Opinion
No. 03-08-00418-CV
Filed: February 10, 2010.
Appealed from County Court at Law No. 1 of Travis County, No. C-1-CV-06-004249, Honorable Eric Shepperd, Judge Presiding.
Before Justices PATTERSON, PEMBERTON and WALDROP.
Dissenting Opinion by Justice PATTERSON.
MEMORANDUM OPINION
Robert Robedee appeals from the take-nothing summary judgment rendered on his claim that Carmen Sarkadi breached a loan agreement. Robedee pleaded that he loaned Sarkadi $8,500 and that Sarkadi did not repay the debt. Sarkadi asserted by his motion for summary judgment that there was no evidence of a valid contract. The trial court granted the motion without specifying a basis. We affirm.
Robedee does not challenge the take-nothing summary judgment on his fraud claim.
A party seeking a no-evidence summary judgment must assert that there is no evidence of one or more essential elements of a claim on which the opposing party will have the burden of proof at trial. Tex. R. Civ. P. 166a(i); Hamilton v. Wilson, 249 S.W.3d 425, 426 (Tex. 2008) (per curiam). If the nonmovant fails to produce more than a scintilla of probative evidence raising a genuine issue of material fact as to each challenged element on which he has the burden of proof, summary judgment is proper. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003). We review the evidence in the light most favorable to the nonmovant and disregard all contrary evidence and inferences unless a reasonable fact-finder could not. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). When a trial court's order granting summary judgment does not specify the grounds relied upon, we may affirm if any of the summary judgment grounds are meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000).
Sarkadi filed a no-evidence motion for summary judgment asserting, in part, that there was no evidence that a valid contract existed. A contract is not legally binding unless it is definite enough in its terms so that a court can understand what the promisor undertook. T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992); Farah v. Mafrige Kormanik, P.C., 927 S.W.2d 663, 678 (Tex. App.-Houston [1st. Dist.] 1996, no writ). Where an essential term of an agreement is open for future negotiations, there is no binding contract. Id. In a contract to loan money, the material terms are generally the amount to be loaned, the maturity date of the loan, the interest rate, and the repayment terms. Id.
In response to Sarkadi's no-evidence motion for summary judgment, Robedee filed an affidavit that provides in relevant part as follows:
I made a loan to Carmen Sarkadi on or about November 9, 2004 in the amount of $8,000.00. I made an additional loan to him on or about November 22, 2004 in the amount of $500.00. I gave Mr. Sarkadi the full $8,500.00. Mr. Sarkadi accepted the loans, and he promised to repay me. This money was not a gift to Mr. Sarkadi. It was a loan that Mr. Sarkadi promised to repay.
Mr. Sarkadi has never made any payments to me in repayment of the loan, and thereby breached the loan agreement. The principal balance due to me on the loan is $8,500.00, to my damage.
I justifiably relied upon his representation that he would repay, all of which has been to my injury and damage. I am seeking recovery of punitive damages against him.
This is the only evidence submitted in response to the motion for summary judgment and is the only evidence in the record of a loan agreement. The affidavit does not contain any statement regarding the maturity date of the loan or when the loan was due. Robedee asserts on appeal that the loan was to be repaid two weeks after it was made, but does not cite to evidence in the record to support this allegation. Robedee asserts in his live pleading that "Defendant defaulted in making required payments on the account on or about January 1, 2005." However, Robedee did not produce any summary judgment evidence to support this pleading. There is simply no evidence in the record to support the allegation that the debt went into default for lack of payment on January 1, 2005.
Sarkadi pointed out the absence of evidence as to the alleged due date. See T.O. Stanley Boot Co., 847 S.W.2d at 221. Robedee did not produce any evidence on this element. The trial court did not err by granting the no-evidence summary judgment on Robedee's contract claim.
