Opinion
NUMBER 13-16-00296-CV
05-03-2018
ELTON TODD WIGGINS, Appellant, v. MICHELLE SMITH, Appellee.
On appeal from the 267th District Court of Victoria County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Benavides and Longoria
Memorandum Opinion by Justice Longoria
This is an appeal from an order granting appellee Michelle Smith's no-evidence and traditional motions for summary judgment in a breach of contract and fraudulent inducement dispute with appellant Elton Todd Wiggins. By seven issues, which we treat as one, Wiggins asserts that the trial court erred by granting summary judgment in favor of Smith. We reverse and remand.
I. BACKGROUND
Wiggins states that he and Smith met in 2008 through a mutual friend. From June 2008 through September 2010, Wiggins issued checks to Smith, Smith's probate attorney, and Smith's son's attorney. Prior to issuing the checks, Wiggins alleges Smith agreed to reimburse him for the money he would loan her, either through her probate claim, if victorious, or from her profits from the sale of property she owned. After he learned the probate claim may be unsuccessful, Wiggins requested repayment. Smith did not repay Wiggins, claiming the money was a gift. Subsequently, Wiggins filed suit against Smith alleging breach of contract and fraudulent inducement. After some discovery had taken place, Smith was granted both no-evidence and traditional summary judgments. This appeal followed.
II. SUMMARY JUDGMENTS
Wiggins argues that the trial court erred in granting Smith's motions for summary judgment because: (1) as a matter of law there was a contract between the parties; (2) there were issues of fact; (3) the grounds for granting the motion were not pleaded or presented by counsel; (4) at least some issues of fact were presented in an affidavit; (5) the checks marked as "loan" constitute a written agreement between the parties; (6) the regulation of loans by the Statute of Frauds applies only to financial institutions; and (7) appellee did not comply with the appropriate rules in filing their no-evidence summary judgment motion.
A. Standard of Review
1. No-Evidence Summary Judgment
A motion for summary judgment may be brought on no-evidence or traditional grounds. See TEX. R. CIV. P. 166a(c), (i). A no-evidence summary judgment is equivalent to a pretrial directed verdict, and we apply the same legal sufficiency standard on review. Guevara v. Lackner, 447 S.W.3d 566, 570 (Tex. App.—Corpus Christi 2014, no pet.). We will affirm a no-evidence summary judgment if the record shows one of the following: (1) there is no evidence on the challenged element; (2) rules of law or evidence bar the court from giving weight to the only evidence offered to prove the challenged element; (3) the evidence offered to prove the challenged element is no more than a scintilla; or (4) the evidence conclusively establishes the opposite of the challenged element. Id. at 570-71 (citing City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005)). All that is required of the non-movant is to produce a scintilla of probative evidence to raise a genuine issue of material fact on the challenged element. Forbes Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 172 (Tex. 2003). Less than a scintilla of evidence exists when the evidence is 'so weak as to do no more than create a mere surmise or suspicion' of a fact. Id. More than a scintilla of evidence exists if it would allow reasonable and fair-minded people to differ in their conclusions. Id. When reviewing a no-evidence summary judgment, we "review the evidence presented by the motion and response in the light most favorable to the party against whom the summary judgment was rendered, crediting evidence favorable to that party if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not." Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006) (citing City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005); Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193, 208 (Tex. 2002)).
2. Traditional Summary Judgment
When reviewing a traditional summary judgment, we must determine whether the movant met its burden to establish 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). We review the trial court's summary judgment de novo. Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). In order to prevail on traditional summary judgment claim, movant must show that: (1) no genuine issue of material fact exists and (2) he is entitled to judgment as a matter of law. BCCA Appeal Grp. v. City of Houston, 496 S.W.3d 1, 7 (Tex. 2016). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Provident Life, 128 S.W.3d at 215 (citing Southwestern Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002); Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997)).
