Opinion
No. 05-08-00952-CV
Opinion issued September 11, 2009.
On Appeal from the County Court at Law No. 2 Dallas County, Texas, Trial Court Cause No. 07-12483-B.
Before Justices FITZGERALD, LANG, and FILLMORE.
MEMORANDUM OPINION
We withdraw our opinion and judgment of July 28, 2009. This is now the opinion of the Court. This is a breach of contract case. Russell Creech appeals the trial court's summary judgment, which awards Chris Christian $265,000, plus attorney's fees, interest, and costs from Creech. In two appellate issues Creech contends (1) there are genuine fact issues regarding damages under the parties' contract, and (2) any alleged breach was waived by Christian. Because the issues in this appeal involve the application of well-settled principles of law, we issue this memorandum opinion. See Tex. R. App. P. 47.4. We affirm.
On September 1, 2000, Creech and Christian entered into a written agreement (the "Agreement") intended to resolve Creech's misappropriation of funds owned by Christian. In the Agreement, Creech acknowledged the misappropriation and the fact Christian had the legal right to file criminal charges against him. Christian promised not to file criminal charges against Creech, not to make formal claims against any bank based on its honoring of fraudulent or forged checks, and not to provide Creech with a tax statement for any amount. These promises were expressly conditioned on Creech's timely honoring his obligations under the Agreement. Creech's obligations included an up-front cash payment of $35,000, transfer of the deed to certain real estate owned by Creech, and delivery of a promissory note in the amount of $102,000 (the "Promissory Note"). The Agreement provided that if Creech were in default of any provision of the Agreement, or if he were in default of the Promissory Note, then Christian would be entitled to bring suit and immediately obtain judgment against Creech in the amount of $600,000, less any amounts already delivered to Christian.
Creech executed the Promissory Note the same day. The Promissory Note contained a detailed payment schedule. It contained an acceleration clause, making the entire amount immediately due and payable if Creech failed or refused to make any payment on or before the due date. The Promissory Note also included a non-waiver clause, which stated:
Neither the failure by the holder hereof to exercise, nor delay by the holder hereof in exercising, the right to accelerate the maturity of this Promissory Note or any other right, power or remedy upon any default shall be construed as a waiver of such default or as a waiver of the right to exercise any such right, power or remedy at any time.
The note stated specifically that "[t]ime shall be of the essence in this Promissory Note with respect to all of Maker's obligations hereunder."
Some time afterward Creech defaulted, Christian filed suit, and the parties settled the dispute by modifying their original Agreement with their August 2003 Settlement Agreement. This modification stated the original Agreement and the Promissory Note would remain in force and effect. According to the Settlement Agreement, Creech was obliged to pay Christian $59,771, which was to be paid in equal monthly installments for forty months. The lawsuit (or a replacement suit if the original suit were dismissed by the court) would remain pending, but no judgment would be requested "as long as payments [were] timely made." The suit would be dismissed "upon timely payment of the note," and any breach before August 2003 would be waived "as long as payments are timely made." Creech's last payment would be due December 1, 2006.
On September 28, 2006, counsel for Christian sent a demand letter to Creech. The letter stated that four of Creech's personal checks for his monthly payments under the modified agreement were not honored by Creech's bank because his account contained insufficient funds. As of the date of the letter, Creech had failed to make the September payment at all. The letter stated the issuance of the dishonored checks constituted a default under the Promissory Note and a breach of the Agreement. Thus, according to the letter, Christian was entitled to receive from Creech the difference between $600,000 and the sums already paid. The letter demanded immediate payment in the amount of $340,146.90. Over the next six months, Creech replaced a series of bad and missing checks. Finally, in March 2007, Creech mailed what he called "the final outstanding payment." In all, Creech paid Christian a total of $127,000.
Christian brought suit for breach of contract in August 2007; he sought recovery of $230,000, the difference between $600,000 and the total of payments made by Creech up to that date. Christian filed a traditional motion for summary judgment. His summary judgment evidence included the Agreement, the Promissory Note, the Settlement Agreement, the demand letter, and written admissions by Creech that four of his checks were not honored because his account contained insufficient funds. Creech filed a response to the motion, arguing: (1) there was no breach of contract, because Creech had paid all amounts due under the modified agreement; and (2) Christian was estopped from asserting a breach, because he had accepted payments from Creech and Creech relied on that acceptance to satisfy the parties' agreement. Creech's summary judgment evidence included a series of communications between the parties concerning various payments owed by Creech. The trial court granted the motion, and the court's judgment awarded Christian $265,000, plus attorney's fees, interest, and costs. The standard of review in traditional summary judgment is well established. See Tex. R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). The movant has the burden of proving all essential elements of his cause of action as a matter of law. Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 27 (Tex. 1990). Once the movant proves those elements as a matter of law, the non-movant can defeat the motion only by presenting the court with evidence of a genuine issue of material fact on an issue that would preclude summary judgment for the movant. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979).
In Creech's first issue, he argues genuine issues of fact exist regarding damages in this case; he contends he made all agreed payments. The elements of breach of contract are: a valid contract, performance or tendered performance by the plaintiff, breach of the contract by the defendant, and damages sustained by the plaintiff as a result of that breach. Drake v. Wilson N. Jones Med. Ctr., 259 S.W.3d 386, 389 (Tex. App.-Dallas 2008, pet. denied). In this case it is undisputed the parties had a valid contract and Christian performed as he promised. The elements of breach and damages are intertwined: the Agreement provided that if Creech failed to pay the original amount due under the Agreement in a timely manner, then he would owe an additional sum to Christian. Creech argues he did not breach because he eventually paid the initial amount due. But the summary judgment evidences establishes Creech not only paid untimely when the Promissory Note made time of the essence, he repeatedly failed to make any payment at all because his checks were dishonored. Indeed, Creech's own summary judgment evidence establishes that-well past the date when all of his payments were to be completed-Creech was still replacing bad checks for payments due many months earlier. By utterly failing to comply with the parties' contractual requirement of timely payment, Creech defaulted and triggered the obligation to pay the increased amount called for under the Agreement. It is undisputed he has not paid that amount. The summary judgment record establishes Creech breached the contract and Christian has suffered damages as a result. We overrule Creech's first issue. In his second issue, Creech argues Christian waived his contractual right to timely payments by accepting the payments Creech made. Waiver is an intentional relinquishment of a known right. Straus v. Kirby Court Corp., 909 S.W.2d 105, 109 (Tex. App.-Houston [14th Dist.] 1995, writ denied). Creech's entire argument is based on Christian's ultimate acceptance of Creech's untimely or replacement payments. But the parties' Agreement contains a non-waiver clause; Christian hired an attorney, and the attorney unequivocally demanded the entire amount due as a result of the default; and there is no evidence in the record that Christian intended to accept a lesser amount than what he had demanded. See id. We will not construe Christian's efforts to collect past-due amounts as a waiver of his right to a full recovery. We overrule Creech's second issue as well.
We affirm the trial court's judgment.