Sudha Manandhar v. Mohammad K. Jamshed ( 2011 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-11-00027-CV
SUDHA MANANDHAR APPELLANT
V.
MOHAMMAD K. JAMSHED APPELLEE
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FROM THE 236TH DISTRICT COURT OF TARRANT COUNTY
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MEMORANDUM OPINION1
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Appellant Sudha Manandhar appeals the trial court’s judgment in favor of
her brother-in-law, appellee Mohammad K. Jamshed. In one issue, appellant
contends that the trial court should not have granted summary judgment for
appellee because he did not conclusively establish his statute of limitations
affirmative defense to her breach of contract claim. We affirm.
Background Facts
1
See Tex. R. App. P. 47.4.
In January 1998, appellee purportedly signed a document stating the
following:
This is to acknowledge that [appellant] has provided . . . funds
in the sum of $65,000.00 a check and also the sum of $61,000.00 in
cash to purchase the . . . T&J Conoco at 501 Renfro [S]t. in Crowley
and also to help in running the business and also doing the check
cashing.
This money will return with interest as [has] been discussed
verbally.[2]
In November 2005, appellant signed a demand for payment. The demand
was addressed to appellee and recited,
It has been eight years that I have lent you money one check
from my brother’s account sum of $65,000.00 and $61,000.00 cash
in US dollars.
To purchase the T&J Conoco which is at 501 Renfro [S]t. in
Crowley, it has been a while but now it is time to demand my money.
I am requesting you in full payment so I can pay back to my
lenders.
In October 2009, appellant sued appellee, alleging that appellee had not
made any payments.3 Appellant brought claims for breach of contract, quantum
meruit, and promissory estoppel. Appellee filed a verified answer in which he
pled a statute of limitations affirmative defense.
2
The record contains a copy of a $65,000 check that is signed by appellant
and is made out to T&J Conoco.
3
Appellant asserted in her verified petition that payment was to be made by
appellee ―when demand was made.‖
2
In July 2010, appellee filed a motion for summary judgment on his statute
of limitations defense. He contended, in summary, that the November 2005
―demand for loan repayment [was] over seven (7) years from the date of the loan
and th[e] suit [was] filed more than eleven (11) years from the date of the loan.
Th[e] suit is therefore . . . barred by the applicable four year statute of limitation.‖
Appellant responded to the motion and filed an affidavit stating the following
facts:
appellant gave appellee $126,000 when appellee signed the
acknowledgement in January 1998;
appellee agreed to return the money to appellant, with interest, ―when he
had the money to do it‖;
six or seven times between 1998 and 2004, appellant agreed, at appellee’s
request, to extend appellee’s time for repayment;
each time appellee asked for an extension on repayment, he admitted
owing the amount and said that he ―would have the money soon to repay
the amount‖;
in 2005, appellee ―changed his mind and indicated he was breaching [the]
agreement . . . and would not honor his promise,‖ so appellant sent him the
November 2005 demand; and
appellee refused to repay appellant, which forced her to file the suit in
October 2009.
Appellant’s husband (and appellee’s brother), Mohammad T. Jashmed, also filed
an affidavit that repeated the facts contained in appellant’s affidavit.
3
The trial court granted appellee’s motion for summary judgment; the court’s
order stated that it disposed of all parties and claims and was final and
appealable. Appellant brought this appeal.
The Trial Court’s Decision to Grant Appellee’s Summary Judgment Motion4
In her only issue, appellant argues that the trial court erred by granting
appellee’s motion for summary judgment. In a summary judgment case, the
issue on appeal is whether the movant met the summary judgment burden by
establishing that no genuine issue of material fact exists and that the movant is
entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Mann Frankfort
Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009).
We review a summary judgment de novo. Travelers Ins. Co. v. Joachim, 315
S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the light
most favorable to the nonmovant, crediting evidence favorable to the nonmovant
if reasonable jurors could, and disregarding evidence contrary to the nonmovant
unless reasonable jurors could not. Mann Frankfort, 289 S.W.3d at 848.
4
The trial court disposed of appellant’s quantum meruit and promissory
estoppel claims although appellee had not expressly sought summary judgment
on those claims. Appellant has not argued that the trial court’s decision to grant
summary judgment against her breach of contract claim on the basis of
appellee’s statute of limitations defense should be analyzed differently than its
decision to grant summary judgment against her quantum meruit and promissory
estoppel claims. In other words, she has not asserted any reason that the trial
court’s judgment should be reversed on the latter claims even if we affirm it on
the breach of contract claim. We cannot raise grounds for reversing a summary
judgment sua sponte, so we will resolve appellant’s quantum meruit and
promissory estoppel claims under the same rationale that applies to her breach
of contract claim. See Vawter v. Garvey, 786 S.W.2d 263, 264 (Tex. 1990).