The dissent argues that this case is similar to Jackson v. Carlson, No. 03-08-00429-CV, 2009 Tex. App. LEXIS 1758 (Tex. App.-Austin Mar. 12, 2009, no pet.) (mem. op.). However, in Jackson there was no allegation of a specific due date for which there was a complete lack of evidence. The allegations in Jackson were that there was not a stated due date, the debt was therefore a demand obligation, and there was evidence in the record of a demand by the creditor and a refusal to pay by the debtor after demand. See 2009 Tex. App. LEXIS, at *6-8. Here there is a specifically pleaded due date for which there is no support in the summary judgment evidence. This case is not controlled by Jackson.
DISSENTING OPINION
Because the majority's opinion directly conflicts with this Court's analysis and holding in Jackson v. Carlson, No. 03-08-00429-CV, 2009 Tex. App. LEXIS 1758 (Tex. App.-Austin March 12, 2009, no pet.) (mem. op.), and other well established authority, I respectfully dissent.
I would reverse the trial court's no-evidence summary judgment ruling on appellant Robert Robedee's breach of contract claim and remand for further proceedings. See Tex. R. Civ. P. 166a(i); Jackson, 2009 Tex. App. LEXIS 1758, at *6-9; see, e.g., Sadeghi v. Gang, 270 S.W.3d 773, 776 (Tex. App.-Dallas 2008, no pet.) (summary judgment reversed and contract held to be enforceable and not "agreement to agree"); Vermont Info. Processing, Inc. v. Montana Bev. Corp., 227 S.W.3d 846, 852 (Tex. App.-El Paso 2007, no pet.) (summary judgment that contract not enforceable reversed; only when the agreement upon which the plaintiff relies is " so indefinite as to make it impossible for the court to determine the legal obligations of the parties, is it not an enforceable contract") (emphasis added); Hewlett-Packard Co. v. Benchmark Elecs., Inc., 142 S.W.3d 554, 563 (Tex. App.-Houston [14th Dist.] 2004, pet. denied) (holding that where no payment due date specified in contract, payment due within a reasonable time); Gabriel v. Alhabbal, 618 S.W.2d 894, 897 (Tex. Civ. App.-Houston [1st Dist.] 1981, writ ref'd n.r.e.) (loan without specified due date enforceable; demand for repayment of loan must be made within reasonable time); see generally Corbin on Contracts §§ 4.1-4.7 (1993) (generally discussing "indefiniteness" of contract terms concerning enforcement of contracts); Restatement (Second) of Contracts §§ 33, 34 (1981) (certainty of terms and effect of performance or reliance on enforcement of contracts).
Robedee filed a verified petition in June 2006 against Sarkadi seeking to recover $8,500, the principal balance due on alleged loans that Robedee had made to Sarkadi on account. See Tex. R. Civ. P. 185. Robedee alleged that Sarkadi had defaulted on required payments on the account on or about January 1, 2005, that Robedee had demanded payment of the principal balance owed, and that payment had not been made.
Sarkadi filed an answer that included a verified denial. See Tex. R. Civ. P. 185 (sworn petition on account is "prima facie evidence thereof, unless the party resisting such claim shall file a written denial, under oath") .
In October 2007, Sarkadi filed a motion for no-evidence summary judgment challenging each of the elements of Robedee's breach of contract claim: (i) the existence of a valid contract, (ii) Robedee's performance or tendered performance, (iii) Sarkadi's breach of the contract, and (iv) Robedee's damages as a result of the breach. See Tex. R. Civ. P. 166a(i). Robedee responded to the motion, filing an affidavit in which he averred that (i) he loaned $8,500 in November 2004 to Sarkadi, (ii) the full amount was due, and (iii) Sarkadi has not paid any amounts back to him, to Robedee's damage. Sarkadi did not file any evidence in response. After a hearing, the trial court granted Sarkadi's no-evidence motion for summary judgment.
A no-evidence summary judgment is essentially a pretrial directed verdict and we apply the same legal sufficiency standard as we apply in reviewing a directed verdict. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750-51 (Tex. 2003). We take as true all evidence favorable to the non-movant and indulge every reasonable inference and resolve any doubts in the non-movant's favor. Id. at 751. A no-evidence summary judgment is improperly granted if the respondent brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact. Id.; see also Tex. R. Civ. P. 166a(i) (trial court must grant no-evidence motion on challenged elements "unless the respondent produces summary judgment evidence raising a genuine issue of material fact") .
