NO HEARING, NO EVIDENCE ADMITTED

Analytical Technology Consultants, Inc. v. Axis Capital, Inc.
Dallas Court of Appeals, No. 05-16-00281-CV (June 19, 2017)
Justices Bridges, Myers (Opinion, linked here), and Brown
Axis sued Analytical Technology Consultants (“ATC”) for breach of a lease agreement, seeking past and future lease payments and the return of leased equipment. ATC answered, but did not assert any affirmative defenses. Eventually, ATC returned the leased equipment, but did not respond to or appear at the hearing on Axis’s motion for summary judgment. The trial court granted the motion, awarding Axis damages for past and future amounts due under the lease. The court also awarded Axis the right to sell the leased equipment and apply the proceeds to the money judgment.

ATC filed a motion for new trial, asserting, among other things, that the judgment miscalculated the future payments awarded under the lease agreement. In response, Axis filed an affidavit showing that it had sold the leased equipment, and applied the proceeds to reduce the outstanding judgment. The court denied the motion, and this appeal followed.

In considering the amount of future damages, the Court analyzed the provisions of the lease agreement, and determined that the evidence in the summary judgment record was insufficient to support the amount of damages awarded. Upon default, the lease agreement provided Axis two options concerning the repossessed equipment: (i) sell the equipment and credit ATC for the proceeds, or (ii) retain it, and provide a credit for the reasonable rental value for the remainder of the lease’s term.

In its motion for summary judgment, Axis provided evidence of neither. Although Axis eventually filed an affidavit showing it had chosen option (i)—to sell the equipment and apply the proceeds—that affidavit was never admitted into evidence. The Court explained that evidence filed as an exhibit to a motion for a new trial or a response thereto does not supplement the summary judgment record unless the trial court expressly grants leave to supplement or admits the evidence at a hearing on the motion for new trial. Here, there was no hearing, and the affidavit was never admitted into evidence. On appeal, the Court could not consider the affidavit concerning the sale of the equipment in reviewing the order granting summary judgment: “To constitute evidence, the attachment must be introduced at the hearing on the motion for new trial.” The Court therefore reversed and remanded the cause for further proceedings.

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