Opinion
No. 05-19-00400-CV
03-30-2020
CHARLES K. GRISHAM, Appellant v. CHERRY BIRD AND CAROL BROWN, Appellees
On Appeal from the 366th Judicial District Court Collin County, Texas
Trial Court Cause No. 366-04773-2018
MEMORANDUM OPINION
Before Justices Myers, Schenck, and Carlyle
Opinion by Justice Carlyle
Charles K. Grisham appeals from the summary judgment entered in favor of Cherry Bird and Carol Brown. He contends the undisputed facts establish his claim for breach of contract as a matter of law, and the trial court therefore erred both by denying his own motion for summary judgment and by failing to award him attorney fees. Alternatively, he contends there are disputed issues of material fact that preclude summary judgment against him. We affirm and, because the issues are settled in law, issue this memorandum opinion. See Tex. R. App. P. 47.4.
Background
Grisham is a physician who has sued his mother, Cherry Bird, and his aunt, Carol Brown. In 2008, Bird and Carol wanted to move their father, Billy Jack Brown, to a more stable environment closer to family. To accomplish that, Bird and Carol were willing to supplement the $400 Billy Jack was currently paying in rent, and they discussed renting a house for him.
According to Carol, Grisham "volunteered" to buy a house where Billy Jack could live. Carol and Bird in turn "agreed to pay the supplemental amount that [they] had intended to use to rent a home for [their] father to Grisham to cover a portion of the costs associated with the ownership of the property, and "Grisham agreed to that arrangement."
Grisham purchased the property in July 2008, and Billy Jack has lived there ever since. In 2012, Grisham granted Billy Jack a life estate in the property, memorialized in a 2014 deed by which Grisham also conveyed the property to his wholly owned LLC.
The record evidence does not establish the purchase price, although Bird and Carol's counsel asserted at the summary-judgment hearing that it was approximately $97,000.
Bird paid Grisham at least $800 per month beginning in August 2008, but she stopped making those payments in 2016. Record evidence does not explain why she stopped making the payments, but it is undisputed she paid Grisham at least $76,000 during that approximately eight-year span. The record also does not establish how much Carol may have contributed to the amount Grisham received.
Counsel for Bird and Carol asserted at the summary-judgment hearing that Grisham and his mother had a fight in 2016, during which Grisham told his mother, "You're the spawn of the devil and you are dead to me." Bird apparently stopped paying Grisham after that fight.
Counsel for Bird and Carol asserted at the summary-judgment hearing that Carol "has never paid a dime at any time, anywhere."
Grisham's LLC sued Billy Jack in 2018, seeking to void his life estate on the ground that Billy Jack failed to maintain the property, pay property taxes, and pay mortgage interest as required by a life tenant. In the course of that lawsuit, Grisham, Bird, and Brown each made a number of statements under penalty of perjury explaining their various understandings of the arrangements concerning Billy Jack's occupancy of the property.
Grisham testified in his deposition he expected that, after he purchased the property, his grandfather would "take care of it, maintain it," and his aunt and mother "would use the money that they were going to put into a rental property to go towards the maintenance of the home." He specified that he expected his grandfather to be "responsible for maintaining the property above general wear and tear," but he could not recall where he gained that understanding.
When asked specifically what he expected financially from his mother and aunt, he said: "I recall they were going to put $400 a month towards the maintenance of the home." He denied his mother had paid him at least $800 per month from August 2008 through July 2016, testifying that his mother "never made payments to [him] on behalf of" his grandfather. Rather, he insisted that all of the checks he received from his mother were gifts. When asked to clarify whether he merely interpreted those checks as gifts, he emphatically responded: "It's not my interpretation. That's what they were."
In their unsworn declarations, Carol and Bird did not dispute Grisham's understanding that "the additional funds which [they] had intended to use to rent a property for [Billy Jack] would be provided to Grisham to be used for the upkeep/maintenance of the" property. They clarified, however, that the specific purpose of those funds "was to preclude Billy Jack Brown from being required to pay for anything other than the $400 which he agreed to pay Grisham for the use of the" property.