4
We indulge every reasonable inference and resolve any doubts in the
nonmovant’s favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008).
A defendant is entitled to summary judgment on an affirmative defense if
the defendant conclusively proves all the elements of the affirmative defense.
Frost Nat’l Bank v. Fernandez, 315 S.W.3d 494, 508–09 (Tex. 2010), cert.
denied, 131 S. Ct. 1017 (2011); see Tex. R. Civ. P. 166a(b), (c); see also Tarrant
Cnty. Hosp. Dist. v. GE Automation Servs., Inc., 156 S.W.3d 885, 888 (Tex.
App.—Fort Worth 2005, no pet.) (describing the assertion of a statute of
limitations as an affirmative defense). To accomplish this, the defendant-movant
must present summary judgment evidence that conclusively establishes each
element of the affirmative defense. See Chau v. Riddle, 254 S.W.3d 453, 455
(Tex. 2008).
We construe the document that appellee signed in 1998 as a
nonnegotiable promissory note.5 See Edlund v. Bounds, 842 S.W.2d 719, 724
(Tex. App.—Dallas 1992, writ denied) (op. on reh’g) (―In short, a note is a written
unconditional promise to pay another a certain sum of money . . . .‖); Sibley v.
Cont’l Supply Co., 290 S.W. 769, 771 (Tex. Civ. App.—Fort Worth 1926)
5
The note is not negotiable because it is not payable to bearer or to order.
See Tex. Bus. & Com. Code Ann. § 3.104(a)(1) (West Supp. 2010), § 3.109
(West 2002); Mauricio v. Mendez, 723 S.W.2d 296, 298 (Tex. App.—San Antonio
1987, no writ). Thus, the statutes of limitations to enforce negotiable notes do
not apply in this case. See Tex. Bus. & Com. Code Ann. § 3.118 (West 2002);
McStay v. Heady Fin. Corp., No. 11-02-00014-CV, 2003 WL 21710534, at *2
(Tex. App.—Eastland July 24, 2003, no pet.) (mem. op.).
5
(explaining that a note is a written promise to pay a certain some of money at a
future time), writ denied, 116 Tex. 402, 292 S.W. 155 (1927); see also Black’s
Law Dictionary 1162 (9th ed. 2009) (defining ―note‖ as a ―written promise by one
party . . . to pay money to another party‖).6 A person must bring suit to collect a
debt not later than four years after the cause of action accrues. Tex. Civ. Prac. &
Rem. Code Ann. § 16.004(a)(3) (West 2002); see also Sheffield Capital Corp. v.
Konen, No. A14-94-00157-CV, 1995 WL 128250, at *1 (Tex. App.—Houston [14th
Dist.] Mar. 23, 1995, no writ) (relying on section 16.004(a)(3) to explain that ―the
applicable statute of limitations for bringing suit on a note is four years‖).
Appellant emphasizes that appellee’s note ―did not have a payable on
demand clause.‖ But if no time for payment of a debt is stated in a note, it is a
demand note. Martin v. Ford, 853 S.W.2d 680, 682 (Tex. App.—Texarkana 1993,
writ denied); McCraine v. Manz, 730 S.W.2d 366, 367 (Tex. App.—Dallas 1987,
no writ); see also Salinas v. Wright, 11 Tex. 572, 575 (1854) (―The plaintiff
declared as upon a promissory note, which did not specify any day of payment.
The legal import of such a note is that it is payable on demand[.]‖). The note in
this case does not specify a date for repayment, and therefore, we conclude that
it is a demand note.
6
An unqualified acknowledgment of an existing debt implies a promise to
pay it. Starr v. Ferguson, 140 Tex. 80, 83, 166 S.W.2d 130, 131 (1942);
Mercantile Nat’l Bank at Dallas v. Acoustics, Inc., 589 S.W.2d 773, 776 (Tex. Civ.
App.—Eastland 1979, no writ); see also Tex. Bus. & Com. Code Ann.
§ 3.103(a)(12) (West Supp. 2010) (defining ―promise‖ as a written undertaking to
pay money signed by the person undertaking to pay).
6
Generally, the statute of limitations begins to run on a demand note when
the note is executed. Martin, 853 S.W.2d at 682; McCraine, 730 S.W.2d at 367;
Andrews v. Cohen, 664 S.W.2d 826, 829 (Tex. App.—Tyler 1984, writ ref’d n.r.e.);
see G & R Inv. v. Nance, 683 S.W.2d 727, 728 (Tex. App.—Houston [14th Dist.]