The majority concludes that the trial court did not err in granting Sarkadi's no-evidence motion based upon the majority's finding that there was no evidence that a valid contract existed. The majority concludes that there was no evidence of a valid contract because there was no evidence of an agreed due date for repayment of the loan. For authority, it cites T.O. Stanley Boot Company v. Bank of El Paso, 847 S.W.2d 218 (Tex. 1992), and Farah v. Mafrige Kormanik, P.C., 927 S.W.2d 663 (Tex. App.-Houston [1st. Dist.] 1996, no writ). Neither case supports the majority's holding here.
In T.O. Stanley Boot, the appellants asserted a breach of contract claim against the Bank of El Paso, contending that they had a valid contract with the bank in which the bank agreed to make available to them a $500,000 line of credit but failed to do so. 847 S.W.2d at 221. The supreme court held that the alleged contract failed for indefiniteness because no evidence was introduced regarding the interest rate for the loan or the repayment terms. Id. at 222. The only evidence was the amount that the bank allegedly agreed to loan. Id. at 221. In that context — where the allegation concerned an agreement to loan money in the future — evidence of the repayment terms and interest rate was necessary for the court to understand what the bank allegedly agreed to undertake, and the court was unwilling to supply terms to enforce the agreement. Id. at 222.
In Farah, the appellant contended that its bank agreed to provide financing as long as appellant maintained accounts with the bank and complied with terms and conditions of certain individual loan agreements and that the bank "obligated itself to make any future loans in response to a reasonable request" but failed to do so. 927 S.W.2d at 678. Consistent with the reasoning and holding in T.O. Stanley Boot, our sister court found the bank's alleged agreement to lend money in the future "too indefinite to be independently enforceable because [the agreement] did not specify any of the material terms inherent in the individual contracts to lend money." Id.
The facts here are not analogous to the plaintiffs' claims in Farah and T.O. Stanley Boot. Taking as true the evidence favorable to Robedee and indulging every reasonable inference and resolving any doubts in his favor, Robedee has already fully performed his obligations under the contract by loaning $8,500 to Sarkadi. See King Ranch, 118 S.W.3d at 751; see also Scott v. Ingle Bros. Pacific, Inc., 489 S.W.2d 554, 554-56 (Tex. 1972) (issue of fact whether parties intended to agree to a binding contract; noting court's willingness to find agreement when party has substantially performed or taken action in reliance upon agreement); Restatement (Second) of Contracts § 34(2) ("Part performance under an agreement may remove uncertainty and establish that a contract enforceable as a bargain has been formed."). In contrast, the parties had not performed in Farah and T.O. Stanley Boot; it was the failure to loan funds that formed the plaintiffs' claims.
Further, viewing the evidence favorable to Robedee, the evidence shows that the parties intended to enter into an agreement, Robedee had demanded payment of the loan amount, and the loan had matured. Even without evidence of the specific due date then, the contract terms are definite enough to grant the remedy requested — a monetary award of the loan amount. See Hewlett-Packard Co., 142 S.W.3d at 563; Gabriel, 618 S.W.2d at 897; see also America's Favorite Chicken Co. v. Samaras, 929 S.W.2d 617, 623 (Tex. App.-San Antonio 1996, writ denied) ("Where the evidence shows that the parties intended to enter into an agreement, the courts should find the contract to be definite enough to grant a remedy provided that there is a certain basis for determining the remedy."); Texas Oil Co. v. Tenneco Inc., 917 S.W.2d 826, 830 (Tex. App.-Houston [14 Dist.] 1994), rev'd on other grounds sub nom. Morgan Stanley Co. v. Texas Oil Co., 958 S.W.2d 178 (Tex. 1997) (quoting Restatement (Second) of Contracts § 33(2)) ("[C]ontract terms are reasonably certain `if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.'").
