Aeithiea Laisne v. Woldert Partners, Ltd.

MARY'S OPINION HEADING NO. 12-01-00153-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

AEITHIEA LAISNE,

§ APPEAL FROM THE 7TH

APPELLANT

V.

§ JUDICIAL DISTRICT COURT OF

WOLDERT PARTNERS, LTD.,

APPELLEE

§ SMITH COUNTY, TEXAS

Appellant Aeithiea Laisne ("Laisne") appeals the summary judgment granted to Appellee Woldert Partners, Ltd. ("Woldert") in a declaratory judgment action for interpretation of a "combination lease and sales agreement." In two issues, Laisne contends that the trial court erred in granting Woldert's motion for summary judgment. We affirm.

Summary Judgment Evidence and Procedural Background

The summary judgment evidence established that Laisne and Woldert entered into a "combination lease and sales agreement" ("contract") on August 6, 1990. This contract allowed Laisne to purchase from Woldert the properties at 800 and 802 West Ferguson in Tyler for $54,500.00, which was to be paid with 12 percent interest. The contract stated that it was a lease for the first five years of its existence and then became a sales agreement for the remainder of its term until paid in full. The contract further provided that when the entire purchase price was paid, Woldert would execute and deliver a warranty deed to Laisne, conveying the property free of all liens and encumbrances. ⁽¹⁾ Laisne immediately began paying Woldert $600.00 per month.

The three-page contract contained a number of terms including two paragraphs numbered five and six on its last page which stated:

•    Buyer shall continue to be responsible for keeping the premises and improvements in good order and repair including all heating and cooling systems, electrical and plumbing equipment, roof and all other structural repairs.



• If Buyer fails to pay any installment due on the purchase money obligation when it is due or if she defaults under any other agreement herein contained, Seller may cancel this Sales Agreement and retain all payments as rent and liquidated damages, or Seller may specifically enforce this agreement.

On February 18, 2000, a building inspector with the Neighborhood Services Department of the City of Tyler sent Woldert a letter which stated:

A complaint was filed concerning one of your properties at 802 Ferguson. Upon visual inspection, I determined the roof, fascia, and cornice to be in severe need of repair. I did not red tag the property until I contacted you. The structure appears to be unoccupied and is in immediate need of repair. I will monitor the property for the next sixty (60) days. If no Improvements appear, we will be forced to red tag the structure for condemnation.

On May 2, 2000, Woldert notified Laisne by letter that she was in default under the contract. The letter also stated that the contract would be terminated unless she brought the house at 802 West Ferguson up to the standards required by the city building codes and obtained the appropriate certificate of compliance from the City of Tyler within sixty days. The letter from Woldert to Laisne complied with Texas Property Code Section 5.063, which requires written notice of default, delivery by registered or certified mail, return receipt requested, and inclusion of a boldface notice of default on a separate page. Tex. Prop. Code Ann. § 5.063 (Vernon Supp. 2002). Laisne failed to cure the default, and on July 17, 2000, Woldert sent Laisne a letter declaring the contract terminated.

On August 10, 2000, Laisne filed an action for a declaratory judgment that paragraph five of the contract as stated above did not give rise to an action for repossession of the property by Woldert and that paragraph six as stated above was void because of public policy and was unconscionable. See Tex. Civ. Prac. & Rem. Code Ann. § 37.004 (Vernon 1997). In the action for declaratory judgment, Laisne also sought reformation of the contract to comport with her "original belief" that there was no lease but instead a contract for sale for a price of $54,500.00, payable over twelve years with an interest rate of 12 percent commencing on August 9, 1990.

Woldert counter-claimed seeking a declaratory judgment that Laisne was in default under the terms of the contract for failing to keep the property in good order and repair and that she had defaulted by failing to bring the property up to the standards required by city building codes within sixty days of the May 2, 2000 letter. Woldert also sought to have the court determine that he had a right of possession to the premises covered by the contract.