B. Discussion
1. No-Evidence Summary Judgment
Addressing first the no-evidence summary judgment, Wiggins asserts, inter alia, that there was a meeting of the minds between himself and Smith and that the checks with the notation of "loan" confer an agreement between the parties. Wiggins testified in his deposition about the meeting which occurred with Smith, wherein he states they made the deal for him to advance her legal fees with the expectation of repayment. It is undisputed that Wiggins and Smith did not reduce the agreement to writing. However, Wiggins argues that there was a witness to the agreement, as well as several checks which bear the notation "loan" that constitute a sufficient writing to confer a contract. Relying on Otten v. Works, Wiggins argues that the checks were clearly marked as a loan, Smith accepted the checks, endorsed them, and received the benefit from them, which constitutes an agreement. 516 S.W.2d 291, 292 (Tex. App.—Waco 1974, no writ). In Otten, the court held:
A check on the face of which appears the word 'loan' is an instrument containing the contract of the payee to repay the money borrowed. The
payee by endorsing the check assumes the obligation of the loan and the check becomes written evidence of the contract to repay. Thus the Article 5527 V.A.T.S. (the Four-Year Statute of Limitations) is applicable; not Article 5526 V.A.T.S. (the Two-Year Statute of Limitations).516 S.W.2d at 292 (citations omitted). The record shows that several of the checks written by Wiggins to Smith did contain the word "loan" on them, and as such, could potentially be construed as written evidence of the contract.
In Smith, supra, our Supreme Court holds: '* * * it is not indispensable that the written instrument relied upon contain an express promise to do the things for the nonperformance of which the action is brought. It is sufficient if the obligation or liability grows out of a written instrument, not remotely but immediately, or if the written instrument acknowledges a state of facts from which, by fair implication, the obligation or liability arises.'
Smith argues that there is no evidence of a written contract, no contract has ever been produced, and that while some of the checks contained the notation of "loan," most did not and Smith believed each was a gift. These arguments, persuasive as they may be to a jury, address the merits of the case at the trial level, and while they may afford Smith a stronger argument in front of a jury, that still does not change the fact that reasonable, fair minds could differ on their conclusions. Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997).
As such, appellant brought forth more than a scintilla of probative evidence, and the trial judge erred in rendering the motion for no-evidence summary judgment. Whalen v. Condo. Consulting & Mgmt. Serv., Inc., 13 S.W.3d 444, 446 (Tex. App.—Corpus Christi 2000, pet. denied); see also Dominguez v. Payne, 112 S.W.3d 866, 870 (Tex. App.—Corpus Christi 2003, no pet.).
2. Traditional Summary Judgment
Because the trial court's order does not specify the grounds for its summary judgment, we must affirm the summary judgment if any of the theories presented to the trial court and preserved for appellate review are meritorious. Provident Life, 128 S.W.3d at 216. Smith presented four affirmative defenses to the trial court in her traditional summary judgment motion: (1) statute of limitations, (2) statute of frauds, (3) waiver, and (4) ratification. When a defendant moves for summary judgment based on an affirmative defense, it is her burden to prove conclusively all elements of the affirmative defense as a matter of law such that there is no genuine issue of material fact. Montgomery v. Kennedy, 669 S.W.2d 309, 310-311 (Tex. 1984). The movant-defendant must come forward with summary judgment evidence with respect to each element of the affirmative defense. Nichols v. Smith, 507 S.W.2d 518, 520 (Tex. 1974). Unless the movant conclusively establishes the affirmative defense, the non-movant plaintiff has no burden in response to a motion for summary judgment filed on the basis of an affirmative defense. Torres v. Western Casualty and Surety Co., 457 S.W.2d 50, 52 (Tex. 1970). If a movant establishes an affirmative defense which would bar the suit as a matter of law, the non-moving party must then adduce summary judgment proof raising a fact issue in avoidance of the affirmative defense, for example, facts which would bring the matter within an exception or defense to the movant's affirmative defense. Palmer v. Ensearch Corp., 728 S.W.2d 431, 435 (Tex. App.—Austin 1987, writ ref'd n.r.e.); see Gonzalez v. City of Harlingen, 814 S.W.2d 109, 112 (Tex. App.—Corpus Christi 1991, writ denied).