I would resolve this case based upon this Court's decision in Jackson. In Jackson, Carlson brought suit in 2008 against Jackson for breach of an oral contract, alleging that a check for $5,000 that Carlson wrote to Jackson in November 2004 had been a loan, that Carlson had demanded repayment, and that Jackson had refused to repay the loan. 2009 Tex. App. LEXIS 1758, at *1. This Court affirmed summary judgment for Carlson to recover the $5,000 based upon the oral loan pursuant to rule 166a(c) of the rules of civil procedure. Id. at *13; see also Tex. R. Civ. P. 166a(c); Provident Life Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215-16 (Tex. 2003) ("Under Texas Rule of Civil Procedure 166a(c), the party moving for summary judgment bears the burden to show that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law.").
Carlson's evidence in support of his motion included his affidavit and a copy of the cancelled check. 2009 Tex. App. LEXIS 1758, at *4-5. Carlson averred that he made the loan in November 2004 and that despite his demand for repayment, Jackson "`continues to refuse to make payments on all amounts due on the loan and has left a balance of $5,000.00.'" Id. at *5. In this Court's analysis, we expressly stated that a "loan contract need not include a specific due date to be enforceable" and "[w]e see no reason to require oral contracts to be more specific than written ones." Id. at *6-7. We concluded that Carlson's averment that the loan was due and payable "enough to establish the loan had matured." Id. at *6. We also recognized that "courts regularly enforce contracts where no time for performance is specified by implying a reasonable time requirement." Id. at *7. We then framed the issue to be whether Carlson's demand for repayment was made within a reasonable time and concluded that "three years and three months is a more than reasonable amount of time to wait to demand payment." Id. at *8.
Similarly, Robedee filed suit in June 2006 alleging that Robedee had loaned $8,500 to Sarkadi, Robedee had demanded payment of the principal balance owed, and payment had not been made. In response to the no-evidence motion, Robedee averred that he made the loans to Sarkadi in November 2004 and the principal balance of $8,500 was due. Robedee's affidavit was not controverted. Given our standard of review and holding in Jackson that a similar creditor's affidavit conclusively established the creditor's entitlement to summary judgment as a matter of law on the creditor's breach of contract claim, I would conclude that Robedee, at a minimum, produced "summary judgment evidence raising a genuine issue of material fact" that a valid contract existed. See Tex. R Civ. P. 166a(c), (i); King Ranch, 118 S.W.3d at 751; Jackson, 2009 Tex. App. LEXIS 1758, at *6-8.
In contrast to the facts here, Jackson filed an affidavit in response to Carlson's affidavit. See Jackson v. Carlson, No. 03-08-00429-CV, 2009 Tex. App. LEXIS 1758, at *10-11 (Tex. App.-Austin March 12, 2009, no pet.) (mem. op.). This Court nonetheless concluded that Jackson's affidavit did not raise a genuine issue of material fact to preclude summary judgment for Carlson. See id.
The majority concludes that this case is not controlled by Jackson because "there was no allegation of a specific due date for which there was a complete lack of evidence": the majority distinguishes Jackson because the loan there was due on demand and Robedee pleaded a specific due date. The majority's factual distinction, however, is without substance: both Carlson and Robedee averred to the full performance of their obligation to loan the funds, the principal amount due and owing, and their demand for repayment. The majority's opinion improperly precludes the resolution of the factual disputes between the parties, including whether the parties intended for the transferred funds to Sarkadi to be a loan. See Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 n. 5 (Tex. 1979) (citing Gulbenkian v. Penn, 252 S.W.2d 929, 931 (1952)) (purpose of summary judgment "to eliminate patently unmeritorious claims and untenable defenses," not to deprive litigants of their right to a full hearing on the merits of any real issue of fact).
Given Robedee's request for relief in his petition and his averment that the loan amount was due, I further question the significance the majority places on a specific due date. Although Robedee's petition seeks pre-and post-judgment interest, the petition does not seek accrued interest under the terms of the loan but the principal amount of $8,500. See id. at *9 (quoting T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992)) ("While it is true that the interest rate `will generally be' a material term, `[e]ach contract should be considered separately to determine its material terms.'").
For this reason, I respectfully dissent.