Summary Judgment Hearings - Objecting to Affidavits

What happened?

In 1986, Stuart Electric and Summers Electric entered into a credit agreement whereby Stuart would buy supplies and equipment from Summers and promised to repay them. The owners of Stuart, Barry and Zac Stuart, also signed personal guarantees to pay Summers back for anything purchased by Stuart.

In 2008, the Stuarts sold their company. At that time, they contacted Summers, which was now known as Rexel, to inform them that they sold the company. According to the testimony of the Stuarts, Rexel confirmed at that time that the Stuarts had been removed from the account and had no further liability to Rexel.

After the Stuarts sold the company, Stuart Electric continued to buy supplies and equipment from Rexel. But Stuart failed to make payment for materials purchased on that account. As a result, Rexel brought suit against the company as well as against Barry and Zac Stuart claiming that the personal guarantees they signed in 1986 still made them responsible for payments on the account.

What happened in court?

Rexel moved for summary judgment, and the trial court granted the Motion. On appeal, the key issue centered around the affidavits of Barry and Zac Stuart that were included in their response to the motion for summary judgment. Those affidavits included the testimony of the Stuart’s that Rexel had confirmed to them that they had no further liability to Rexel after the Stuart’s sold their company.

Rexel unsuccessfully tried to have those affidavits struck by the trial court, and asked the appellate court to find that trial court had abused its discretion in failing to do so. The reasoning of Rexel was that the statements contained in the affidavits were not “readily controvertible” as required by law. However, the court found that “readily controvertible” does not mean easily controvertible. And the court found that Rexel could have controverted the statements by the Stuarts that Rexel represented that the Stuarts had no more liability by inquiring of its own employees about the representations made to the Stuarts.

The appellate court then moved on to consider whether the trial court erred in granting summary judgment to Rexel. The standard for summary judgment is a fairly simple one. The party moving for summary judgment must show there is no genuine issue of material fact. To defeat a motion for summary judgment, the respondent must only raise a fact issue. The question here is whether the affidavits of the Stuarts raised a fact issue to defeat summary judgment. Because the court already found the affidavits were valid summary judgment evidence, they found the affidavits did raise a fact issue. As a result, the court overturned the summary judgment and sent the case back to the trial court.