1984, writ ref’d n.r.e.).7 Appellant asserts that appellee executed the note in
January 1998, so under the authority cited above, to comply with the statute of
limitations, appellant would normally be required to file suit on the note by
January 2002. See Tex. Civ. Prac. & Rem. Code Ann. § 16.004(a)(3).
Appellant argues, however, that appellee’s oral acknowledgements of his
debt and his requests for extensions of the time for repayment, occurring
between 1998 and 2005, extended the statute of limitations until appellee
repudiated the note by telling appellant that he would not pay it. Appellant
contends, therefore, that there are ―fact issues regarding reviving the agreement,
extensions agreed to in the performance of the agreement and final deadline for
7
The court in Nance stated, ―When demand is a condition precedent to suit
on a note, the statute of limitations begins to run on the date of demand.‖
683 S.W.2d at 728; see Martin, 853 S.W.2d at 682 (―If . . . a demand is an
integral part of a cause of action, or a condition precedent to the right to sue,
limitations does not begin to run until a demand is made, unless demand is
waived or is unreasonably delayed.‖). Appellant does not argue that the trial
court’s judgment should be reversed because her demand for payment was a
condition precedent to her ability to collect money or sue on appellee’s note, and
the record does not establish such a fact. Instead, appellant’s affidavit states that
she and appellee ―agreed that [appellee] would return the money to me when he
had the money to do it.‖ At any rate, because appellant’s affidavit states that she
granted four to five extensions on repayment between 1998 and 2002, it is
apparent that appellant first demanded that appellee repay the money well before
four years from the date she sued appellee in 2009.
7
performance.‖ She asserts that each extension took her action out of the
operation of the statute of limitations.
In 1931, the commission of appeals outlined the effect of oral agreements
extending the repayment of debt on the statute of limitations:
Where the parties to a promissory note, which is past due but
is unbarred by limitation, and which by its terms bears interest until
paid, mutually agree to an extension of the time of payment of the
note to a future date, a new contract, based upon a new
consideration deemed valuable in law, arises between the parties.
By such an agreement, each of the parties becomes obligated to the
other in respects not comprehended by the contract arising from the
note. The payee impliedly promises to surrender his present right to
demand immediate payment of the indebtedness represented by the
note, and to forego suit during the extension period; the payor
impliedly promises to pay said indebtedness on the new maturity
date, together with interest up to that date, in any event, at the rate
provided in the note. Each of these new promises constitutes the
consideration for the other, and a binding contract, embodying the
terms of the note, as modified by the new agreement, results.
In such a case we understand the rule to be that, despite the fact
that said agreement is oral, the existing right of action, which
accrued to the creditor under the note, is relinquished, and that
another right of action for the debt does not accrue to him until the
new promise of the debtor to pay is breached. Limitation does not
commence to run against an action to enforce the debtor’s new
promise to pay, until the time for performance of the new promise
arrives.
McNeill v. Simpson, 39 S.W.2d 835, 835–36 (Tex. Comm’n App. 1931, holding
approved) (citation omitted). Thus, a statute of limitations may, in some
circumstances, be based on the breach of a later oral agreement to pay a note
rather than the earlier date that the note was issued. See McElwee v. Estate of
Joham, 15 S.W.3d 557, 559–60 (Tex. App.—Waco 2000, no pet.). But various
courts, including our own, have emphasized that for an oral extension of time for
8
payment of a note to be binding, it must be supported by consideration, and the
extension must be to a time certain in which the holder of the note gives up the
right to sue. See Thompson v. First Austin Co., 572 S.W.2d 80, 82 (Tex. Civ.
App.—Fort Worth 1978, writ ref’d n.r.e.) (―Agreement to pay what is already owed
is no consideration to extend time for payment of note . . . .‖); Maceo v. Doig, 558
S.W.2d 117, 119–20 (Tex. Civ. App.—Austin 1977, writ ref’d n.r.e.); see also
Austin Real-Estate & Abstract Co. v. Bahn, 87 Tex. 582, 584, 30 S.W. 430, 430
(1895) (op. on reh’g) (―The promise of the debtor to forego his right to pay at any
time after the note was originally due secured to the creditor the absolute right to
secure the interest for the entire time of the extension, and constituted the
consideration for the creditor’s promise.‖); Voelker v. Hera, 616 S.W.2d 647, 648
(Tex. Civ. App.—Texarkana 1981, no writ) (explaining that for there to be a
binding oral extension of the time for the payment of a note, it must be shown
that (1) the maker binds himself not to make payment before a new due date,
(2) the extension must be for a certain length of time, and (3) there must be valid
consideration, such as the creditor’s ability to earn a set amount of interest during
the extension). In other words, as explained many years ago,
In case of a debt, which bears interest either by convention or by
operation of law, when an extension for a definite period is agreed
upon by the parties thereto, the contract is that the creditor will
forbear suit during the time of the extension, and the debtor foregoes
his right to pay the debt before the end of that time. The latter
secures the benefit of the forbearance; the former secures an
interest bearing investment for a definite period of time. One gives
up his right to sue for a period, in consideration of a promise to pay
interest during the whole of the time; the other relinquishes his right
9
to pay during the same period, in consideration of the promise of
forbearance.
