A state Court of Appeals in Texas has wiped out a debt buyer’s $4,534.48 judgment, finding the evidence was legally insufficient because the company’s own documents were never admitted into evidence at trial.
The background: The case started as a routine collection suit that the debt buyer initially won without a fight.
- The plaintiff, a debt buyer, sued the defendant for breach of contract, alleging she had signed a promissory note with a lender and then stopped making the required payments.
- To its petition, the plaintiff attached the note, records showing the missed payments, and documentation that it had purchased the note from the lender.
- After the defendant was served and did not answer, the justice court entered a default judgment against her.
- The defendant appealed to the county court for a brand-new trial in which the entire case is presented as if the first one never happened.
The ruling: At the new trial, the debt buyer’s case quietly fell apart, and the Appeals Court reversed and rendered, finding the record contained no evidence at all to support any element of the claim.
- No witnesses testified. The plaintiff’s lawyer told the court the company “rest[ed] its case in chief on the business records affidavit” of its custodian, with attachments meant to authenticate the note, show the default and balance, and trace the chain of title from the lender.
- The defendant objected that parts of the affidavit were testimonial and lacked foundation, that several pages appeared to have been created for litigation, and that the chain-of-title document referred to accounts “identified in Exhibit A” when no Exhibit A was in the filings.
- The trial court sustained one objection, never ruled on the hearsay objections, and, most importantly, never admitted the plaintiff’s documents into evidence. It still entered judgment for the debt buyer.
- That was the fatal gap. As the court put it, “[d]ocuments attached to pleadings are not evidence unless admitted into evidence at trial,” and “argument of counsel is not evidence.”
- With nothing actually admitted, the court found a complete absence of evidence on every element of the breach-of-contract claim, which requires a no-evidence reversal.
- The plaintiff did not even file a brief on appeal. Because sustaining a no-evidence challenge means the appeals court renders judgment itself rather than sending the case back, the defendant walked away owing nothing, with the court rendering judgment that the plaintiff “take nothing by its suit.”