On February 16, 2001, Woldert filed a motion for summary judgment and attached documentation that showed the real property covered by the contract was in violation of city building codes, that Laisne had failed to bring the real property and improvements into compliance with the codes, and that the contract had been canceled under its terms. Further summary judgment evidence showed that on February 6, 2001, the City of Tyler had threatened to condemn the house located on the property because it did not conform to the standards required by the city building codes. Laisne filed a response to Woldert's motion for summary judgment and the relevant portion of her affidavit stated:

I am the individual purchasing property known as 802 West Ferguson and 800 West Ferguson, Tyler, Texas. As to said property, I entered into an agreement to purchase said properties on or about August 6, 1990. At the time of purchase I believed and understood that the agreement was for a twelve-year (12) purchase of said property based on 12% interest. This understanding was based on my initial discussion with Dan C. Woldert placed on a card given to me prior to entering the purchase agreement wherein the purchase price for the property was to be $54,500.00 total, with a down payment of $5,400.00, with the balance to be paid over 12 years at about $575.00 (see copy attached). The terms of the alleged Combination Lease and Sales Agreement in this matter which purports to bear my signature did not come to my attention until mid-2000 when Mr. Woldert began actions in an attempt to take my property. I at no time intended to enter a so-call Combination Lease and Sales Agreement and any such agreement was fraudulently obtained if indeed the alleged signature is my signature. Since August 1999 [sic], I had timely paid the $600.00 per month for both properties until Dan C. Woldert refused to take payments.

As to the property condition, said condition has existed for years and was known to Dan C. Woldert. I have acted in good faith as to the purchase of the property for all points from August 1990 to the present and I am prepared to fulfill my obligation in keeping with the tenor of the original agreement with Dan C. Woldert to purchase said property in monthly payments for 12 years dating from August 6, 1990.

Woldert objected to Laisne's affidavit and contended that her attempts to include evidence of prior negotiations violated the Parol Evidence Rule. Woldert showed that the contract itself stated that "this document contains the entire agreement of the parties, and all negotiations and agreements are merged into this agreement." In response to Woldert's objection, Laisne filed a portion of the deposition of Dan C. Woldert where he stated that all of Laisne's payments paid since August 1990 had been applied to principal and interest and that the contract had been treated as a mortgage throughout rather than a lease.

The trial court granted summary judgment in favor of Woldert. Among its findings, the trial court determined that Laisne defaulted under the terms of the contract by failing to keep the property in good order and repair. It further determined that Woldert had a right to take possession of the premises covered by the contract. Laisne timely filed this appeal.

Standard of Review

All orders, judgments and decrees in declaratory judgment proceedings are reviewed in the same manner as other orders, judgments and decrees. Tex. Civ. Prac. & Rem. Code Ann. § 37.010 (Vernon 1997); FDIC v. Projects Am. Corp., 828 S.W.2d 771, 772 (Tex. App.-Texarkana 1992, writ denied). To prevail on summary judgment, the movant must show there are no genuine issues of material fact and that the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166(a)(c); Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222, (Tex. 1999). In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985). Every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. Id. at 549. However, once a party produces sufficient evidence to establish its right to a summary judgment, the burden shifts to the nonmovant to produce controverting evidence raising a fact issue. See Casso v. Brand, 776 S.W.2d 551, 556 (Tex. 1989).

Discussion and Analysis  

In her first issue, Laisne contends that the trial court erred in granting a final summary judgment because fact issues remain in the case. In her second issue, Laisne contends that the trial court erred in sustaining Woldert's parol evidence objection to Laisne's affidavit which constituted her only summary judgment evidence. Because these two issues are intertwined, we will consider them together.

A contract is a promise or set of promises, for the breach of which the law gives a remedy, or the performance of which the law recognizes as a duty. Foster v. Wagner, 343 S.W.2d 914, 917 (Tex. Civ. App.-El Paso 1961, writ ref'd n.r.e.). The law regarding enforcement of contracts is well established in Texas. A cause of action for breach of contract consists of the contract itself, which is the primary right, and its breach by an act or omission. Cadle Co. v. Castle, 913 S.W.2d 627, 630 (Tex. App.-Dallas 1995, writ denied). Whether a party has breached a contract is a question of law for the judge. Lafarge Corp. v. Wolff, Inc., 977 S.W.2d 181, 186 (Tex. App.-Austin 1998, writ denied). Where the evidence is undisputed regarding a person's conduct under a contract, the judge alone must determine whether it shows performance or breach of his contract obligation. Id.