a. Statute of Limitations
Smith moved for summary judgment on the basis that the statute of limitations barred Wiggins' action. The statute of limitations is an affirmative defense. See Tex. R. Civ. P. 94. Smith argues that Wiggins' claim of fraudulent inducement is barred under a four-year statute of limitations imposed by section 16.004(a)(4) of the Civil Practice and Remedies Code which states:
(a) A person must bring suit on the following actions not later than four years after the day the cause of action accrues:
Smith argues that suit was brought on September 15, 2014, and therefore any checks written prior to September 15, 2010, should be barred. She contends that the date of the check is when the actual accrual date of any alleged debt. To the contrary, Wiggins suggests the cause of action did not accrue until the debt became due, which he argues was once either the probate litigation concluded or Smith sold her Stephens County land. Smith does not cite to any case law or support for her contention of when the cause of action began to accrue. The burden is on Smith to prove as a matter of law that no issue of material fact exists concerning when the plaintiff's cause of action began to accrue, without more than a mere suggestion of when the clock began to tick, we cannot find that Smith met her burden.(1) specific performance of a contract for the conveyance of real property;
(2) penalty or damages on the penal clause of a bond to convey real property;
(3) debt;
(4) fraud; or
(5) breach of fiduciary duty.
b. Statute of Frauds
Smith argues that the statute of frauds applies, and as such, the agreement between the parties, if any existed, needed to be in writing to be enforced. See TEX. BUS. & COM. CODE ANN. § 26.01 (West, Westlaw through 2017 1st C.S.). Smith's reliance on the statute of frauds stems from her argument that Wiggins' claim is based on either a contract for the sale of real estate or an agreement which cannot be performed within one year from the date of the agreement. See id. §§ 26.01(b)(4), 26.01(b)(6).
i. Contract for the Sale of Real Estate
It is undisputed that no written and signed working interest agreement existed between the parties. Turning first to the issue of whether the alleged agreement conveyed an interest in real estate Smith argues that Wiggins is claiming a right to her profits from the sale of her land to pay the alleged debt owed, per their agreement. Such an agreement may be subject to the statute of frauds. To the contrary, however, Wiggins argues that the sale of land was an alternative method by which Smith could repay her debt, the first option being paid out of the proceeds if she were to have succeeded in her probate matter. We are not persuaded that the interest is one in real estate. Smith does not cite to, nor do we find, any case law or support for an argument that simply states a debt owed that potentially may be paid from the profits of a sale of land is within the statute of frauds. See Lathem v. Kruse, 290 S.W.3d 922, 924 (Tex. App.—Dallas 2009, no pet.); see also Dynegy, Inc. v. Yates, 345 S.W.3d 516, 522 (Tex. App.—San Antonio 2011, pet. reinstated) (party pleading statute of frauds bears initial burden of establishing its applicability). Without more, Smith has not met her burden to show this cause of action arises from an interest in real estate.
ii. Agreement Which is Not to be Performed Within One Year
In deciding whether an agreement is capable of being performed within one year, we compare the date of the agreement to the date when the performance under the agreement is to be completed. See TEX. BUS. & COM. CODE ANN. § 26.01(b)(6); Young v. Ward, 917 S.W.2d 506, 508 (Tex. App.—Waco 1996, no writ). If there is a year or more between those two reference points, a writing is required to render the agreement enforceable. Young, 917 S.W.2d at 508; See Kalmus v. Oliver, 390 S.W.3d 586, 590 (Tex. App.—Dallas 2012, no pet.).