Bird also explained that, although Grisham thought she and Carol "would provide $400.00 per month 'towards the maintenance of the home,' the actual amount agreed to be provided was a minimum of $800.00 per month." She further stated, and provided copies of checks to prove, she paid at least $76,000 on Billy Jack's behalf "for maintenance of the Property."
With respect to whether the payments were gifts, Bird explained that the funds "were not gifts but were specifically intended to be used for the benefit of Billy Jack Brown as long as he resided at the Property." And she stated the payments "were made in accordance with the agreements reached by Grisham and me prior to his purchase of the Property."
The case between Grisham's LLC and Billy Jack eventually settled. But before that settlement was reached, Grisham initiated this suit aginst his mother and aunt, claiming that the payments he previously insisted were gifts were in fact made under a binding oral contract. According to Grisham, Bird's and Carol's declarations proved the validity of the contract, which he asserted was breached when Bird stopped making monthly payments in 2016.
Both sides moved for summary judgment, relying primarily on each other's testimony from the life-estate lawsuit. Grisham, however, filed an additional affidavit in which he contradicts several of the statements he previously made under oath.
Specifically, despite previously stating his understanding that his aunt and mother "were going to put $400 a month towards the maintenance of the home," Grisham's summary-judgment affidavit asserts that "prior to [his] purchase of the Property, Defendants verbally promised [him] that [he] would be paid at least $800 monthly toward the disbursements and costs for the Property while Billy Jack Brown occupied the Property" (emphasis added).
Grisham's affidavit further asserts he "purchased the Property in reliance upon Defendants' promises that [he] would be paid the $800.00 monthly," and "[i]f not for Defendant's promises, [he] would not have purchased the Property." Thus, according to Grisham, "monthly payments of $800.00 [were] due and outstanding, totaling $24,800.00 as of January 1, 2019."
Recognizing that his claims of a binding oral contract appeared inconsistent with his prior emphatic and unequivocal testimony that his mother's payments were gifts and that their status as gifts was not open to interpretation, Grisham's summary-judgment affidavit explains that he was not asked during his deposition "why [he] considered the $800 monthly payments . . . to be gifts." (emphasis added). Neither Grisham's affidavit nor his briefing on appeal explains the distinction he apparently draws between "interpreting" the payments as gifts, which he expressly disavowed, and "considering" the payments to be gifts.
In any event, Grisham's affidavit explains that "[t]he $800 monthly payment amount was agreed to, in part, based upon the Internal Revenue Service annual exclusion amount for gifts to be treated as nontaxable gifts for tax purposes." And it "was important to [Grisham] that the monthly payments . . . would not be treated as taxable gifts and subject to the gift tax." In other words, although the payments were purportedly made to fulfill a binding contractual obligation, Grisham "considered" them to be gifts for purposes of avoiding taxes.
At the summary-judgment hearing, Grisham's counsel added: "[M]y client discusses why those payments were gifts, but they're gifts for tax purposes. My client didn't want taxable gift income. He wanted the payments to be nontaxable. And so they were treated as nontaxable gifts. Now, that treatment for tax purposes doesn't change the nature of the agreements between the parties and it doesn't make the payments gifts for state law purposes."
In response to Grisham's motion, and in support of their own no-evidence and traditional motions for summary judgment, Bird and Carol argued, among other things, that: (1) Grisham's affidavit is a sham affidavit that contradicts his prior sworn testimony and should be disregarded; (2) any promise to pay was an unenforceable promise to make a future gift; (3) there was no meeting of the minds on the essential terms of any alleged oral contract; and (4) to the extent there was a valid contract, any failure to perform on their part was excused by Grisham's prior material breach, because he did not use the funds to maintain the property.
The trial court held a hearing on the parties' competing motions in March 2019. Notably, Grisham's counsel conceded at the hearing that Grisham applied at least a portion of the money he received from Bird to reimburse himself for the costs of acquiring the property, rather than spending it exclusively on the property's maintenance:
Your Honor, the agreement was that the payments would be paid towards the cost of the house. There's no showing that they haven't been. No one disputes that my client bought the house. And, in fact, while they are not in the summary judgment record, counsel admits that the cost of the house just by itself exceeds the payments thus far.