In the case before us, Woldert's summary judgment evidence showed that the real property covered by the contract violated city building codes, that Laisne failed to bring the property into compliance with the codes, and that the contract had been terminated by its terms. Woldert's evidence was sufficient to establish its right to summary judgment, and the burden then shifted to Laisne to produce evidence that controverted at least one element set forth in Woldert's motion. However, Laisne did not controvert any of Woldert's evidence in her affidavit; nor did she bring forth any summary judgment evidence brought that would create a fact issue regarding paragraphs five or six of the contract.

In her affidavit opposing Woldert's motion for summary judgment, Laisne did attempt to raise a defensive issue, however, and states that the financial terms of the contract differed from her understanding of the agreed upon terms based on her initial discussion with Dan C. Woldert. She contends that Woldert changed the terms of the contract by combining it as both a lease and sales agreement rather than as a pure sale. She further states in her affidavit that this change did not come to her attention until the middle of the year 2000, approximately ten years after she signed the contract.

To defeat Woldert's motion for summary judgment, Laisne was required to create a fact issue as to at least one element necessary to Woldert's recovery. By complaining about terms in the contract, (i.e., financial) which did not relate to the term which Woldert was alleging had been breached (i.e., failure to repair the roof), Laisne failed to controvert Woldert's summary judgment evidence and was therefore unable to defeat his motion for summary judgment.

Woldert contends that Laisne's attempt to raise an issue as to the reforming of a financial term in the contract is barred by the four-year statute of limitations. We agree. The four-year statute of limitations applies to any claim for reformation Laisne would have had because she was charged with knowledge of what the contract specifically said in August 1990. See Barfield v. Holland, 844 S.W.2d 759, 769 (Tex. App.-Tyler 1992, writ denied); see also Stowe v. Head, 728 S.W.2d 120, 126 (Tex. App.-Tyler 1987, no writ). In the instant case, the heading on page one of the three-page contract entitled it as a "Combination Lease and Sales Agreement." On page one, "PART I - LEASE AGREEMENT" is in all capital letters. On page two, "PART II - SALES AGREEMENT" is also in all capital letters. Parties are bound by the objective intent of the documents they sign. Gasmark Ltd. v. Kimball Energy Corp., 868 S.W.2d 925, 926 (Tex. App.-Fort Worth 1994, no writ). Further, the summary judgment evidence showed that Woldert was treating the contract as a pure purchase and crediting Laisne's payment to principal and interest as if she was paying a mortgage. Lainse thus failed to raise any controverting evidence which created a fact issue regarding either the contract's terms or its validity.

Finally, Laisne contends that the trial court erred in sustaining Woldert's objection that her affidavit violated the Parol Evidence Rule. The Parol Evidence Rule is a rule of substantive law which provides that in the absence of fraud, accident, or mistake, extrinsic evidence is not admissible to vary, add to, or contradict the terms of a written instrument that is facially complete and unambiguous. Pitman v. Lightfoot, 937 S.W.2d 496, 515 (Tex. App.-San Antonio 1996, writ denied). Absent pleading and proof of ambiguity, fraud, accident or mistake, a written instrument presumes that all prior agreements of the parties relating to the transaction have been merged into the written instrument. Wilkins v. Bain, 615 S.W.2d 314, 315 (Tex. Civ. App.-Dallas 1981, no writ). Here, there were no pleadings on file which alleged ambiguity, fraud, accident or mistake. Therefore, the trial court properly sustained Woldert's objection that Laisne's summary judgment evidence on the negotiations leading up to the signing of the contract on August 6, 1990, violated the Parol Evidence Rule.

CONCLUSION  

Based on the foregoing, we hold that Woldert established his right to a declaratory judgment that the contract had terminated due to Laisne's breach. Accordingly, Laisne's issues one and two are overruled and the judgment of the trial court is affirmed.

JIM WORTHEN

Justice

Opinion delivered February 13, 2002.

Panel consisted of Davis, C.J., Worthen, J., and Griffith, J.

(DO NOT PUBLISH)

1. The contract executed by Laisne and Woldert is of the type that is commonly known as a "contract for deed." The Texas Property Code prescribes the procedures for giving notice of default under a contract for deed, specifying a time to cure the default, and terminating the contract if the default is not cured within the time allowed. Tex. Prop. Code Ann. §§ 5.063-5.065 (Vernon Supp. 2002).