
claim, we cannot say that Gifford has presented more than a scintilla of
evidence to raise a genuine issue of material fact. We, therefore, conclude that
the trial court properly granted summary judgment for Appellees on Gifford’s
fraud claim based on the extended warranty.
13
Unaddressed Causes of Action
Summary judgment cannot be granted except on the grounds expressly
presented in the motion.29 In determining whether grounds are expressly
presented, reliance may not be placed on briefs or summary judgment
evidence. 30 The purpose of this requirement is to provide the opposing party
with adequate information for opposing the motion and to define the issues or
points for the purpose of summary judgment.31
Gifford asserted claims under chapter 349 of the finance code, which
creates private causes of action for certain alleged finance code violations. 32
To the extent Appellees sought summary judgment as to these claims, their
summary judgment motion addressed alleged violations based solely on
inclusion of the “dealer’s inventory tax” as an itemized charge in the installment
contract. For the reasons stated above as to Gifford’s fraud claims, summary
judgment was proper as to any claims that Don Davis violated the finance code
29
… Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 204 (Tex.
2002); Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 912 (Tex. 1997).
30
… McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341
(Tex. 1993).
31
… Westchester Fire Ins. Co. v. Alvarez, 576 S.W.2d 771, 772 (Tex.
1978); Camden Mach. & Tool, Inc. v. Cascade Co., 870 S.W.2d 304, 309
(Tex. App.—Fort Worth 1993, no writ).
32
… Tex. Fin. Code Ann. §§ 349.001–.503 (Vernon 2006).
14
based on allegedly misrepresenting the nature of the dealer’s inventory tax
charge.
However, Gifford’s petition raised other alleged finance code violations.
Because Appellees failed to address these other allegations in their summary
judgment motion, the trial court erred by granting summary judgment on
Gifford’s other finance code violation claims.33
Gifford also sought an order under section 17.50 of the DTPA
permanently enjoining Don Davis from engaging in deceptive conduct like that
alleged generally in his petition. Because Don Davis’s summary judgment
motion did not address all of the allegations of deception or misrepresentation
raised by Gifford’s petition, summary judgment as to Gifford’s DTPA claim was
improper. 34
Finally, Gifford asserted claims for wrongful repossession, conversion,
unfair debt collections, and slander of credit. Appellees failed to address any
33
… See Johnson, 73 S.W.3d at 204; Martinez, 941 S.W.2d at 912.
34
… See Johnson, 73 S.W.3d at 204; Martinez, 941 S.W.2d at 912. We
express no opinion on whether any of Gifford’s allegations other than the
alleged misrepresentation about the nature of the dealer’s inventory tax could
support an injunction under section 17.50 of the DTPA.
15
of these claims in their summary judgment motion. Accordingly, the trial court
erred by granting summary judgment as to these claims.35
Conclusion
The trial court properly granted summary judgment on Gifford’s claims
that Don Davis misrepresented the nature of the dealer’s inventory tax and
misrepresented payment of the charge for an extended warranty. However, the
trial court improperly granted final summary judgment on the remainder of
Gifford’s claims because Appellees’ motion for summary judgment failed to
address them.
Accordingly, we affirm the trial court’s judgment in part, reverse the trial
court’s judgment in part, and remand this cause to the trial court for further
proceedings consistent with this opinion.
JOHN CAYCE
CHIEF JUSTICE
PANEL: CAYCE, C.J.; DAUPHINOT and GARDNER, JJ.
DELIVERED: December 11, 2008
35
… See Johnson, 73 S.W.3d at 204; Martinez, 941 S.W.2d at 912.
16