The trial court took the matter under advisement and issued its summary judgment in favor of Carol and Bird two weeks later.
Standards of Review
"We review the trial court's summary judgment de novo." Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). When the parties have filed competing motions for summary judgment on the same issues, we consider the summary-judgment evidence presented by both parties and determine all applicable legal questions. Id. If we determine the trial court has erred, we render the judgment the trial court should have rendered. Id.
Parties moving for summary judgment have the burden of showing both that there are no genuine issues of material fact and that they are entitled to judgment as a matter of law. See Tex. R. Civ. P. 166a(c). In determining whether a genuine fact issue exists, "we review the evidence in the light most favorable to the party against whom summary judgment was entered, crediting evidence favorable to that party if reasonable jurors could do so, and disregarding contrary evidence and inferences unless reasonable jurors could not." Prophet Equity LP v. Twin City Fire Ins. Co., No. 05-17-00927-CV, 2019 WL 3886651, at *5 (Tex. App.—Dallas Aug. 19, 2019, no pet.) (mem. op.). A fact issue is genuine only if "the evidence rises to a level that would enable reasonable and fair minded jurors to differ in their conclusions in light of all the summary judgment evidence." Id. (citing Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007) (per curiam)).
"[A] trial court may conclude that a party does not raise a genuine fact issue by submitting sworn testimony that materially conflicts with the same witness's prior sworn testimony, unless there is a sufficient explanation for the conflict." Lujan v. Navistar, Inc., 555 S.W.3d 79, 87 (Tex. 2018). While the "trial court is not to weigh the evidence or determine its credibility, and thus try the case on the affidavits," the court may disregard the conflicting testimony from a so-called "sham affidavit" filed to bolster "patently unmeritorious claims or untenable defenses." Id. (quotations omitted).
The alleged contract is unenforceable.
On appeal, Grisham repeats his arguments from the trial court that the summary-judgment evidence establishes both the formation of a valid oral contract and its breach. Bird and Carol, in turn, repeat their various arguments as to why the alleged contract cannot be enforced. We conclude there was no enforceable contract between the parties.
A valid contract requires: (1) an offer; (2) acceptance of the offer in strict compliance with its terms; (3) a meeting of the minds as to both the contract's subject matter and its essential and material terms; (4) each party's consent to the contract's terms; (5) intent that the contract be mutual and binding; and (6) consideration. See Brandt Cos., LLC v. Beard Process Sols., Inc., No. 05-17-00780-CV, 2018 WL 4103210, at *10 (Tex. App.—Dallas Aug. 29, 2018, no pet.) (mem. op.). An enforceable contract must address all of its essential and material terms with enough detail to allow a court to both determine the rights and responsibilities of the parties and confirm both sides intended to be contractually bound. Id. at *11.
Generally, whether a contract has been formed is a question of law. See id. Accordingly, "[w]hether a particular contractual term is essential or material is a question of law." Id. In determining whether a term is essential or material, we "consider the subject matter of the particular contract at issue" to determine whether the "contracting parties would reasonably regard [the term] as a vitally important element of their bargain." Id. Essential terms of a contract typically include the "time of performance, price to be paid, work to be done, service to be rendered, or property to be transferred." Fan Expo, LLC v. Nat'l Football League, No. 05-16-00763-CV, 2018 WL 1890144, at *6 (Tex. App.—Dallas Apr. 20, 2018, pet. denied) (mem. op.).
Although determining whether terms are essential is a legal question, there may be a question of fact as to whether the parties reached a meeting of the minds as to those terms. See id.; see also Geophysical Micro Comput. Applications (Int'l) Ltd. v. Paradigm Geophysical Ltd., No. 05-98-02016-CV, 2001 WL 1270795, at *3 (Tex. App.—Dallas Oct. 24, 2001, pet. denied). Ultimately, the determination of whether the parties had a meeting of the minds is objective and must be based on "the meaning reasonably conveyed by what the parties said and did, and not on their subjective state of mind." Brandt, 2018 WL 4103210, at *10. The inquiry thus focuses on "the conduct and circumstances surrounding the transaction from a reasonable person's interpretation at that particular point in time."