When the date performance will be completed cannot be readily ascertained, the law provides that if performance could conceivably be completed within one year of the agreement's making, a writing is not required to enforce it. A contract that could possibly be performed within a year, however improbable performance within one year may be, does not fall within the statute of frauds.Kalmus, 390 S.W.3d at 590 (citations omitted). When the alleged agreement was made, no deadlines or timelines were discussed. Wiggins argues that the agreement would be through the pendency of Smith's probate action. Wiggins argues that the agreement could have been performed within a year, given those facts. We agree. On the basis of performance within one year, we find that the agreement does not fall within the statute of frauds.
c. Waiver
Waiver, the intentional relinquishment of a known right or conduct inconsistent with claiming that right, is an affirmative defense. Frazier v. GNRC Realty, LLC, 476 S.W.3d 70 (Tex. App.—Corpus Christi 2014, pet. denied). A defendant alleging waiver as an affirmative defense must establish all the elements of waiver to be entitled to summary judgment. A.G. Edwards & Sons, Inc. v. Beyer, 170 S.W.3d 684, 694 (Tex. App.—El Paso 2005), rev'd in part on other grounds, 235 S.W.3d 704 (Tex. 2007). The elements of waiver include the following:
(1) existing right, benefit, or advantage;Ohrt v. Union Gas Corp., 398 S.W.3d 315 (Tex. App.—Corpus Christi 2012, pet. denied). Waiver is largely a matter of intent, and for "implied waiver" to be found through a party's actions, intent must be clearly demonstrated by the surrounding facts and circumstances. There can be no waiver of a right if the person sought to be charged with waiver says or does nothing inconsistent with an intent to rely upon such right. Paxton v. City of Dallas, 509 S.W.3d 247, 262 (Tex. 2017).
(2) actual or constructive knowledge of its existence; and
(3) an actual intent to relinquish the right inferable from the conduct.
Here, Smith contends that Wiggins was gifting her the money. Smith argues that this is shown by Wiggins hiring an attorney for her, paying the attorney's invoices, and not requesting repayment for six years. Smith does not explain, nor offer any support to show, how this conduct constitutes waiver. Merely stating the alleged circumstances is not enough to establish the elements of waiver as an affirmative defense. Smith is only entitled to summary judgment on the affirmative defense of waiver if she can conclusively establish each element of waiver as a matter of law. See G & H Towing Co. v. Magee, 347 S.W.2d 910, 911 (Tex. 2011). We find that Smith has not conclusively established as a matter of law each element of waiver.
d. Ratification
Smith also asserted the affirmative defense of ratification. A plea of ratification, like waiver, is an affirmative defense. Land Title Co. of Dallas, Inc. v. F.M. Stigler, Inc., 609 S.W.2d 754, 756 (Tex. 1980). The elements of ratification are: (1) approval by act, word, or conduct; (2) with full knowledge of the facts of the earlier act; and (3) with the intention of giving validity to the earlier act. See Jamail v. Thomas, 481 S.W.2d 485, 490 (Tex. App.—Houston [1st Dist.] 1972, writ ref'd n.r.e.).
As with each previously addressed affirmative defense, Smith has the burden of conclusively establishing each element of ratification before summary judgment can be granted. Smith contends that Wiggins continued to provide her with checks without repayment. Further, Smith contends that Wiggins continued to provide her with checks, even after he learned that she was spending the money frivolously. Aside from a reference to the deposition of Wiggins where he acknowledges Smith may have been using some of the money to go on a cruise, Smith does not provide any case law or support to argue how this acknowledgement by Wiggins conclusively establishes every element of ratification. Therefore, Smith has not met her burden to conclusively establish the elements of the affirmative defense of ratification.
Smith was unable to conclusively establish any of her affirmative defenses of statute of limitations, statute of frauds, wavier, or ratification. As such, the trial judge erred in rendering the motion for traditional summary judgment.
III. CONCLUSION
We reverse the trial court's traditional and no-evidence summary judgments and remand for further proceedings.
NORA L. LONGORIA
Justice Delivered and filed the 3rd day of May, 2018.