Benson v. Phipps, 87 Tex. 578, 580, 29 S.W. 1061, 1061 (1895) (emphasis
added).
According to the affidavits that appellant filed, the agreements between
appellant and appellee between 1998 and 2004 only indefinitely extended
appellee’s time to pay the note. Appellant’s affidavit recites,
Between 1998 through 2002, [appellee’s] business grew and
prospered. About 4 or 5 times during that time period, I agreed, at
his request, to extend the agreement for his repayment. Each time I
asked when he would have the money, he’[d] say[,] ―Trust me, you
don’t have to worry[.]‖ Because he was my brother-in-law, I trusted
him.
. . . Each time [appellee] asked for an extension he admitted
he owed the amount and would have the money soon to repay the
amount.
. . . Each time, [appellee] acknowledged the justness of the
debt and requested extensions on the repayment. Stating to me that
he would pay it back as soon as he had money to do it. [Emphasis
added.]
Thus, under the authority cited above, we cannot agree with appellant that the
oral extensions in this case qualified as contracts that changed accrual of the
statute of limitations from January 1998 to another date.8 See First State Bank of
8
Moreover, there is no express indication in the record that appellant and
appellee agreed that interest would continue to accrue during the indefinite
extensions. In her petition, appellant pled for damages of $126,000; although
she pled for prejudgment and postjudgment interest, she did not expressly plead
for interest on the principal of the note. We also note that according to the civil
practice and remedies code, an ―acknowledgment of the justness of a claim that
appears to be barred by limitations is not admissible in evidence to defeat the law
10
Eustace v. Bowman, 203 S.W. 75, 76 (Tex. Civ. App.—Texarkana 1918, no writ)
(explaining that to have the effect of postponing a statute of limitations, an oral
agreement regarding a note must be based upon a new consideration, and ―must
be something more than a gratuitous indulgence on the part of the creditor which
adds nothing to the burden of the original obligation of the debtor‖).
Because the facts of this case require application of a four-year statute of
limitations that began to run when appellee allegedly signed the note in 1998, we
conclude that the trial court did not err by holding that appellant’s suit, which she
filed in 2009, was barred by the statute of limitations.9 See Tex. Civ. Prac. &
Rem. Code Ann. § 16.004(a)(3); Martin, 853 S.W.2d at 682; McCraine, 730
S.W.2d at 367. We conclude that appellee conclusively established the statute of
of limitations if made after the time that the claim is due unless the
acknowledgment is in writing and is signed by the party to be charged.‖ Tex. Civ.
Prac. & Rem. Code Ann. § 16.065 (West 2008).
9
We acknowledge that estoppel might, in some circumstances, be used to
avoid a statute of limitations affirmative defense. See Manzell v. Hightower, 159
S.W.2d 552, 554 (Tex. Civ. App.—Texarkana 1942, no writ) (holding that estoppel
precluded the maker of a note from relying on a statute of limitations).
But appellant did not plead estoppel. See Simmons v. Compania Financiera
Libano, S.A., 830 S.W.2d 789, 792 (Tex. App.—Houston [1st Dist.] 1992, writ
denied) (stating that if a plaintiff desires to rely on an affirmative matter in
avoidance of a defense pled in the defendant’s answer, he must allege it in a
supplemental petition, unless it is already put in issue by the petition); LoBue v.
United Servs. Planning Ass’n, 467 S.W.2d 574, 576 (Tex. Civ. App.—Fort Worth
1971, writ dism’d). Moreover, appellant has not expressly relied on estoppel in
the trial court or on appeal to avoid appellee’s statute of limitations affirmative
defense. Thus, we conclude that we need not address whether estoppel could
have prevented appellee’s assertion of his defense. See San Jacinto River Auth.
v. Duke, 783 S.W.2d 209, 210 (Tex. 1990).
11
limitations affirmative defense, and we therefore overrule appellant’s only issue.
See Fernandez, 315 S.W.3d at 508–09.
Conclusion
Having overruled appellant’s sole issue, we affirm the trial court’s
judgment.
TERRIE LIVINGSTON
CHIEF JUSTICE
PANEL: LIVINGSTON, C.J.; MEIER and GABRIEL, JJ.
DELIVERED: August 31, 2011
12