Here, Grisham's original deposition testimony, when contrasted with Bird's and Carol's declarations, show the parties had widely diverging understandings and expectations concerning Billy Jack's living arrangements. Carol stated Grisham "volunteered" to buy the property. She and Bird then agreed (perhaps with each other) to give Grisham "the supplemental amount that [they] had intended to use to rent a home for [their] father to Grisham to cover a portion of the costs associated with the ownership of the Property." Both Carol and Bird clarified that the money they intended to give Grisham was to be used for the "upkeep/maintenance of the home." And according to Carol, "Grisham agreed to that arrangement" (emphasis added).
This evidence does not establish that Bird and Carol offered to pay Grisham money in exchange for his agreeing to purchase the home and allow Billy Jack to live there. If anything, the statements establish only that, after Grisham "volunteered" to buy the home, Bird and Carol agreed to provide him the unspecified amount they intended to use to rent a property for Billy Jack in exchange for Grisham's spending the money to maintain the home for Billy Jack's benefit. Grisham agreed to that arrangement, meaning he agreed he would spend the money Bird and Carol gave him on maintaining the home. Nothing in Bird's and Carol's declarations establishes that they intended to enter a binding contract with Grisham to give Grisham at least $800 per month in exchange for Grisham agreeing to purchase the property and allow Billy Jack to live there. Thus, Bird's and Carol's declarations do not, as Grisham argues, establish—as a matter of law—that the parties agreed on the subject matter of the oral contract Grisham seeks to enforce.
Further, Bird's and Carol's declarations do not establish an understanding of the purported contract's period of performance, the specific amount each woman agreed to provide, or whether the two women agreed to be jointly and severally liable for each other's portion.
The only statement from either Carol or Bird that arguably addresses the period of performance for the contract comes from Bird's declaration, in which she states she did not intend her payments to be gifts to Grisham; instead, she intended that they be used for Billy Jack's benefit "as long as he resided at the property." From that statement alone, one cannot infer, as Grisham argues, that she and Carol agreed to be contractually bound to make monthly payments indefinitely—as long as Billy Jack resided at the property. Rather, the statement establishes only that, as long as Billy Jack resided at the property, any payments made by Bird were to be used for Billy Jack's benefit.
With respect to the purported price of the contract, the parties' statements are inconsistent. Grisham initially testified he understood his mother and aunt would be contributing "$400 a month towards the maintenance of the home." Bird and Carol did not disagree that their payments would go towards the home's maintenance, but Bird thought the amount to be provided was at least $800. Whatever the amount, nothing in the record indicates how any payment obligation was to be allocated among Bird and Carol, and there is nothing to suggest each agreed to be personally responsible for the other's share.
Moreover, Grisham's initial testimony emphatically stated the payments from his mother were intended as gifts and that their status as gifts was not open to interpretation. Bird appears to have had a different understanding, saying the payments were not gifts but were made for Billy Jack's benefit "in accordance with the agreements reached" between her and Grisham "prior to his purchase of the Property." Bird does not specify what those agreements were. Nevertheless, as we discussed above, her declaration suggests only that she and Grisham agreed that any money she provided would be applied towards maintaining the property for Billy Jack's benefit, as long as he lived there.
The only record evidence filling any of these gaps is Grisham's affidavit, in which he contradicts his prior sworn testimony. Despite having previously insisted his mother's payments were gifts and stated that he thought his mother and aunt would be contributing "$400 a month towards the maintenance of the home," his affidavit asserts the payments were not actually gifts but were instead made according to a binding contract to provide $800 per month towards "the disbursements and costs for the Property." His counsel argued at the summary-judgment hearing that this was consistent with Grisham's reimbursing himself for the costs of acquiring the property, despite the prior testimony of Grisham, Bird, and Carol stating that the payments were supposed to go towards maintaining the property.
Grisham does not explain how his understanding morphed from "maintenance" to "disbursements and costs." Nor does he explain how he could have relied on Bird's and Carol's purported promises to pay $800 per month, as stated in his affidavit, given his previous sworn testimony that he understood they would be contributing $400.
Grisham's only unifying explanation comes in his affidavit's discussion of whether the payments from his mother were gifts. He explains that the payments were actually required by contract, but he "considered" them to be "gifts" for tax purposes. But if Bird's payments were in fact made to discharge a legal obligation created under a binding contract for consideration, as Grisham's now contends, then they were not gifts—for tax purposes or otherwise. See Robertson v. United States, 343 U.S. 711, 713 (1952) (stating in the context of determining tax liability that "[t]he discharge of legal obligations—the payment for services rendered or consideration paid pursuant to a contract—is in no sense a gift"); Magness v. Magness, 241 S.W.3d 910, 912 (Tex. App.—Dallas 2007, pet. denied) ("A gift is a voluntary transfer of property to another made gratuitously and without consideration."). Either Grisham testified falsely in his affidavit that his mother owed him money under a binding contract, or he has testified to his intent to assert a frivolous position before the IRS. Regardless, the trial court was entitled to disregard Grisham's inconsistent affidavit testimony, which was provided without sufficient explanation. See Lujan, 555 S.W.3d at 87.
Grisham contends any uncertainty in the terms of the contract was nevertheless cured by part performance, noting that Billy Jack has lived at the property since he purchased it, and Bird made monthly payments of $800 until 2016. See Brandt, 2018 WL 4103210, at *11 (noting that partial performance may sometimes remove uncertainty as to whether a contract was formed). He contends the parties' behavior is consistent with a binding contract. Maybe, maybe not.
The parties' actions in this case could be consistent with any number of arrangements. The fact that Billy Jack has continuously lived at the property could be explained solely by Grisham's separate agreement with him, Billy Jack paying $400 per month and, according to Grisham's position in the life-estate case, being required to maintain the property. The fact Bird paid $800 monthly could be consistent with her intent to help maintain the property for Billy Jack's benefit, so Billy Jack would not be burdened with those costs. Neither of these facts removes uncertainty as to whether Bird and Carol believed they had a binding obligation to pay Grisham $800 per month in exchange for his purchasing the property and allowing Billy Jack to live there.
Further, nothing in the record suggests Carol partially performed anything. And to the extent the agreement required Grisham to use Bird's payments solely for maintenance on Billy Jack's behalf, the record does not show Grisham performed that obligation. In fact, Grisham's counsel apparently conceded Grisham has not allocated all of the payments he received from Bird towards the property's maintenance.
It appears the parties reached an understanding that Billy Jack would live at a house purchased by Grisham, and Bird and Carol agreed to provide some amount to Grisham for the property's maintenance. But it is not clear from the record how much they agreed to provide: $400 as Grisham first testified, at least $800 as Bird testified, or an indeterminate amount the sisters intended to use to assist their father in renting a house.
It is also unclear what, if anything, Grisham agreed to provide in exchange for the money. Bird's payments may be gifts, as Grisham first testified; the payments might have been made in exchange for Grisham maintaining the property and not requiring Billy Jack to provide more than the $400 per month; or, as Grisham now asserts in contradiction to his previous testimony, the payments may have been provided in exchange for Grisham's promise to purchase the home and allow Billy Jack to live there.
Even if we assume the latter and credit Bird's testimony as to the amount being at least $800, nothing other than Grisham's contradictory affidavit purports to establish the period of performance for the contract, and nothing in the record establishes a specific amount Carol agreed to contribute.
Under these facts, we conclude the essential and material terms of the purported oral contract are too indefinite to enforce and, in any event, no reasonable and fair minded jury could conclude the parties' reached a meeting of the minds as to all of the purported contract's essential terms. See Prophet Equity, 2019 WL 3886651, at *5. We overrule Grisham's issues and affirm summary judgment in favor of Bird and Carol.
/Cory L. Carlyle/
CORY L. CARLYLE
JUSTICE 190400F.P05
JUDGMENT
On Appeal from the 366th Judicial District Court, Collin County, Texas
Trial Court Cause No. 366-04773-2018.
Opinion delivered by Justice Carlyle. Justices Myers and Schenck participating.
In accordance with this Court's opinion of this date, the judgment of the trial court is AFFIRMED.
It is ORDERED that appellees Cherry Bird and Carol Brown recover their costs of this appeal from appellant Charles K. Grisham. Judgment entered this 30th day of March, 2020.